The failure

Alas, this blog has failed. Perchance it’s time to pack up the kibble and squeaky toys, the ETFs and the spreadsheets, and scamper off into the ether. After all, what’s the point? The nation ain’t listening.

We have several reports. Be strong.

A week ago the central bank released a survey of what people anticipate is coming. The bottom line: Canadians want to increase spending more than expect incomes will rise. That suggests more borrowing. We’re already at a record level. Ouch.

Now, worse, comes the latest Consumer Debt Index (MNP) with this shocker: 50% of people are now within $200 a month of insolvency – unable to pay the bills. Forty-nine per cent say they’re not confident they can cover expenses without adding to their debt (which, of course, increases expenses). Says the company: “Our findings may point to a shift among some Canadians from debt apathy to debt hopelessness. Feelings of hopelessness can make people feel like giving up on ever paying down their debt or, worse, ignoring the debt as it piles up higher.”

Let this sink in. If half your neighbours are barely making ends meet, how are they saving anything for the future? Retirement? Kids’ educations? A crisis? And if 70% of Canadians own houses, what in Dog’s name are they thinking?

There’s more.

How many first-time homebuyers do you figure are being pushed into real estate they can’t afford by their parents? Well, in BC it’s 90%.

A survey of BC notaries found nine in ten young buyers are being financed by their families – up from 70% five years ago. And while it’s laudable Mom & Dad want to see Squirt buy his first condo and become a fully-functioning indebted adult, the reality is such buyers are not worthy. They need a handout just to make the downpayment – stark proof they’re taking on an obligation which is beyond them. Odds are if the Bank of Mom didn’t exist, buyers would dry up and prices cascade lower. We are fools.

And speaking of condos in Vancouver, here’s another reason people are failing financially.

Last month the average concrete box in YVR sold for $667,875. So if you bought one a year earlier, you lost $52,000. Plus $12,000 in closing costs and another $34,000 in realtor commission if you bailed. That would be a hit of $97,000, or 13%. Plus strata fees and property taxes. In this scenario, renters win. Owners pay.

According to analyst Dane Eitel, this will deteriorate further. Check it out, kids:

We forecast further price losses in 2020, with prices likely breaking downward out of the current divergent trend. That will result in some volatile price movement, with a high probability of seeing prices test the $600,000 threshold.

Ultimately before the market settles at the bottom. Eitel Insights forecasts that the Greater Vancouver Condo market will test the $525,000 threshold. Which would signal a price correction of 30% from the peak.

Pity those who did not bail when the delusion was at its highest. How could so many actually believe an asset would rise in value forever, when none have done so before?

Meanwhile some people want to make our real estate and debt affliction worse. Like the CD Howe Institute, and even the current Bank of Canada boss, Stephen Poloz.

The idea: bring 30-year US-style mortgages to Canada, where most people now take only 5-year versions. The Interest Act, which makes loans payable after 60 months, has prevented long mortgages with fixed rates, but Ottawa is being urged to change that. The proposal: loosen the stress test. Make it easier to pass for those taking out multi-decade loans, willing to extend their debt obligation much further into the future. And a lower stress test barrier means more can be borrowed. House prices go up.

Well, that’s just this week’s news. But it’s enough. Are we on the wrong path as a society? Sure feels like it. The goal of life is not a house, but we’ve made it so. Real estate lust is directly responsible for a plunge in savings, a leap in debt, a cash flow crisis for half the nation and a looming retirement crisis. And because this is a democracy, rest assured the bad choices of many will become the bane of existence for the few. Like you.

Only the foolhardy will fail to keep their head down, or stop blogging about it.

 

142 comments ↓

#1 MF on 01.21.20 at 4:53 pm

Meh nobody can afford these houses anyways.

Debt levels are high for those that do.

Can’t go much higher so expect stagnation anyways. The lower end condo market will keep increasing though…and then level off.

MF

#2 T on 01.21.20 at 4:53 pm

Alas, this blog has failed. Perchance it’s time to pack up the kibble and squeaky toys, the ETFs and the spreadsheets, and scamper off into the ether. After all, what’s the point? The nation ain’t listening.

——-

Exactly what I’ve been saying. No one is listening except for a select few.

Your advice and guidance over the years has been greatly appreciated. I don’t blame you if you pack it in.

#3 Camille on 01.21.20 at 5:03 pm

A very successful money management firm, driven by its principal, always instilled fear into the general population, better to place your money with them, they see all the boogeymen.
Alas, fifty years ago there was more poverty, and more before that with no safety net, cept for the neighbours to help, Scottish.
Perhaps your premise is a false one to start with, the general possibility of wealth for all, through good money management and decisions.
Sounds so down I feel its genuine. Writer is smarter than I, please give us some hope?

#4 Calgarian on 01.21.20 at 5:04 pm

Hello Garth,

As a Millenial with a mortgage to the literal bank of Dad who’s finally started putting together proper balanced an diversified investments based on the advice primarily drawn from one blog as well as a few other readings, I’d just like to make sure you know that while not everyone is listening, there are at least a few who do, and who greatly appreciate the time and effort you put into the advice presented on this blog.

In my head when I went into the home purchase knowing that there was a good chance it likely wouldn’t appreciate well and that I should be putting aside assets for growth as well, your blog among a few other things was the push that gave me the confidence to just put aside the money and get it done.

Thanks for all you do, it really does help some of us.
A house-horny, pooched millenial.

#5 Sail away on 01.21.20 at 5:09 pm

Maybe this blog attracts Debbie Downers.

All I know is I’m doing fine, and it sounds like IH’s entire extended family is doing fine. Is anyone else doing fine?

#6 conan on 01.21.20 at 5:09 pm

After the banking crisis, government basically wrote a blank cheque, to the idiots that almost broke the planet’s financial system.

Loaned at almost nothing , the banks were encouraged to re loan the money to the higher risk spectrums. Banks would then use these proceeds to pay back government.

The Powers that be solved one problem by creating another. Not surprised this is where we are today.

#7 That $200 on 01.21.20 at 5:11 pm

I do believe that spending is out of control, but we’ve been hearing about the “within $200” for years now and still no dice in terms of true failure. The peeps just keep on spending. The real question is how much discretionary expense those peeps have to go along with their $200 figure. I believe it to be sizable based on what I see – eating out, electronics, kids sports, cars, etc. Like a good government, people will continue to spend everything they have each month (to within $200).

Now don’t get me wrong, I’m a bear that has done very well – including through real estate. The question is how we – the prodigious accumulators of wealth – profit from the folly of others. They have mostly had the last laugh up until now.

#8 Piano_Man87 on 01.21.20 at 5:13 pm

The other side of it is that our 1 in 2 neighbours are screwing up the country for people like me.

My wife and I make decent money. We have saved a good amount, could afford a nice house, but the news keeps freaking me out. Why would I buy a house when:
A) values keep dropping (here in Saskatoon)
B) there doesn’t seem to be any more room to increase house prices (Canadians are tapped out)
C) wages aren’t rising beyond inflation, which means there is a low upside gain with buying homes
D) Boomers are starting to retire, and sell their homes en masse, which will cause supply gluts
E) stock market investment gains are roaring.

I would love to own a home, and by all rights, I’m the perfect candidate to own one. But I won’t, because our country has ruined the financial prospect of buying one for anyone who has looked hard at these facts.

Sure, there’s Garth’s rule of 90, but how much faith do Millennials like me have in Canada’s future, since the rule of 90 ought to be followed over the long term? Can I realistically expect my salary to even match inflation over the next 25 years? Can I expect the home I buy to be bought by someone with as much money as me in the next 25 years? All of this is frightening. We have little choice but to continue renting, stuffing our cash into tax sheltered investment vehicles while our coworkers and friends struggle to make ends meet. It’s a sad time for the country. The outlook is so bleak and no one seems to care anymore.

#9 Kurt on 01.21.20 at 5:15 pm

“The nation ain’t listening.”
Yeah, maybe, but *I’m* listening, as well as many others. I can’t save the world, but I can save myself and my family.

#10 Caledondave on 01.21.20 at 5:16 pm

Good idea….pack it in and then go for the leadership of the P.C.Party. Just imagine the look on your former boss face when you are the next Prime Minister.

#11 Swanson on 01.21.20 at 5:18 pm

This blog has not failed. Some of the nation is listening, and we’ve done well in the past few years.

#12 Ustabe on 01.21.20 at 5:18 pm

Rather than stop, how about a pivot?

With Charest out, that leaves only Harper acolytes in the running for the CPC leadership.

Guaranteed disaster looming. Sort of like the GOP in the US, saddled with a giant liability and seemingly no way out.

Unless we want the Quebec dairy lobby picking the next leader again the CPC needs a cleanse and a deep introspective period. This rush to anoint some (any) party loyalist and get on with business as usual may please low info members but it spells permanent opposition status to me and many others.

I bet we could talk about that for a day or two.

Or we could continue to prattle on about how manly we all are. I’d have more to say about that but I have a pedicure appointment I must leave for.

#13 wallflower on 01.21.20 at 5:22 pm

I see and hear signs of this everywhere. Just a few days past sitting at a pizzeria waiting on a CAA tow (ha, ha, ha) overheard mid 20s woman saying to young man:
My telephone bill is $93
My rent is $980
I have not had a gig in three weeks
I have $992 in my account
Don’t know what I am going to do

She then spent a few minutes trying to sort how short she actually was; basic math challenged.

#14 Blacksheep on 01.21.20 at 5:30 pm

So much for science:

We are all told our Co2 emissions are the primary cause that’s destroying the planet so we must sacrifice to reduce our ‘Carbon footprint’

Story # 1)

“A study published Jan. 20 in Nature Climate Change by researchers at Columbia University examines the greenhouse warming effects of ozone-depleting substances and finds that they caused about a third of all global warming from 1955 to 2005, and half of Arctic warming and sea ice loss during that period.”

“They thus acted as a strong supplement to carbon dioxide, the most pervasive greenhouse gas; their effects have since started to fade, as they are no longer produced and slowly dissolve”

“The results highlight the importance of the Montreal Protocol, which has been signed by nearly 200 countries, say the authors. “Climate mitigation is in action as we speak because these substances are decreasing in the atmosphere, thanks to the Montreal Protocol,” said Lorenzo Polvani, lead author of the study and a professor in Columbia’s Department of Applied Physics and Applied Mathematics. “In the coming decades, they will contribute less and less to global warming. It’s a good-news story.”

https://www.labmanager.com/news/2020/01/ozone-depleting-substances-caused-half-of-late-20th-century-arctic-warming-says-study
—————————————————–
Then right below it, on the Google news feed is this story, that directly contradicts the first:

Story # 2)

“Despite reports that global emissions of the potent greenhouse gas were almost eliminated in 2017, an international team of scientists has found atmospheric levels growing at record values.”

“Over the last two decades, scientists have been keeping a close eye on the atmospheric concentration of a hydrofluorocarbon (HFC) gas, known as HFC-23.”

“This gas has very few industrial applications. However, levels have been soaring because it is vented to the atmosphere during the production of another chemical widely used in cooling systems in developing countries.”

