Dr. Garth

Spring is here. The geese are multiplying. Financial markets are up. Again. The real estate humping is over. And the Doctor is IN. First patient, please.

Yo, Terry. Wassup?

I have a question, and feel free to use this example if it helps in educating/entertaining the masses. I have a $320k outstanding balance on a mortgage due July 1. I’ve recently sold equities ($160k) in my non-registered account at breakeven or small loss to raise cash to pay the mortgage off. Furthermore, I have sold about $85k of equities in my TFSA, at tax-free gains. Together this gives me $245k in cash.

My question is, I have $245k cash on hand, do I sell more equites now at a much larger loss (30%) from my non registered account to cover the full amount of the outstanding balance on my mortgage ($320k), or use the cash I have on hand to pay 245K of the outstanding balance and take out a new mortgage for $75k for one year, knowing as things improve in the market in a years time I can pay the remaining balance? First world problems I know, but interested in your take.

So I had the nurse call Terry and ask what offer his lender made regarding renewing the mortgage. “3.69% on a 1 year fixed @ RBC,” he said.

We have no idea why he asked about a one-year term only, since rates are rising, not falling. If he wanted to gamble short, a VRM would be better (the Royal is offering at 2.8%). But the best choice might be a five at between 4.2 and 4.6% – since it appears the Bank of Canada is about to heap another 1.5% (at least) atop its benchmark rate (starting on Wednesday).

The key question is this: inflation is, like, 7%. You can still borrow money at around 4%. And rates are rising. So how is getting your debt financed at a cost lower than the debt is being reduced by inflation, a bad thing?

Second question: why would you sell equities when the equity market is correcting and you should be buying, not liquidating? Why take paper losses and make them real? Why own stocks that have dropped 30% when the entire market has corrected by less than half that amount? So, why have a bunch of individual stocks in a portfolio too small to achieve diversification, when you’re too timid to renew a mortgage at a slightly higher rate?

The right move is to stay invested, put the cash back to work, trade the lameass stocks for solid market-reflecting ETFs and get a mortgage renewal on the house – where there’s probably already too much non-performing equity. Real estate will be limp for a while. Financial assets look far more promising. Make the rational, not the emotional, choice.

Let’s flip to BC now, where Simon was intrigued by Melissa’s question a few days ago about investing and deducting loan interest.

Thank you for the advice over the years. On April 18 last year, you published my story on the RESP held by CST. I meant to update you on that story. There was a lot of incompetence and foot-dragging on both sides (CST and my maroon bank) but on October 20 the funds were finally transferred. CST took a $1290 cut, which is awful and was worth about 5% of my investments pre-transfer, but better than the nearly $2400 I was led to believe they were going to keep. I’ve made about 5% return (including dividend reinvestments) in the 7 months since the funds were transferred in my self-directed account; was actually 9% just a month ago but as you know, the markets have dropped a lot in the last four weeks. Either way, in half a year in a B&D portfolio, I have recovered what CST kept for themselves. Not bad.

The reason I’m writing today is regarding your story on May 24 about Melissa and the line of credit. It was my understanding that you could not deduct interest from a personal line of credit, only from HELOCs. I am a renter and so I only have access to a personal LOC. My current rate is CIBC prime at 3.2% + 3% = 6.2%. I understand it would only apply to my non-reg account. I found this on the CRA website, which seems to confirm what you said.

Source: Canada Revenue Agency. Click to enlarge.

Good to hear you escaped the clutches of the baby vultures, Terry. Self-directed RESPs are the only way to go, as pre-packaged plans flogged to newbie parents who are drenched in hormones and short on logic are almost always a disappointment. Fees are awful. Liquidity is close to non-existent. The investment strategies are substandard, as are the returns.

As for borrowing to invest, it can make great sense. But only if you are unconcerned with bouts of volatility, only if you have a long-term investment focus and only if you buy reasonable stuff in a balanced and diversified fashion. Never borrow to buy crap like crypto, make a downpayment on a NFT or do anything anyone on Reddit suggested.