“Scientists are concerned, because HFC-23 is a very potent greenhouse gas, with one tonne of its emissions being equivalent to the release of more than 12,000 tonnes of carbon dioxide.”

“This potent greenhouse gas has been growing rapidly in the atmosphere for decades now, and these reports suggested that the rise should have almost completely stopped in the space of two or three years. This would have been a big win for climate.”

“The fact that this reduction has not materialised, and that, instead, global emissions have actually risen, is a puzzle, and one that may have implications for the Montreal Protocol, the international treaty that was designed to protect the stratospheric ozone layer.”

https://www.sciencedaily.com/releases/2020/01/200121113039.htm
——————————–
Hey you, just stop asking questions and pay your goddamned carbon taxes laddy!

#15 Sail away on 01.21.20 at 5:31 pm

#8 Piano_Man87 on 01.21.20 at 5:13 pm

Lions, tigers and bears, oh my!

—————————

PM, you have plenty of choices. It sounds like fear may be driving your actions, though.

Never blame others for decisions that you make.

#16 Damifino on 01.21.20 at 5:34 pm

“Our findings may point to a shift among some Canadians from debt apathy to debt hopelessness…”
———————————-

I cried when I read that.

Well, not really. But I did mist up a little. Dog help us.

#17 Christopher Stubbs on 01.21.20 at 5:34 pm

Garth
I urge you to not give up on us.
Your message does reach many people and is helping.
My children are now reading your blog and it is teaching them
Very important lessons that are not taught anywhere else.

Thanks for all you do

#18 YouKnowWho on 01.21.20 at 5:36 pm

Adults behaving badly.

It’s what NEWS should be called according to my kid.

Absolutely 100% right. I had no comeback.

#19 Diego Mansalta on 01.21.20 at 5:38 pm

Garth, Don’t worry. If your blog helps even just one more person it will be worth it! It has helped me and I still come here to read! Best advice you’ve ever given me was to create a balance sheet. It all started from there in the early 2000s, and it has really helped me from getting into financial trouble.

#20 David Pylyp on 01.21.20 at 5:42 pm

Indeed Time to sail away….

The goal of life is not a house, but we’ve made it so. Real estate lust is directly responsible for a plunge in savings, a leap in debt, a cash flow crisis for half the nation and a looming retirement crisis.

We brought this into existence… by signing those bank notes.

The SHORT SALES of the 90 ‘s return.

David Pylyp
Toronto, ON

#21 BlogDog123 on 01.21.20 at 5:43 pm

I like the idea of that blog dog who said “Join the Canadian Coast Guard”.

DB pension, good career prospects, won’t get outsourced and a cheap education.

Nope, Mills will buy a house in GTA just like all their friends.

#22 Renter's Revenge! on 01.21.20 at 5:45 pm

#8 Piano_Man87 on 01.21.20 at 5:13 pm
We have little choice but to continue renting, stuffing our cash into tax sheltered investment vehicles while our coworkers and friends struggle to make ends meet.

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

I feel you, man.

I too have little choice but to make life decisions that superior to those of my neighbors.

The burden of being better than other people has been thrust upon me, and I will bear its weight.

Such is the Way of the Blog Dog.

#23 Linda on 01.21.20 at 5:54 pm

Well, here is hoping that the alleged 50% who are within $200 of financial armageddon include the alleged 49% who may need to add to their debt load to pay the monthly expenses. Am now reading an excellent book called ‘Do You Really Need It’ by Pierre-Yves McSween that my partner got out of the library. That imperiled 50% could do with reading that book. Canadian author & published in 2018 so the content is both relevant & recent. As for the 50% of us who are not imperiled – at least, I trust that is the case – doesn’t hurt to revisit the basics.

Garth, don’t despair that so many are apparently still mired in the tar pit of debt. Way I see it is, your blog & other helpful financial advice is what has kept the percentage from being even higher. Who knows, it may be one of the tools the indebted 50% will use to escape the pit:)

#24 Muttley O'Toole on 01.21.20 at 5:56 pm

For some strange reason, on reading Garth’s epistle for the day, I shuddered and thought of “The Wreck of The Hesperus”.

#25 yorkville renter on 01.21.20 at 5:57 pm

#5 – We’re doing better than fine… thanks for asking

#26 akashic record on 01.21.20 at 5:58 pm

The blog didn’t fail Garth.

It is a clever, effective marketing tool, ahead of time, just what you needed when you had to start building your new advisory business.

As for people listening? Everybody can learn only what and when they are ready to learn from any teaching.

I for one could not have been a follower, I arrived to this place with empty pockets, limited time to catch up and a family to support, when things have to be done at certain time, windows can’t be missed without penalties.

I had to explore way more speculative ways than laid-back safe, diversified investment. Luckily I always had the nerve to roll the dice – I would not even be here otherwise. I am extremely grateful how it is all working out, and I am saying this out loud every day when the sun goes down a when it raises again.

#27 Smartalox on 01.21.20 at 5:58 pm

Over the holidays, my neighbours (mid forties, two professional incomes, two kids), received some bad news: their recently purchased replacement vehicle was going to require a costly fix – at least according to the big-chain auto service center that they had brought it to.

Things looked dire. We’d already heard about their experiences reaching out to her parents to help cover their costs, and they’d spent a lot to buy the car hoping that it would be reliable. They’d also been though a heath scare, with time off work, and lots of extra costs, so it hasn’t been an easy couple of years.

We gave them the name of an independent mechanic that we trust, someone whom my wife had used to have her car serviced for decades.

They took their car to him, and he was able to complete the needed repair for $400 less than our neighbours had been quoted previously. Took a few days, but the mechanic was able to source some used parts to complete the repair, and could avoid charging for new ones.

They wept with relief.

I grew up in a house with similar financial pressures, and entered adulthood carrying a five-figure debt, with the assumption that much debt was simply a fact of life. I can’t begin to express how happy I am that I no longer live that way.

#28 45north on 01.21.20 at 6:03 pm

Alas, this blog has failed.

50% of people are now within $200 a month of insolvency – unable to pay the bills. Forty-nine per cent say they’re not confident they can cover expenses without adding to their debt. Says the company: “Our findings may point to a shift among some Canadians from debt apathy to debt hopelessness. Feelings of hopelessness can make people feel like giving up on ever paying down their debt or, worse, ignoring the debt as it piles up higher.”

Justin Trudeau doesn’t think that he’s failed. It’s all part of the plan. Once it’s hopeless, he’s there to give hope. The human-rights based policy on housing gives the hope that mortgages don’t mean much.

#29 IHCTD9 on 01.21.20 at 6:09 pm

The vast majority of the peeps here seem to be doing fine, better than fine. While I’ve always been allergic to debt, and had no issue with living within my means (old crap house and crap cars); reading here eventually had me realize I was getting hosed by [email protected] paying a 2.4% MER, and getting nowhere near my money’s worth for that big fee.

So I bailed on the bank per Mr. T’s advice, and after not even a year thus far have been very pleased with the results. Great performance, no brainer fees, and tax deductible too (did I mention I’m also allergic to taxes?).

Maybe not an earth shaking change, but I’m damn happy to have made it, and thankful for the info that inspired it.

#30 Ustabe on 01.21.20 at 6:09 pm

#5 Sail away on 01.21.20 at 5:09 pm

Maybe this blog attracts Debbie Downers.

All I know is I’m doing fine, and it sounds like IH’s entire extended family is doing fine. Is anyone else doing fine?

I’m doing fine as well. More importantly my millennial sons are too. Additionally their school/social circle all seem to be doing from OK to fine. Not a one is anywhere near the position we read about here.

Mrs. Ustabe and I waited 15 years before we had kids, as a result at 70+ years old I enjoy 27 year old boys (twins!). One just hit the million dollar net worth milestone, the other is not far behind. No bank of mom and dad either, rather an advance on their inheritance seven years ago…why make them wait until they are 50+ when the need is now? Our gift to them of $250K each has been turned into a million dollar (each) result in under a decade. Best investment I have ever made!

And it just keeps on getting better…

#31 BobC on 01.21.20 at 6:21 pm

#14 Black sheep

I just don’t understand how this is going to change anything. Looks like your being set up to get reamed sometime in the future.

https://business.financialpost.com/commodities/energy/trudeau-says-will-be-cash-back-from-federal-carbon-tax-in-provinces-without-levy/amp

#32 binky barnes on 01.21.20 at 6:29 pm

I am still listening to you, Garth.

#33 AGuyInVancouver on 01.21.20 at 6:32 pm

How many of those Bank of Mom & Dad down payments are funded by their HELOCs or Reverse Mortgages? Scary thought.

#34 MF on 01.21.20 at 6:46 pm

#5 Sail away on 01.21.20 at 5:09 pm

I would say I’m doing alright too.

I usually don’t think I am, after all I don’t own any RE, or drive a fancy car. But posts like yesterday’s and today’s spelled it out pretty clearly. I save around 40-50% of my earnings and have a little portfolio building up slowly. It helps if you work 7 days a week and don’t have time to spend, of course, but I’m still pretty frugal regardless.

No debt either. I fear debt. My biggest expense is my rent (which I hate paying).

So the message is getting out Garth. To some.

conan at #6 is right though. It’s tough seeing our leaders and central banks rewarding reckless behaviour. Thinking about reducing the stress test? Reducing interest rates? 30 year mortgages? Come on.. Who in their right mind thinks these are actually good ideas??

So it’s easy to see why people give up and go into debt. Being frugal and doing the right thing has left the rest of us feeling like we are being priced out.

It’s not FOMO, it’s FOPO (fear of being priced out). Rents are way too high. People would rather try to pay off a mortgage (with all the other negatives that go with it) than pay some other “landlord” who put 5% down’s own mortgage.

MF

#35 Long-Time Lurker on 01.21.20 at 6:58 pm

>Just checking in from the ether. Markets are dull now but I’m sure things will get exciting, later.

Anyone see Smokey? I have a hunch he made off with the loot.

Thank you, Garth, for continuing your blog!

>I might have gone defensive too early. It’s okay. I sleep better.

Paul Tudor Jones says this ‘crazy’ stock market run reminds him a lot of early ’99
PUBLISHED TUE, JAN 21 20207:34 AM
Yun Li

Billionaire investor Paul Tudor Jones said the stock market today is reminiscent of the latter stages of the bull market in 1999 that saw a giant surge that ultimately ended with the popping of the dot-com bubble.

“We are just again in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination,” Jones said on CNBC’s “Squawk Box” on Tuesday at the World Economic Forum in Davos, Switzerland. “It reminds me a lot of the early ’99. In early ’99 we had 1.6% PCE, 2.3% CPI. We have the exact same metrics today.”….

https://www.cnbc.com/2020/01/21/paul-tudor-jones-says-this-crazy-stock-market-run-reminds-him-a-lot-of-early-99.html

Watch CNBC’s full Davos interview with legendary investor Paul Tudor Jones
Duration: 10:13

Paul Tudor Jones, chairman of JUST Capital and chief investment officer of Tudor Investment Corporation, joins “Squawk Box” to discuss the markets, interest rates, the world economy and more.

https://www.msn.com/en-ca/money/news/watch-cnbcs-full-davos-interview-with-legendary-investor-paul-tudor-jones/vi-BBZb6Jv

#36 akashic record on 01.21.20 at 7:03 pm

#30 Ustabe

Awesome, congrats!

#37 Ian on 01.21.20 at 7:12 pm

what should we expect when finances are not taught at school or at home. People would rather talk about politics than personal finances. Our only public roll models is the government both federal and provincial who can’t seem to balance a budget in good times let alone bad ones. When you have generations of people learning that it is ok to never balance the books it makes the future look dismal.

Ian from Calgary

#38 Timmy on 01.21.20 at 7:14 pm

It’s more than due…if you have to pay 2K in property taxes and another 4k in utilities, insurance and condo fees, plus any special assessments, then why would anyone buy a condo?

#39 Keen Reader on 01.21.20 at 7:17 pm

I’m listening too! This blog definitely did not fail me: sold nine years ago and renting since, plus spreading the word to open minds. I’ve occasionally worried about missing the RE train, however our last three moves were not in bubble areas, so we likely didn’t. Meanwhile, absolutely no regret trying to best follow Garth’s B&D PF recommendations; this now puts us in a great position to jump back into RE, if our host ever gives us the cue and it makes sense for us at that time. Thanks a gazillion!

#40 crowdedelevatorfartz on 01.21.20 at 7:23 pm

@#141 Kathrine
“BTW, we were able to pay off house in 7 years and still travelled, went out for dinners”
+++++

Not bad.
Two incomes always helps.
Bought a house in the early 90’s with my brudder.
Paid it off in 12 years (BC prices and all that).
Lived there another 8 years mortgage free and socked a shite load of money into investments, then sold the house for almost triple what we paid for it.
Renting for now and investing the cash makes sense…the real estate Bubble in BC is deflating like a silent but deadly emanation in an elevator…..the smell will hit you when you least expect it.

As for my “lack” of education.
I did a few years of night school and correspondence to jack my qualifications to demand a higher salary.
Even though I could explain circles around the most “educated” of co workers.
Worked for several large companies with HQ back east.
The companies today are run by HR first and bean counters second.
A sure fire recipe to completely demoralize and demotivate even the most gung ho worker bee.

I now work in a totally different job and am part owner of a company.
Should have done it years ago.
Got tired of listening to people stupider than me spew the useless politically correct horse shit ad nauseum day in and day out as company profits tanked.
And then take the advice of lick spittles and back stabbers.
See ya later large multinational corp.
Nero would be envious of these people.

My advice?
Dont let those opportunities pass you by.
You dont want Shoulda, coulda, woulda… on your tombstone.

#41 Another Deckchair on 01.21.20 at 7:25 pm

@23 Linda:

“Am now reading an excellent book called ‘Do You Really Need It’ by Pierre-Yves McSween that my partner got out of the library.”

Good for you. (i.e. way to go!)

Your parents and/or grandparents probably practiced this, but without the benefit of reading a book.

One to think about – for every $1,000 you save per year, assuming the Trinity study safe 4% withdrawal rate, that’s 25K less saved you need.

Ramp that up to $10,000 – that’s a quarter million less you need to be financially independent for the rest of your lives.

How long will it take you to put $250,000 in investment savings? Saving 10K is a whole lot easier, especially once you start.

Thumbs up. :-)

#42 AR on 01.21.20 at 7:30 pm

2 Questions

1. How is the advice ‘the stock market always goes up over the long term’ different from the erroneous idea that ‘assets always rise’?

2. How do those who expect to live off the income from a diversified portfolio protect themselves from a collapse like ‘08 caused by those who aren’t addicted to credit.

The stock market is not an asset. Investors in correctly-balanced portfolios had an average annual return of +5% from 2008-10. – Garth

#43 Jack on 01.21.20 at 7:32 pm

IMF says a depression looms around the world…
https://amp.theguardian.com/business/2020/jan/17/head-of-imf-says-global-economy-risks-return-of-great-depression?__twitter_impression=true

#44 Tim on 01.21.20 at 7:38 pm

It’s over !!

Sell everything and leave Canada !!

The end of the world around the corner !!!

Nah , ….carry on Garth

#45 Bob in Hamilton on 01.21.20 at 7:41 pm

Still reading that old fart Garth….and still listening.

Keep your powder dry and don’t quit.

#46 This just in !! on 01.21.20 at 7:41 pm

No one has any savings !! New survey !!

It’s all a house of cards !!

Except the equity market !!

#47 cowtown cowboy on 01.21.20 at 7:43 pm

#83 Gen-Xer on 01.20.20 at 10:04 pm

#75 Ronaldo on 01.20.20 at 9:09 pm
#2 Andrewski on 01.20.20 at 3:50 pm
Parents of Mills, please stop yammering on how renting where you live is lost money, so buying is the only option. Today’s young workers need some sensible financial direction that does not have them confused.
——————————————————————
The Mills have just as much opportunity as the Boomers and GenXer’s had if they are willing to relocate away from the frothy areas as many of us did. There are many places in this country that are extremely affordable at today’s interest rates. You just have to be willing to make the move cut the cord. The other option is to stay where you are and whine.

—————————————————————–

Both of you out to lunch kind sirs.

Millennials got screwed and screwed hard. Tell me, what is the real estate value upside of these non-frothy areas you speak of? Will they go up 10 fold like a home in the GTA or YVR did in 25 short years? What are the job prospects or aspirations of opening a successful business in these best kept secrets? Please name one major town or city in Canada where real estate has not at least doubled or tripled in price or far more, in the past 12 years alone, where a young couple can attempt to make the most of their careers.

And how would you like to fork out $45,000 + per year in rent plus utilities and rental insurance, for the same home you bought for $80K? Oh ya I forgot interest rates were 18% for the 1st 5 years of my $60K mortgage…cry me a river. But just have these whiners move right? Like you had to?

It’s so easy to disparage when you were literally handed everything in the lottery era isn’t it? As a Gen-Xer, I consider myself to be relatively fortunate and just wince when I see what Canada has done to the millennials and future generations. Sold them down the river. And all we can do is keep telling them how lucky and entitled they are. They’ll be dancing on our graves and rightfully so.

Calgary is one place…Bought our current house, approx. 2100sf in 2006 for $390k, now worth around $650ish..only about a 50% increase in 14yrs…city is teeming with young professionals, money is good, lifestyle is great, hockey team sucks but the Oilers are on most nights!

#48 Lost...but not leased on 01.21.20 at 7:47 pm

MF posted #1..

THUS..it is written…
…I dare not speak ill of the overindulged gold -plated -pension snivel – servant class.

(..or ..dammit…I may get an A+++ grade in real world).

#49 Rico on 01.21.20 at 7:47 pm

I would sell and rent if I could.
How do I find a house to rent (in BC outside of the lower mainland) that is:
1. not a crack shack
2. dog friendly
3. near trails for dog and people exercise
4. nice (reasonable age or renovated, not on the freeway or overlooking the pulp mill, quiet neighbourhood)
5. $3300 per month

The rental options I can find online are extremely limited.

#50 the Jaguar on 01.21.20 at 7:48 pm

” Are we on the wrong path as a society? Sure feels like it. The goal of life is not a house, but we’ve made it so. ”

Sounds like Garth and Evan Siddall are on the same page to me.. No surprise, I adore them both. We are on the wrong path as a society, and it extends well beyond finances. Don’t get me started.
The Vancouver numbers are classic ‘Chickens coming home to roost’. Jaguar has an acquaintance in the GVA who owns about 5 properties. Very intelligent person with whom many conversations have taken place about the reality of that marketplace ( going down since March 2017 in Jaguar’s observation). In every discussion I was advised that ‘certain niche neighbourhoods’ would always hold and increase their value and the statistics did not apply to his holdings. Market might be down a little, but it is just a “blip” cause Vancouver is an ‘International City’. The same thing people in the GTA always say. Zipped my lip.
There is a storm coming. The canary in the mine are the insurance companies. A wise blog dog ( 5/9/2019) posted that borrowers are like drug users, but lenders are like drug dealers. That lenders are facilitating a destructive trade for their own profit.
Insurance companies like banks are ancient warriors, but I don’t see them getting left holding the bag. They are too smart for that to happen.

#51 Nonplused on 01.21.20 at 7:49 pm

“Alas, this blog has failed. Perchance it’s time to pack up the kibble and squeaky toys, the ETFs and the spreadsheets, and scamper off into the ether. After all, what’s the point? The nation ain’t listening.”

– Garth Turner

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.”

– Charles Mackay

Garth, you cannot reverse the insanity of a nation, who has gone mad as a herd. But you can and do change minds one by one. I guess the only question you should ask yourself is when you have done all you can.

Perhaps you should go to fewer postings per week or perhaps more guest bloggers? That way greaterfool.ca could continue to function but you could get some well earned time off.

Maybe it’s time to start running ads and hire someone to coordinate and moderate the site? Post appropriate and relative articles from more writers? I am sure Brian Ripley and others would love for you to mirror their posts or even write original content.

But in any case even Christ never saved a whole nation in his lifetime. He got his converts one by one.

Oh and by the way you did help a whole nation with the TFSA, but again, it is a thing for “”he who has an ear, let him hear”. I procrastinated for years but mine is topped up to 2019 now, and I’ll top it up again this year. I figure if you have money in a cash trading account it doesn’t make sense to leave it there so move it when it works tax wise.

—————

“Pity those who did not bail when the delusion was at its highest. How could so many actually believe an asset would rise in value forever, when none have done so before?”

What about equities? Ok, that is not a fair comparison because they are, at least the ones that last are, revenue generating businesses. But it’s not about value, it’s about price. There are not 2 but 3 certainties in life (since 1971): death, taxes, and inflation.

Everything that isn’t made in China has been inflating in price since 1971 and now even the things made in China are inflating in price. So that’s the problem people are faced with. If inflation is at 2%, and the price of new houses are affected as well, but you can get a mortgage right around 2%, how is anybody to resist? All of the money you pay in interest appears right back on your home equity. It is, literally, like living rent free.

That said the population has run wild with it, especially in YVR and YYZ. Corrections will come much as they do to the stock market when it gets ahead of itself. But YYC hasn’t really seen much in the way of increases since 2006 or 2007. That’s a long time ago so a slow melt has occurred. So the rent isn’t free in Calgary because even if the mortgage is only 2% the equity isn’t happening. It’s still about the same as rent though.

That slow bleed of 2% for year has absolutely destroyed purchasing power. What isn’t more expensive than it was in 1971? Milk? OMG cheese? Cars? Houses? Gas? Even gold, which should never change in price? I know deflation is a terrible thing because it puts the banks themselves into default, so inflation is the preferred route, but when interest rates and inflation are the same it means there is no point in saving, and you should buy all the things. Even the 50% understand this, somehow, instinctively I guess, since they can’t make a spreadsheet.

——————

So what about these helicopter parents that insist on financing their offspring’s home ownership prospects? Well, for most of them buying a house was the best decision they ever made. So they add the idea of home-ownership to the long list of things they think their children should do, like having kids. They want to make a little “mini-me”. It’s worked since 1971. All they know is what happened. You can’t blame them for that. I can’t remember what you called it, “recency bias” or something. People tend to extrapolate in straight lines. The straight line has been up. For all things, not just houses. But it is price, not value. But that’s the thing about inflation, it makes the debt go away. Unless it’s a credit card at 18% of course, those will kill you. The default rate must be incredible to justify those rates. How can the same person pay 2% on a secured loan and 18% on an unsecured loan? The 2% is artificial.

#52 meslippery on 01.21.20 at 7:51 pm

32 yorkville renter on 01.20.20 at 5:51 pm

#27 – is it behind the rear plate?
———————
Yes spring loaded with after market choke cable hooked up to give the 407 a picture of your gas cap.

#53 crowdedelevatorfartz on 01.21.20 at 7:52 pm

Well.
If people are really deep in debt….I know where they can get $150 …..

https://www.citynews1130.com/2020/01/21/burnaby-woman-paid-support-meng-wanzhou/

Only one problem.
You have to surrender your values.

#54 Dave on 01.21.20 at 8:01 pm

No one can afford housing in Vancouver…debt is out of control…NDP is taxing real estate to death BUT it won’t die.

What gives?

#55 Smartalox on 01.21.20 at 8:05 pm

Hey, remember the squatters of Moms4Housing from last week? Remember how they were squatting in a house owned by an evil faceless corporation, because they all had jobs and couldn’t decent homes? And how they were evicted and arrested in a media circus?

Well, it looks like all’s well that ends well:

https://www.thedailybeast.com/moms-4-housing-homeless-moms-cut-deal-to-buy-house-they-were-evicted-from?ref=home

Think of it as the ultimate ‘bully’ offer!
A new technique to try in Vancouver, perhaps?

#56 Genesis II on 01.21.20 at 8:06 pm

Alas, this blog has failed. Perchance it’s time to pack up the kibble and squeaky toys, the ETFs and the spreadsheets, and scamper off into the ether. After all, what’s the point? The nation ain’t listening.

How do you measure success/failure?
People still read and some even dare to post something useful.

#57 Headaches coming ... on 01.21.20 at 8:09 pm

it’s tax season again. I have paid attention and Garth has certainly helped with my bottom line … many thanx from the snowless LM. Well, the lower elevations that is.

#58 Smartalox on 01.21.20 at 8:11 pm

Fartz at #52:

Meng is paying actors $150 to stand outside the Vancouver courthouse and hold signs in support of Meng Whanzhou.

That’s a lot cheaper than they had to spend to get former Liberals to provide a similar service (surrendering their values, that is):
– Jean Chretien
– Eddie Goldenberg
– John Manley
– John McCallum

#59 The Base on 01.21.20 at 8:13 pm

According to the FBI, Mr. Mathews was a member of The Base, a group of white supremacist extremists who believe that the United States will descend into a race war and that they should accelerate its arrival with acts of violence.

_________________________________________

This is a lie. We only want to hasten the economic collapse using Memes and forums which radicalize mostly angry white men and virgins.

#60 A question! on 01.21.20 at 8:15 pm

Bonjour Mr. Turner, I agree that our economic situation is bad, and that a decade long of government and central bank policies have not provided a structural solution to this predicament. Further inflating the housing bubble, slapping on taxes, etc, are just short-term measures that suggest our politicians and central bankers are desperate. That begs the question, what set of measures do you believe would structurally address our debt bubble economy, without sacrificing 50% of Canadians in the process?

#61 FreeBird on 01.21.20 at 8:17 pm

One very early morning I saw a very dark grey line on the horizon and it seemed a good analogy for the world we all live in right now. Who knows how far off it is but there’s growing reasons to believe it’s coming. And not just a recession.

On a lighter note nice image of the old boy Bandit with the ship. Water draws many animals incl humans so not surprising he’s drawn to it even now. Good to see he’s still able to get out for walks and hopefully is comfortable and not in any pain. Large older dogs often suffer from arthritis in the hips as our family malamute/husky did. Dad carried her in the end when needed and mom made special home made meals. No doubt Bandit is also being the same care. Dogs deserve their own world. They’re better then us in so many ways.

#62 Brian Ripley on 01.21.20 at 8:19 pm

Canadians have for the last 20 years invested more outside of Canada than inside. See my Household Debt chart with the FDO-FDI plot; hence we would rather invest in production centers offshore.

With respect to our ZIRP and NIRP policy of the last decade, the low credit rates have spawned a massive residential construction boom… but wait…

I have updated my Census vs Housing Starts charts:
http://www.chpc.biz/housing-starts.html

Notice on the long term chart that for the last 50 years the census plot has been on an uptrend and housing starts on a downtrend. With that in mind, low rates for another decade will keep the FIRE sector (Financials, Insurance, Real Estate) employed.

Employed sure, but housing construction is a consumption pump to endless low skilled and relatively low wage activity.

Perhaps there is no way out of this trend of Canadians as prime global consumers with lots of credit.

Younger readers on this blog might want to consider pursuing scientific related education if they want to buck the trend of being trapped in a culture of consumption.

“A new scientific truth does not generally triumph by persuading its opponents and getting them to admit their errors, but rather by its opponents gradually dying out and giving way to a new generation that is raised on it. … An important scientific innovation rarely makes its way by gradually winning over and converting its opponents: it rarely happens that Saul becomes Paul. What does happen is that its opponents gradually die out, and that the growing generation is familiarized with the ideas from the beginning: another instance of the fact that the future lies with the youth.” Max Planck 1949 from WikiQuote

#63 Bytor the Snow Dog on 01.21.20 at 8:29 pm

#30 Ustabe on 01.21.20 at 6:09 pm sez:
#5 Sail away on 01.21.20 at 5:09 pm

“Maybe this blog attracts Debbie Downers.

All I know is I’m doing fine, and it sounds like IH’s entire extended family is doing fine. Is anyone else doing fine?

I’m doing fine as well. More importantly my millennial sons are too. Additionally their school/social circle all seem to be doing from OK to fine. Not a one is anywhere near the position we read about here.

Mrs. Ustabe and I waited 15 years before we had kids, as a result at 70+ years old I enjoy 27 year old boys (twins!). One just hit the million dollar net worth milestone, the other is not far behind. No bank of mom and dad either, rather an advance on their inheritance seven years ago…why make them wait until they are 50+ when the need is now? Our gift to them of $250K each has been turned into a million dollar (each) result in under a decade. Best investment I have ever made!

And it just keeps on getting better…”
—————————————————

So you married a woman 20 years younger than you!? Congrats!

#64 AR on 01.21.20 at 8:34 pm

Thanks.

Stock markets aren’t assets. Are portfolios assets?

#65 bill hilly on 01.21.20 at 8:45 pm

@#5 Sail away on 01.21.20 at 5:09 pm
Maybe this blog attracts Debbie Downers.

All I know is I’m doing fine, and it sounds like IH’s entire extended family is doing fine. Is anyone else doing fine?
___________________________________________

same here. friends and fam some mils even, all doing just fine. Wonder how many folks they polled to extrapolate to “50% of people are now within $200 a month of insolvency – unable to pay the bills.”? some serious fear mongering right there.

#66 Skatch on 01.21.20 at 8:50 pm

No failure. Many success stories have resulted from your knowledge, guidance, mentorship, and expertise.

Thank you!

Please don’t stop!

#67 NoName on 01.21.20 at 8:50 pm

Alas, this blog has failed. Perchance it’s time to pack up the kibble and squeaky toys, the ETFs and the spreadsheets, and scamper off into the ether. After all, what’s the point?

You are being bit to hard on yourself Mr T.

Just imagine “boring normalcy” if you don’t do blog and moderate comments. That is kind of life is for hipster, real man use tools, yours are words, so don’t you quit on us. What you do is working, and is working well.

Remember that confuse dude who contacted you, from few yrs back with negative net worth and big mouth to whom you took to woodshed over family financials? And soon after sent him home with an advice, dont sell a house, you cant live anywhere else cheaper than that, work on cash flow and build liquid assets.

I’ve heard that that family is doing much better now. Just for them alone you should recieve Order Of Canada. As for writing and moderating comments every day, that is invaluable. Im sure that some smart people can extrapolate magnitude of your advice since small talked happend.

You should print this and put this on a fridge.
https://imgur.com/a/RYFAqwB

#68 VicPaul on 01.21.20 at 8:56 pm

#5 Sail away on 01.21.20 at 5:09 pm
Maybe this blog attracts Debbie Downers.

All I know is I’m doing fine, and it sounds like IH’s entire extended family is doing fine. Is anyone else doing fine?

*********

You pose an uplifting spin and it’s good but – What’s fine?
We’ve raised three kids in an expensive city (where I played golf again last Sunday after a week off due to snow). I had some (much) good fortune and I do live primarily in gratefulness for our family’s health and all – but I have, since childhood, had this “delay my gratification” temperment that has helped/hindered me throughout my life…am I fine?
Of course, there are many gradations of fine.

M56BC

#69 will on 01.21.20 at 8:58 pm

might help if blog dogs share the link. how many of you dogs out there share the blog? how many times have you done so? when was the last time you shared? shared to FB or Twitter? or just shared the link in a text or email? Garth won’t ask us to do so but why don’t we just do this? Here’s the challenge: set yourself some goal to share the blog once a week or month or whatever. the goal is not to make Garth famous or generate more business although i’m sure he would be ok with whatever comes his way, if anything. no, the goal is simply to raise the level of RE/investment understanding. get more people on track and thinking intelligently and critically about what the hell they are doing.

#70 MF on 01.21.20 at 9:04 pm

#47 Lost…but not leased on 01.21.20 at 7:47 pm

Lol how dare you?

Reported to the authority of this blog (Garth).

Charge?

Your post registers a 7/10 on the sarcasm scale -above the safe, permitted, level of sarcasm for this blog!

MF

#71 april on 01.21.20 at 9:09 pm

Mobile homes in the Lower Mainland BC seem to be increasing in value not loosing value..What say someone?

#72 Bill Grable on 01.21.20 at 9:13 pm

Mr. Turner, I can only imagination the time and effort you put into this incredible blog. I will understand if the Amazons, Mrs. Turner and Bandit convince you to bury this – but – I sure hope that is not the case.

I have learned MORE from you and this ‘pathetic’ blog, than I did in 4 years of Economics, at University…I swear.

(*Full disclosure – Mr. Turner and his team take care of my Family – and we consider ourselves lucky).

Please, carry on… and enjoy those trips on the 103 (You folks in NS know the drill).

All the best from the west.

#73 Entrepreneur on 01.21.20 at 9:16 pm

I think the whole problem is with the system as we all know how hard T1 performed in the NWT to win this last election. No matter what “win.”

I think “this democracy” that we are saying to other countries that this is the way to rule a country like in HK right now. It is better but needs to be replaced to throw out the old and bring in new.

But “our democracy” is now orchestrated by the political parties to take control of the country. I think they forgot about the working people in the process (too many homeless people to say otherwise.)

It seems to me that Election Canada (or other bodies of power) does not have much power to control politicians.

Maybe one day we maybe able pick a person from one party or other that we like and not the party.

Thanks, GT, nice to have a voice, thanks again.

#74 CEW9 on 01.21.20 at 9:20 pm

#54 Smartalox on 01.21.20 at 8:05 pm

Re: Moms4Housing

What happens when one wants to move? Or sell? Or renovate? Or have another kid and want another bedroom, at the expense of one of the other moms? Or get a new partner, or pet, or the kids grow up to be teenagers?

This story is not over yet, and I don’t really think it will have a ‘happily ever after’ ending.

#75 ImGonnaBeSick on 01.21.20 at 9:38 pm

I’ve still been thinking about how best to comment on the Kids post from late last week… And it turns out Kevin Smith explains parenthood pretty well in the Jay and Silent Bob Reboot with Holden McNeil’s (Ben Affleck) monologue;

“Anyway, I’m just here to set the real story in motion. Because once you become a parent, you’re not the star anymore. You’re the stage. I’m just here to prop up my kid so she can put on
the show of her life, like my parents did for me, like theirs did before them. And if you’re lucky enough to have a kid, the tradeoff is you don’t really get a third act to your story, because the story changes. All of a sudden it’s not about you anymore… for the first time in your self-involved life… that’s okay. Kids are like our reboots, another chance to tell a brand-new version
of the same old story. I know I’m supposed to be teaching Amy stuff, but it’s like I’m learning from her every day.”

And that sums it up better than I ever could.

#76 WUL on 01.21.20 at 9:45 pm

@#5 Sail away on 01.21.20 at 5:09 pm

Maybe this blog attracts Debbie Downers.

All I know is I’m doing fine, and it sounds like IH’s entire extended family is doing fine. Is anyone else doing fine?

lucky…lucky…lucky…

Thanks for askin’. “Fine” doesn’t begin to describe it. I won the birth lottery. Born in Canada (Alberta) in ’56.

Big time lottery win.

The last thing I worry about is the state of my non-existent moolah portfolio.

Life is great. Especially after the back of a -34 degree cold spell in the Mac gets broke and the temp hangs near 0.

Cheers,

WUL

#77 Ronaldo on 01.21.20 at 9:49 pm

#8 Piano_Man87

D) Boomers are starting to retire, and sell their homes en masse, which will cause supply gluts
——————————————————————
The oldest boomers (myself being the oldest) started retiring 20 years ago and I still own my house and plan to be in it for as long as possible, maybe another 10 years so I don’t agree with your above statement. I did not see any supply gluts when I retired. Most of the boomers in my age group have no desire to move into a concrete box in the sky. We are all too well aware of the dangers of owning these things. For many of us, we already went this route with our first homes. Never again for me anyway. So, don’t expect a rush of SFDs coming on the market anytime soon. Unlike what some think, boomers will not be selling off their single family homes and rushing into condos. That is wishful thinking. Every day we hear horror stories regarding condos and like Garth mentioned an insurance time bomb. The youngest of the boomers are turning 55 this year and I doubt that they plan to sell their SFDs any sooner than the older boomers.

#78 Kona on 01.21.20 at 9:55 pm

Problem with the bank of Mom and Dad fronting Squirt his down payment is dear old parents don’t have it either. Mom and Dad are writing a cheque from their HELOC to cover it.

#79 SoggyShorts on 01.21.20 at 9:57 pm

#63 AR on 01.21.20 at 8:34 pm
Thanks.
Stock markets aren’t assets. Are portfolios assets?
*************************
Sort of. A portfolio contains several assets.

You want to know how a portfolio differs from a house and its simple:

Imagine if you owned not 100% of one house, but 0.00000001% of a million houses in 90 different countries. THAT would be much much safer and more likely to go up consistently over the long term.

Even better, a portfolio isn’t limited to real estate, instead, it’s spread out among everything from healthcare, financials, industrial, energy, debt… actually everything and ideally everywhere

Really the only thing that can drop an entire portfolio for an extended period is an apocalyptic scenario like a plague, meteor strike etc. that wipes out 30% plus of the population and even then some industries will probably find a way to thrive.

#80 paracho on 01.21.20 at 10:07 pm

Crazy world we live in !
Most Canadians are saving less than 1% of what they make . Most going towards housing via mortgages . The average Canadian is over indebted .
Yet they crave more .
Now StubHub is allowing folks to purchase concert and sporting tickets on credit . Not via a credit card but via StubHub !!!
They will allow folks to purchase the tickets and then pay back with an interest rate over a one year period .
https://www.bloomberg.com/amp/news/articles/2020-01-21/stubhub-will-now-let-you-go-into-debt-to-nab-super-bowl-tickets?__twitter_impression=true

#81 Treasure Island CEO - 103,345,454.88 Offshore on 01.21.20 at 10:12 pm

This blog is a success due to the wisdom in comments left by yours truly for many to benefit from.

I am the realist to ever walk the earth.

Let’s get right to it. The Canadian performance review is up. 2 out of 5 for most, meaning you would be fired in this type of a situation with an employer. 3 out of 5 has you on probation.

But can we really blame consumers? Not entirely. These ridiculous policy swings by the gov and BoC are screwing everybody a fueling house price swings. Most people are scrambling to have a decent roof with enough room for the kids.

My lender friend in Vancouver says most of his deals in his busy office now have 4, 5 and even 6 co-signers. Although, that might seem scary – these are smart families pooling together to make things work. Grandma watches the kids while parents report to work and bring money home for all to share and prosper.

Further, Dane Eitel is wrong about Vancouver. Ben Rabidoux as of a few weeks ago has pointed out that current RE activity in Vancouver points to double digit price gains this spring and the only thing holding back a melt-up is the stress test. There are multiple offers flying right now on stuff in Vancouver. Ben is right. Dane is gong off some technical charting BS disconnected from underlying fundamentals.

5% price gains this spring in Vancouver. The demand is insane right now. And if that stress test is tweaked the doors are going to be blown off and we will be right back to 2016.

I thought about this a bit. I don’t think anyone should touch the stress test, even though it is unfair, and I don’t think it will be based on insanity returning to the markets even with the stress test.

Now, if Dane’s forecast comes true, then the gov will tweak the stress test making Dane look foolish. The fact is, real estate is the Canadian economy and the Canadian government wants economic stability. The gov can lose control but I would not bet against it. The odds are on the house.

#82 Treasure Island CEO - 103,345,454.88 Offshore on 01.21.20 at 10:13 pm

This blog is a success due to the wisdom in comments left by yours truly for many to benefit from.

I am the realist to ever walk the earth.

Let’s get right to it. The Canadian performance review is up. 2 out of 5 for most, meaning you would be fired in this type of a situation with an employer. 3 out of 5 has you on probation.

But can we really blame consumers? Not entirely. These ridiculous policy swings by the gov and BoC are screwing everybody a fueling house price swings. Most people are scrambling to have a decent roof with enough room for the kids.

My lender friend in Vancouver says most of his deals in his busy office now have 4, 5 and even 6 co-signers. Although, that might seem scary – these are smart families pooling together to make things work. Grandma watches the kids while parents report to work and bring money home for all to share and prosper.

Further, Dane Eitel is wrong about Vancouver. Ben Rabidoux as of a few weeks ago has pointed out that current RE activity in Vancouver points to double digit price gains this spring and the only thing holding back a melt-up is the stress test. There are multiple offers flying right now on stuff in Vancouver. Ben is right. Dane is gong off some technical charting BS disconnected from underlying fundamentals.

5% price gains this spring in Vancouver. The demand is insane right now. And if that stress test is tweaked the doors are going to be blown off and we will be right back to 2016.

I thought about this a bit. I don’t think anyone should touch the stress test, even though it is unfair, and I don’t think it will be based on insanity returning to the markets even with the stress test.

Now, if Dane’s forecast comes true, then the gov will tweak the stress test making Dane look foolish. The fact is, real estate is the Canadian economy and the Canadian government wants economic stability. The gov can lose control but I would not bet against it. The odds are on the house.

#83 Doug t on 01.21.20 at 10:26 pm

I remember in the 70’s listening (barely) to adults going on and on and on about “adult” stuff like saving money, savings bonds, job security (aka pension job) etc and now I look at My son and many of his friends and just admire how they hardly give 2 sh*ts about any of that – good on them – your either a slave to the system or you take a different fork in the road

#84 Eco Capitalist on 01.21.20 at 10:31 pm

There is no point worrying about things beyond your control. Que sera, sera.

Faith manages.

#85 Ustabe on 01.21.20 at 10:33 pm

So you married a woman 20 years younger than you!? Congrats!

Not sure how you could come up with that. But, seeing as how you seem interested…almost 10 years younger.

She was almost 18, I was 27…I think. Scandalous in its time, tho.

#86 Tony on 01.21.20 at 10:37 pm

Re: #46 cowtown cowboy on 01.21.20 at 7:43 pm

Edmonton, Alberta peaked way back in October 2007. Most resale apartments and resale townhouses are selling for less then half today (not double or triple, less than half) of what they sold for way back in October 2007.

#87 Phylis on 01.21.20 at 10:44 pm

#5 Sail away on 01.21.20 at 5:09 pm Yes but i rely on others doing well in the future too. Is that status quo? I’ve guided others but am limited in my reach. Best to watch the seeds take root. Some will, some won’t.

#88 Boris Corbyn on 01.21.20 at 11:24 pm

#13 $93 monthly for cellphone?

How about using prepaid with lucky mobile or public mobile? Starts at $15. Does help I hate talking to people. Broadband? Fiber, unlimited with Virgin. TV, netflix has more than enough video to watch multiple lifetimes. Priorities people, priorities

#89 Ponzius Pilatus on 01.21.20 at 11:28 pm

5 Sail away on 01.21.20 at 5:09 pm
Maybe this blog attracts Debbie Downers.

All I know is I’m doing fine, and it sounds like IH’s entire extended family is doing fine. Is anyone else doing fine?
/———————————-
Thanks for asking.
I just sold my mansion in Vancouver.
Cleared 4 mill.
Happy as a clam.

#90 yorkville renter on 01.21.20 at 11:38 pm

#51 – Yes! Great guess … its mostly because I drove absolute junkers in the late 90s and early 00s. I drove many an 80s GM boat

#91 TurnerNation on 01.21.20 at 11:39 pm

Look at the new master-planned Prefecture our elites have planned.
Our Party members + developers + bankers = uppa upa.
We are a tax farm camp nothing more.

How else is this explained? Anyone asking for it? Anyone needing it? Anyone to fill it?
Feel like cramming into tiny condos in crowed areas? Ok…

https://www.insauga.com/photos-history-making-18-million-square-foot-development-planned-for-mississauga

On Jan. 21, representatives from Oxford Properties and AIMCo, all levels of government and The Daniels Corporation appeared at Square One to announce the forthcoming Square One District mixed-use community.

At the presentation, which took place in the Grand Rotunda in front of Holt Renfrew in the shopping centre, Oxford and AIMCo unveiled the new 130-acre, 18 million square foot, master-planned, 35,000-person mixed-use community.
*** Square One District is the largest mixed-use downtown development in Canadian history. ***

#92 yvr_lurker on 01.21.20 at 11:50 pm

inanced by their families – up from 70% five years ago. And while it’s laudable Mom & Dad want to see Squirt buy his first condo and become a fully-functioning indebted adult, the reality is such buyers are not worthy. They need a handout just to make the downpayment – stark proof they’re taking on an obligation which is beyond them. Odds are if the Bank of Mom didn’t exist, buyers would dry up and prices cascade lower. We are fools.

————————-
I think Garth lives in a world that does no longer exists. In 2000 there was no need for Mom and Dad to provide a huge amount of cash to their kids to buy something. It was expensive but largely affordable. Now in YVR, without this “family plan” there is very little chance to be able to buy even a starter place without influx from parents. A 2000 sq foot townhouse in Port Coquitlam would be 650–850K. Do you expect a 30-35 year old couple to have saved 200K (without debt) to be able to get in the door in such a place? Going for advanced training, paying off student loans, etc.. it would be tricky to get 200K saved by age 30-35. Should these people move to Chilliwack? Hope? Chibougamou? Or should be say simply, too bad … so bad. The bank of Mom and Dad is needed in YVR, but of course only if the kids can carry the rest.

The false assumption that is made with regards to housing is to treat the pool of house buying population as a “closed system”. This completely neglects the huge influx of new immigrants (some of whom are very well off, or are used to living in one house with extended family and a large number of relatives all under one roof and earning an income… lI realize that some innigrants are not well off and just starting out….). Tis group puts much pressure on the real estate market, driving prices forward…. and the Federal Gov’t has full control to turn this tap off and on to the detriment of local residents….If Hong Kong goes south, just wait till we see what fraction of the 300K Canadian citizens end up in YVR…. even 5% of this total makes a huge impact…..

#93 Sail Away on 01.22.20 at 12:06 am

So I looked into the Australia fires and it turns out:

1. The Australia ecosystem is adapted to, and requires, fire
2. The 2019/2020 fires were not a record. Records have been kept since 1851 and there have been much larger fires.
3. Africa has more and larger fires than any other continent every year. Its ecosystem, like Australia’s, also requires fire

Apparently the climate apocalypse has not yet begun. Until next week when a single sick polar bear will be filmed and extrapolated to represent THE END OF THE WORLD

#94 TurnerNation on 01.22.20 at 12:35 am

Yesterday’s blog turned into a disc brake fest.
What about drum brake. I still remember how to, the tools and methods. Adjust the drag on on the shoes, file the ridge off the drums (no lathe); Adjust up the E-brake. Might as well re-pack the bearings while there. Hello cotter. Now that was more work than Discs.

Anyway for year I’ve predicted soon that govt policies will see families turfed to the street out of perfectly good housing. Why? Mandatory energy audits resulting in big mandatory repairs o rendering house un-salable; carbon taxes; I didn’t see the full scope of condo Insurance being used a a weapon – that rural areas would be declared uninsurable and forcing people into crowded crime ridden cities was my take.

Even worse. Silent weapons at the ready: condo insurance, carbon taxes, energy audits.

#95 Diharv on 01.22.20 at 12:47 am

You can’t fix stupid, and thats exactly what 50% of people are, financially stupid. They are blind and deaf to facts and reason, but are swayed by idiocy in the form of parental or inlaw advice. So, forget about them and keep on what you are doing . 50% of us are paying attention.

#96 IHCTD9 on 01.22.20 at 2:07 am

#67 VicPaul on 01.21.20 at 8:56 pm

…What’s fine? We’ve raised three kids in an expensive city (where I played golf again last Sunday after a week off due to snow). I had some (much) good fortune and I do live primarily in gratefulness for our family’s health and all – but I have, since childhood, had this “delay my gratification” temperment that has helped/hindered me throughout my life…am I fine?
Of course, there are many gradations of fine.

M56BC
——

We are cut from the same cloth. I too suffer from the delayed gratification thing. After 20 years of dealing with the priorities in life, I struggle to begin dispensing with the mindset. You don’t hear much about this phenomena, but I don’t think it’s good. You kind of become a slave at some point, like a Scrooge; stashing cash even though you have enough.

IMHO, you are fine when your sensible financial goals have been achieved. Mortgage paid, kids raised and launched, retirement funding on track, plus whatever else you may have made a financial priority. You get these things under the bridge, and then it’s time to start letting go of the purse strings.

25+ years ago, I was at the local drag strip bracket racing my 400ci SBC swapped S10, when I saw a ‘68 Camaro pull into the staging lanes. When his turn came, he launched like a rocket ship (1.3 second 60’ I found out later) pulling the wheels and running mid 9’s which was awesome at the time.

I tracked him down in the pits to have a look see and chatted with the guy. This car was his dream since he was a kid, but life and family took priority. He waited 2 decades to realize the dreams of his youth, and was having a ball. The car was awesome, all motor 540” big block that must have been putting down 750+ HP. Everyone was checking out the car as he was kicking ass and taking names all night. It just screamed!

I’m finding it tough to do what this guy seemed to do so easily, but I’m working on it. My boss says I should just go out and buy a nice new truck to get the ball rolling.

Maybe in a few years…

#97 Samuel Beckworth on 01.22.20 at 3:38 am

Poloz is still dancing around ensuring uncertainty in our markets. Pity the poor businesses that have to rely on risky currency hedges because of the silly billy approach to managing an economy that the BOC displays.

Trump gave a brilliant speech at Davos, likely scared the crap out of the globalist goons. But what a speech!! Pragmatic, confident, futuristic, calm, reliable, smart, adult, mature, visionary. What a leader. He didn’t leave anything out.

Every leader who isn’t serving the citizens of their respective countries was called out in no uncertain terms. It’s small wonder Trudeau is in hiding. Trumps shadow is death to the socialist malcontents. Canadians are waking up and will demand the same. There is only two things that drive mass populations, fear and greed. The sweeping programs like communism and fascism have only appeared at the business end of a gun, are short lived in history. Humans want freedom of expression , it’s in our DNA. The fiddly gadflies like our darling Justin are passing fads, mistakes in history.

#98 Slow Canada on 01.22.20 at 4:04 am

Garth, please don’t abandon your faithful few. We will be the ones to save this country, or at least rule over it, I presume.

Yes, we are on the wrong path as a society, and that is a hard thing to swallow. But what can we do except have faith that reality will win out, accompanied by much wailing and gnashing of teeth, by those who refused to listen.

#99 Dog Thoughts on 01.22.20 at 4:15 am

Sometimes the fridge throws out crunch water.

This is way better than water.

Because of the crunch.

#100 back to reality on 01.22.20 at 6:41 am

“How could so many actually believe an asset would rise in value forever, when none have done so before?”
============================
The truth is that home prices go up and down just like investment markets and over time do continue to rise just like the markets. The question is, can home owners endure a lengthy downturn in the housing market?

#101 G. on 01.22.20 at 7:32 am

TurnerNation

**that rural areas would be declared uninsurable**

Super creepy dude, you could be right. A few months ago I was calling around for insurance quotes on my dream home in the country, one company we got halfway thru the quote, was going well, and she asked is the property is over 15 acres. I said yes. She says, sorry, it is? Oh, we can’t insure it then, we don’t insure anything over 15 acres.

I’m like, what friggin difference does it make if I have an extra ten acres of trees? But we all know there’s a concerted effort on to force everyone into urban 5G hives.

#102 crowdedelevatorfartz on 01.22.20 at 7:50 am

@#87 Ponzi Plot
“I just sold my mansion in Vancouver.”
++++

So, you’re taking your money and heading back to Austria?
I hear everything is better there.

#103 crowdedelevatorfartz on 01.22.20 at 8:05 am

@#80 Trash on the beach
“5% price gains this spring in Vancouver. The demand is insane right now….”
+++++
Stress test?
Pfffft.
The local banks are the ones loaning the money not the idiots in Ottawa.

You might want to clean your glasses.
I’m seeing the same houses listed for months, de-listed, relisted, ….. sitting.
Soon to be flogged as a “new listing!” for the second, third, fourth time in a year.
I’m not seeing “sold” signs.
More 40+ story condo towers almost finished and ready to hit the Spring market again so the fools that bought in 2016 can flip for a loss…
This Spring and Summer will be a bloodbath.

Add in the market reaction to the Corona virus spreading to Washington State yesterday.
Then we have the perfect scenario.
A rapidly spreading, mutating flu virus added into …..
Chinese New Year!
Toss in HUNDREDS of MILLIONS of chinese new year commuters coughing, sneezing, hacking in airports, subways, trains….. all over China in the next 10 days and get ready….Mr Virus and Mr Market will not be amused.

#104 Remembrancer on 01.22.20 at 8:06 am

#98 back to reality on 01.22.20 at 6:41 am
“How could so many actually believe an asset would rise in value forever, when none have done so before?”
============================
The truth is that home prices go up and down just like investment markets and over time do continue to rise just like the markets. The question is, can home owners endure a lengthy downturn in the housing market?
—————————————————–
The experience in the Upside Down markets not withstanding, historically, real estate would be a nice inflation hedge, not an “investment” unless significant improvements were applied – ie take a “rustic” barn and turn it into a 3 BR less “rustic” dwelling. Then this Old House got over run by the serial renovator for profit investor seminar dudes and bruhs crowd…

I blame reality TV for a lot of our current ills…

#105 Remembrancer on 01.22.20 at 8:12 am

#92 TurnerNation on 01.22.20 at 12:35 am
Yesterday’s blog turned into a disc brake fest.
What about drum brake. I still remember how to, the tools and methods. Adjust the drag on on the shoes, file the ridge off the drums (no lathe); Adjust up the E-brake. Might as well re-pack the bearings while there. Hello cotter. Now that was more work than Discs.
—————————————————
Must be an age thing, no one waxing poetically about the joys or manliness of tuning dual carbs either…

#106 Dharma Bum on 01.22.20 at 8:20 am

Pity those who did not bail when the delusion was at its highest. – Garth
——————————————————————–
When the government is quite unobtrusive,

People are indeed pure.

When the government is quite prying,

People are indeed conniving.

Misery is what happiness rests upon.

Happiness is what misery lurks beneath.

Who knows where it ends?

Is there nothing correct?

Correct becomes defect.

Good becomes ominous.

People’s delusions have certainly lasted long.

~ Lao Tzu (Tao Te Ching ,58)

#107 Tater on 01.22.20 at 8:30 am

#138 Sail away on 01.21.20 at 3:57 pm
#136 Tater on 01.21.20 at 2:45 pm
#130 Sail Away on 01.21.20 at 1:06 pm

————————-
I call it a 532% return since 2013.
Tesla profit literally bought my Tesla. It was worth paying the cap gains tax for the profound simplicity.
—————————————————-
Heard the same from doctors in 99 (long all sorts of tech stuff), and from home flippers I knew in the US in 07.

Assets that can’t generate a return outside of price appreciation are doomed. Eventually. Some will get out before that, most won’t.

————————————

Whoops, sorry, I was just doing the cash dance.

But yes, I hear what you’re saying, uh huh. Remember you said the same thing back at 300% return?

Have you noticed SpaceX also continues to succeed wildly?
—————————————————————-

Succeed wildly you say? I assume you’ve seen financials? Just kidding, I know you haven’t and have no basis to claim they are succeeding.

Why not lever your Tesla long? Free money for you.

#108 the ryguy - In cabo on 01.22.20 at 8:49 am

After all, what’s the point? The nation ain’t listening.
—————————————————————

The couple times you’ve humble-bragged about the views & interactions with this ‘pathetic’ blog would say otherwise Mr T. There is only one other Canadian “content creator” I can think of that comes close to your numbers..and you do it with dry content and words..ok you cheat a little bit with the dog pics.

Sleep easy knowing that you have done your part, and then some, for strangers who you’ll likely never meet.

#109 milly on 01.22.20 at 9:05 am

The real estate madness continues “https://www.thestar.com/politics/provincial/2020/01/21/should-ontario-developers-be-allowed-to-hire-and-pay-their-own-building-inspectors.html”

I would not buy any new condos that are “self inspected” that’s for sure. Doug Ford is clearly bought by developers who want to keep the real estate gorge fest going.

#110 IHCTD9 on 01.22.20 at 9:26 am

#90 yvr_lurker on 01.21.20 at 11:50 pm

…The false assumption that is made with regards to housing is to treat the pool of house buying population as a “closed system”. This completely neglects the huge influx of new immigrants (some of whom are very well off, or are used to living in one house with extended family and a large number of relatives all under one roof and earning an income… lI realize that some innigrants are not well off and just starting out….). Tis group puts much pressure on the real estate market, driving prices forward…. and the Federal Gov’t has full control to turn this tap off and on to the detriment of local residents….If Hong Kong goes south, just wait till we see what fraction of the 300K Canadian citizens end up in YVR…. even 5% of this total makes a huge impact…..
___

You are not wrong here, it only takes one house on the block to sell for a ridiculous price, then everyone else asks the same, happened to my little hood this spring thanks to some GTA exiting Boomer retirees buying in – a bidding war even broke out on one place. Realtors regularly look at recent local sales to establish price, and so does the city for taxes – and everyone involved wants the the price up.

Beyond that, an area built up with 4-5 persons/house in mind, which now has 15-20 people/house is going to have all kinds of issues down the road. Some new development builds have even been protested at City Hall on occasion because the housing planned is “too small”. The “need” was given for giant monster homes with 8 bedrooms and 5 bathrooms. Homes that 30-40 or so years from now will probably be useless and unsaleable to just about anyone for a giant pile of reasons.

It’s just one more reason to get the hell out of the GTA/GVRD unless you plan on winning the lottery, or are moving in with 20 of your aunts, uncles, cousins, etc. There will be no relief or fix, and in fact – living conditions are going to get WORSE.

There are the RE lotto winners cashing out with a smile, and then there is everyone else. Big Canadian cities will someday house only the rich, and the desperate, anyone with the ability to exit will do so, and the move has already begun.

#111 IHCTD9 on 01.22.20 at 9:43 am

#103 Remembrancer on 01.22.20 at 8:12 am
#92 TurnerNation on 01.22.20 at 12:35 am
Yesterday’s blog turned into a disc brake fest.
What about drum brake. I still remember how to, the tools and methods. Adjust the drag on on the shoes, file the ridge off the drums (no lathe); Adjust up the E-brake. Might as well re-pack the bearings while there. Hello cotter. Now that was more work than Discs.
—————————————————
Must be an age thing, no one waxing poetically about the joys or manliness of tuning dual carbs either…
___

Dual whats? :)

My Manly common sense tells me to send brake shoe jobs to a Pro. I can do ’em, and have done them a few times years ago – but that is how I know to just send it to the garage! Thankfully, drums are pretty rare these days on light duty vehicles.

Vehicles sure have got a lot easier to work on these days. Along with easy disc/pad changes, compare a wheel bearing job to what they used to be. We had a Hyundai Elantra, if I had the car jacked up, wheel off, and my tools all laid out – I could change a rear wheel bearing in that thing in 10 minutes. Two bolts for the caliper, the disc just slides off the studs, and then one big nut to get the hub off. New hub was only 99.00 too!

#112 Sail Away on 01.22.20 at 9:50 am

#105 Tater on 01.22.20 at 8:30 am
#138 Sail away on 01.21.20 at 3:57 pm

Re: Tesla
————————————

Whoops, sorry, I was just doing the cash dance.

But yes, I hear what you’re saying, uh huh. Remember you said the same thing back at 300% return?

Have you noticed SpaceX also continues to succeed wildly?
—————————————————————-

Succeed wildly you say? I assume you’ve seen financials? Just kidding, I know you haven’t and have no basis to claim they are succeeding.

Why not lever your Tesla long? Free money for you.

————————————

Levering at a record high wouldn’t be prudent.

I’d be happy to pass along some other investing tips as well, because helping others is the greatest gift.

#113 jess on 01.22.20 at 9:54 am

pwc is “shocked” rlly?

Dos Santos
https://www.icij.org/investigations/luanda-leaks/

https://www.icij.org/investigations/luanda-leaks/pwc-head-shocked-and-disappointed-by-luanda-leak-revelations/

Now BBC Panorama has been given access to more than 700,000 leaked documents about the billionaire’s business empire.

Most were obtained by the Platform to Protect Whistle-blowers in Africa and shared with the International Consortium of Investigative Journalists (ICIJ).

They’ve been investigated by 37 media organisations including the Guardian and Portugal’s Expresso newspaper.

who checks the checkers
http://retheauditors.com/2019/06/26/what-are-the-chances-of-a-significant-sanction-or-fine-for-kpmg/

#114 Sail Away on 01.22.20 at 10:00 am

@#87 Ponzi Plot

I just sold my mansion in Vancouver
Cleared 4 mill

——————————–

Good timing. Cheers!

Glad to hear markets are moving. I’d be very happy to clear 2.4 on my Van non-mansion this spring. Maybe Harry and Meghan will buy?

#115 Ottawa on 01.22.20 at 10:04 am

Hi Garth,
I am reading and listening your blog.

Regards,

#116 James on 01.22.20 at 10:16 am

#35 Long-Time Lurker on 01.21.20 at 6:58 pm

>Just checking in from the ether. Markets are dull now but I’m sure things will get exciting, later.
Anyone see Smokey? I have a hunch he made off with the loot.
Thank you, Garth, for continuing your blog!
__________________________________________
My conjecture is that he is on a protracted vacation somewhere or in rehab. There is no way he would have made off with any loot as he is way too much of a narcissist and loves to rub us all the wrong way just to get a rise out of us. The other thought is that he has tripped up on his TN-1 or perceives the Orange guy’s demise is looming. Of course his wife is a millionaire with several millions of ill-gotten gains, hummmm perhaps they are on the run and sipping piña coladas in Rio.

#117 Where are they? on 01.22.20 at 10:21 am

What has happened to Smoking Man, Flop, Dolce Vita? I (mostly) enjoyed comments from them all.

#118 Halifax on 01.22.20 at 10:27 am

Hi Garth,

Thanks for all that you do, despite the madness of the masses.

I for one am terrified, perhaps to a neurotic extent, about the debt and asset inflation that has occurred here in Canada. While I am a natural/habitual saver and investor that has been blessed by stock market growth over the past decade, I am terrified that I will be left footing the bill for my irresponsible peers who have been distracted by shiny baubles across the country.

It sometimes feels like the homeowners/buyers and debt slaves of this country are walking around with a gun to their head, daring politicians to have the guts to “correct” the market. If anything happens to their precious home equity, we are all doomed, and they know it.

#119 Xoxo exbroker on 01.22.20 at 10:33 am

#87 PP, a real estate lottery doth not an investor make. The vast majority of novice investors lose it all with 5 years. Good luck, ‘ cause watcha gonna do now? Markets hot, it might cool down, can you pick the right day to get in? That’s usually the day before it dumps. You’re on shaky ground and the next earthquake is just around the corner. Advisors will love you though, a point and a half here and another point there and you’re paying six figures for management and advice. That four Mill will evaporate in no time. And, sharks abound, don’t be bragging.

#120 Sold Out on 01.22.20 at 10:43 am

#117 Xoxo exbroker on 01.22.20 at 10:33 am
#87 PP, a real estate lottery doth not an investor make. The vast majority of novice investors lose it all with 5 years. Good luck, ‘ cause watcha gonna do now? Markets hot, it might cool down, can you pick the right day to get in? That’s usually the day before it dumps. You’re on shaky ground and the next earthquake is just around the corner. Advisors will love you though, a point and a half here and another point there and you’re paying six figures for management and advice. That four Mill will evaporate in no time. And, sharks abound, don’t be bragging.

xxxxxxxxxxxxxxxxxxxxxxxx

Sour grapes much?

#121 Ronaldo on 01.22.20 at 11:45 am

#84 Tony on 01.21.20 at 10:37 pm
Re: #46 cowtown cowboy on 01.21.20 at 7:43 pm

Edmonton, Alberta peaked way back in October 2007. Most resale apartments and resale townhouses are selling for less then half today (not double or triple, less than half) of what they sold for way back in October 2007.
—————————————————————–
Have a realtor friend who bought a condo at the peak for half mil as a rental investment. He tells me that he would be lucky to get $120 for it. He is stuck renting it as the cheque to the bank would clean him out if he were to sell it. Many in this position. I see the same thing happening in the lower mainland and GTA.

#122 Tater on 01.22.20 at 11:48 am

#110 Sail Away on 01.22.20 at 9:50 am
#105 Tater on 01.22.20 at 8:30 am
#138 Sail away on 01.21.20 at 3:57 pm

Re: Tesla
————————————

Whoops, sorry, I was just doing the cash dance.

But yes, I hear what you’re saying, uh huh. Remember you said the same thing back at 300% return?

Have you noticed SpaceX also continues to succeed wildly?
—————————————————————-

Succeed wildly you say? I assume you’ve seen financials? Just kidding, I know you haven’t and have no basis to claim they are succeeding.

Why not lever your Tesla long? Free money for you.

————————————

Levering at a record high wouldn’t be prudent.

I’d be happy to pass along some other investing tips as well, because helping others is the greatest gift.
————————————————-

Would have been prudent mid December, or early Jan. Or last week.

If you’re going to trade momentum, might as well do it properly.

But, since you’re offering tips, before I can evaluate them, can you tell me your CAGR, Sharpe and Sortino for the last 5 year? Money weighted, please.

#123 Ronaldo on 01.22.20 at 11:51 am

#91 Sail Away on 01.22.20 at 12:06 am
So I looked into the Australia fires and it turns out:

1. The Australia ecosystem is adapted to, and requires, fire
2. The 2019/2020 fires were not a record. Records have been kept since 1851 and there have been much larger fires.
3. Africa has more and larger fires than any other continent every year. Its ecosystem, like Australia’s, also requires fire

Apparently the climate apocalypse has not yet begun. Until next week when a single sick polar bear will be filmed and extrapolated to represent THE END OF THE WORLD
—————————————————————-
This is interesting

https://electroverse.net/historical-data-destroys-the-global-warming-myth/

I am sure all the incinerated wildlife feels better now. Thanks for diminishing the loss. – Garth

#124 Sail away on 01.22.20 at 11:56 am

Good call on REITs by Doug Rowat in March, and Garth on preferreds about the same time.

REIT indexes up around 8-10%
Preferreds up between 5-12%

Plus succulent dividends for both.

#125 IHCTD9 on 01.22.20 at 12:43 pm

#115 Where are they? on 01.22.20 at 10:21 am
What has happened to Smoking Man, Flop, Dolce Vita? I (mostly) enjoyed comments from them all.
___

IIRC, Dolce got butt hurt when Mr. T called him out on an uncouth post, and has since disappeared. Too bad, a good poster and my Italian was improving greatly.

Not sure where Flop went, hopefully he’ll be back. I see the odd post from SM. Short and sweet.

#126 Sail away on 01.22.20 at 12:45 pm

#120 Tater on 01.22.20 at 11:48 am
#110 Sail Away on 01.22.20 at 9:50 am

———————————-

I’d be happy to pass along some other investing tips as well, because helping others is the greatest gift.

———————————-

…since you’re offering tips, before I can evaluate them, can you tell me your CAGR, Sharpe and Sortino for the last 5 year? Money weighted, please.

———————————-

Moses’s stone tablet rules didn’t include interpretation or user instructions.

Let’s stick with that model.

#127 Steven Rowlandson on 01.22.20 at 12:45 pm

“In this scenario, renters win. Owners pay.”

The renters lose too except the illusion is a bit better.
They get to pay for the use of something without the other responsibilities. What they pay in Usury is lost to them.

To be Churchillian about it. Never in the history of real estate have so many paid so much for so little! Never!

#128 Sail away on 01.22.20 at 1:07 pm

“I am sure all the incinerated wildlife feels better now. Thanks for diminishing the loss. – Garth”

——————————

Well… data is emotionless. It’s just information.

We can be sympathetic while also acknowledging that there is a history of fires in these geographical areas. It doesn’t diminish the loss to accept this, and might prevent people from building in historically known fire-prone areas.

Sympathy for suffering? Yes. Being skeptical of claims of unprecedented climate change disaster? Also yes.

#129 Tater on 01.22.20 at 1:12 pm

124 Sail away on 01.22.20 at 12:45 pm
#120 Tater on 01.22.20 at 11:48 am
#110 Sail Away on 01.22.20 at 9:50 am

———————————-

I’d be happy to pass along some other investing tips as well, because helping others is the greatest gift.

———————————-

…since you’re offering tips, before I can evaluate them, can you tell me your CAGR, Sharpe and Sortino for the last 5 year? Money weighted, please.

———————————-

Moses’s stone tablet rules didn’t include interpretation or user instructions.

Let’s stick with that model.

———————————-

The hubris to compare oneself to Moses when unable to answer very simple questions really is something. Good luck with your investment.

#130 Heregoesnothing on 01.22.20 at 1:30 pm

Please don’t lose heart, Garth. I just found your blog 6 months ago, and wish I’d found it much sooner. Been tellin’ all my fellow millennial friends about it too!

#131 TurnerNation on 01.22.20 at 1:32 pm

Because this weblog mentioned it: flu shots.
When a product is free to you, then YOU are the the product.
Let’s look at it. Drug stores, Drug companies giving you free injections that you may not get sick, that you will not be returning to their premises and buying costly medications. They want to keep you healthy and away from their businesses thereafter.
By this logic Mr. Transmission should be giving free yearly transmission services such that yours will not clunk, slip or overheat, that you will have no need for their paid services.

Depends who you trust. Drug companies are the new Gods, any critcism or questioning is heretical. Can we agree there are good and bad products anywhere, I mean none of us would not use antibiotics (these have almost 100 years of track record); that one should pick and choose according to their needs. ‘Her Body Her Choice’ is what I’ve heard… so be it for me.

#132 Bytor the Snow Dog on 01.22.20 at 1:40 pm

@ Ustabe-

Just math. You said you’re in your 70’s but I don’t know if that is upper, mid, or lower. So, assuming your wife was the same age as you, I took 70 as the baseline, minus 27 = 43. That is not exactly prime child bearing age for women.

And dammit I was gonna say 10 years too! Went with 20 for the Hyperbole Effect.

#133 Westcdn on 01.22.20 at 2:01 pm

If you can read this post it is by the grace of Garth as he tries to save us from ourselves…

I mentioned before that I would try my hand with options. At this time, I try to keep my bets around the $500 mark. I never treat time as an enemy – it seldom goes well for me if I try that path.

It has been interesting to say the least. I found that some people will sell options well into the future – like 2 years. I haven’t found out what happens when a company is bought out or goes bankrupt before the expiry date. Not good is my feeling so I will have to research.

I noticed that most options are sold on underlying banks and other major blue chip companies. The sellers don’t leave much on the table and I think they are mainly hedge bets – chances of me making money with those options are a forgetataboutit. So that takes me down to 2nd tier or less.

So far, I am batting above my 2 out of 3 with both calls and puts. I haven’t stuck out on a put yet. It is not big money because my bets are small but I can always use a few $1000 taxable as capital gains. I like options for the leverage, sometime a hundred or more to one. Anyway, options put me into positions for nickels on the dollar and allow me to diversify further.

I use this website for quick reference: https://www.m-x.ca/nego_liste_en.php You can even take out options on those beta double or more on those derivative ETFs – in my mind a better bet than going long. I find you get dollar for dollar to going long on a stock verses an option but you do give up the dividend. My big win this year was buying a Put in the money put for Spinmaster – luck beats skill but, hey, you do what you can to get it your side.

I have always liked the adage that God favours the bold. I just wish hubris got punished in the same vein. But then that would make me nitpicker.

My daughters are doing well. They are the ones to offer me money. They don’t understand that I live a modest lifestyle by choice and it leaves me free to do what I want without responsibility. I don’t have the desire to interfere but I have decided to get my RIF to zero by age 75 and pester my girls and let the grandchildren know who I am.

#134 scott on 01.22.20 at 2:05 pm

Hey Garth,
Just wanted to say your blog has been immensely helpful. For me it was almost confirmation bias because I held a lot of the same opinions and had the same mind set towards investing and housing.

It’s been incredibly helpful for me to send the link to your blog to friends and family. A much more respectable source rather than them thinking I’m a crazy outlier in society not gutting my investments and future income to get in housing at any cost.

I can say with about 99% confidence that none of them would have commented. Good advice is good advice whether people listen or not. Just know that it’s not falling on deaf ears.

Also our national savings rate is not a great indicator because many in the generation where most wealth is held no longer need to be saving. My parents for example need to spend more after being frugal and setting themselves up for retirement over the last 45 years. Like you say can’t take it with you :)

I appreciate the wise words. Laughs and dog pics are a bonus!

#135 Sold Out on 01.22.20 at 2:28 pm

#129 TurnerNation on 01.22.20 at 1:32 pm
Because this weblog mentioned it: flu shots.
When a product is free to you, then YOU are the the product.
Let’s look at it. Drug stores, Drug companies giving you free injections that you may not get sick, that you will not be returning to their premises and buying costly medications. They want to keep you healthy and away from their businesses thereafter.
By this logic Mr. Transmission should be giving free yearly transmission services such that yours will not clunk, slip or overheat, that you will have no need for their paid services.

Depends who you trust. Drug companies are the new Gods, any critcism or questioning is heretical. Can we agree there are good and bad products anywhere, I mean none of us would not use antibiotics (these have almost 100 years of track record); that one should pick and choose according to their needs. ‘Her Body Her Choice’ is what I’ve heard… so be it for me.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

I hesitate to respond to uninformed nonsense like this, but here goes…

Drug companies don’t give away free vaccines in an effort to render the populace infertile, or to induce a strange desire to live in overcrowded cities.

Health authorities buy vaccines from drug companies to provide people with free/inexpensive protection from circulating viruses. Vaccines keep people out of hospitals, at work or school, and generally engaged in productive pursuits that don’t include : dying, causing other people to die, costing taxpayers more money because the flu turned into pneumonia and now you need a ventilator bed, and making the rest of your co-workers sick.

It’s antibiotics that we should be avoiding.

#136 Sail away on 01.22.20 at 2:30 pm

#127 Tater on 01.22.20 at 1:12 pm
124 Sail away on 01.22.20 at 12:45 pm

Moses’s stone tablet rules didn’t include interpretation or user instructions.
Let’s stick with that model.
———————————-
The hubris to compare oneself to Moses when unable to answer very simple questions really is something. Good luck with your investment.

————————

Moses? I don’t think Moses was the official author…

#137 Midnights on 01.22.20 at 2:42 pm

People sitting in cash…
https://finance.yahoo.com/news/black-rocks-kapito-people-in-cash-wont-be-able-to-retire-in-dignity-171901662.html

#138 Franco on 01.22.20 at 3:17 pm

I keep seeing these reports of a lot of people drowning in debt, but I do not know of any. I think most people are just doing fine, except for maybe 30% of the population.

#139 Shawn Allen on 01.22.20 at 3:30 pm

The National Savings Rate

Scott at 132 said:

Also our national savings rate is not a great indicator because many in the generation where most wealth is held no longer need to be saving.

**********************************
Excellent point. Averages like that are usually mis-interpreted. As you allude simple demographics may explain most of the lower average savings rate.

Average may not in any way be typical, not if there is a wide distribution – and there is. Many people are net borrowers, a bunch are net savers and many retirees are naturally drawing down savings. What sense can be made of the average? Not much.

There is really not much that is “we” or “our” about the national average savings rate.

#140 PetertheSeparatistfromCalgary on 01.22.20 at 3:34 pm

Canada is twice as big as the Roman Empire was at its peak. The Roman Empire managed to last so long by using brutality and over whelming military force. They sure as hell would not let a bunch of hippies block a road or aqueduct. Irresponsible fiscal policy is just another symptom of a nation that is already divided along cultural, political, religious and generational chasms.

Canada is not sustainable in its current form. Only Russia is geographically bigger. Either we adopt the Roman / Russian method of brutality or we form manageable smaller separate nations. History shows us that only geographically smaller countries are sustainable in the long run.

#141 TurnerNation on 01.22.20 at 3:40 pm

#133 Sold Out I can’t until Drug Stores and Drug companies being handing out free cancer prevention medications. I can’t wait. Just think of the benefit to economies. I totally get you.

#142 Good for the goose, good for the gander on 01.23.20 at 8:37 am

Strongly disagree – “this blog has failed”.

This blog has helped me be more successful in being financially literate and I would vote for Garth any day.

Overall, I think some just prefer the home lifestyle (this is how we are socialized in North America) and others prefer the financial market / flexible lifestyle. My hope at the end is that it’s a wash and the ultimate gains and outcomes are about the same and everyone in both tracks can retire with financial dignity. Personally for me, I wouldn’t be able to handle the stress of having a ton of debt but I’m just thinking about the worst as I’m sure many have amassed wealth from financial markets and real estate capital gains in the last decade.