Interest on investment funds borrowed to generate taxable income or capital growth is deductible. That money could flow from a personal line of credit, a home equity loan, a borrowing from your spouse or even a conventional mortgage (only partial deductibility there). In order to qualify, interest must actually be paid (even if it’s a spousal loan), and the rate must be reasonable. Technically interest is deductible only on assets that pay you to own them, but the CRA allows the write-off to happen with ETFs or mutual funds, since they yield annual distributions or dividends as well as capital gains when sold. By the way, borrowing for a TFSA, RRSP or other registered fund does not yield deductible interest, since income generated within is tax-free.

And did you notice the CRA verbiage (above) about how to write off investment advisor fees?

Love that part.

About the picture: “Yes the obligatory obsequious and sycophantic sucking up!” writes Kevin. “I have followed and appreciated you forever. I sent you a pic of my little dog but not a story so here is the story. She is a year old little girl Shih Tzu. Our previous dog Lucy we called Monkey half the time. So we knew the name of our dog before we got her ! Keep up the good work!”

67 comments ↓

#1 fob on 05.27.22 at 4:57 pm

So is it a bad idea to borrow to invest in a registered account or is that still ok?

#2 TurnerNation on 05.27.22 at 5:00 pm

Bunnypatch is where Camo gear is accepted formal wear.
Roadside Trucknutz vendor stands are part of the landscape’s lie.

—-
Pet owners. What have been I posted about previously.
It is a brutal anti-human system and if you have been supporting it well…stand back.
That Mink cull was a test of what the public will bear??

https://www.dailymail.co.uk/news/article-10859295/Pets-like-hamsters-guinea-pigs-CULLED-stop-monkeypox-spread-new-guidance.html
“Pets like hamsters and guinea pigs could be CULLED to stop monkeypox spread under new guidance – as UK cases of the rare virus hit 90
Rodent pets could be culled to contain monkeypox under new ECDC guidance
The UK government is thought to be close to drawing up similar guidelines”


— As posted earlier:

#28 TurnerNation on 03.31.22 at 4:57 pm
Will house pets be declared ‘unsustainable’ in the New System? The Mink cull came first.
.Chinese city orders all indoor pets belonging to COVID-19 patients in one neighborhood to be destroyed (businessinsider.com)

#3 Faron on 05.27.22 at 5:04 pm

#155 VladTor on 05.27.22 at 4:10 pm

You’re just repeating zombie tales from the mass media like CNN

No, I’m not. Among others, I’ve read and listened to good work by Fiona Hill. Here’s her brief bio:

…Fiona Hill, one of America’s most clear-eyed Russia experts, someone who has studied Putin for decades, worked in both Republican and Democratic administrations and has a reputation for truth-telling

We are back to the analogy I made a while ago how one who swims in the ocean doesn’t necessarily know a whole heck of a lot about the ocean.

Anyhow, tell me where I’m wrong rather than just saying I am wrong.

#4 Steven on 05.27.22 at 5:04 pm

Anyone love the last 2 days when the US economy showing it’s on fumes, the Fed says it’s going “pause” on rates after a few (less than 3 100% – likely 1) more hikes and the markets act like it’s 1999?

Free markets…the ONLY thing you have to do to make money is watch what the Fed actually DOES, not what they say.

A FREE market? LMFAO! x infinity…

Inflation to the moon due to oil prices!

No word yet Mr. Turner on my proposal for the number of hikes still incoming…..*crickets*

#5 Felix on 05.27.22 at 5:04 pm

Happy Feline Friday!

Did you know:

If cats are fighting, the cat that’s hissing is the more vulnerable one. (not unlike Sail Away or Faron)

Cats dream, like people do.

You will find over 500 million domestic cats on the planet

Older cats can occasionally behave aggressively towards wolves (we’re afraid of nobody)

#6 UCC on 05.27.22 at 5:07 pm

But only if you are unconcerned with bouts of volatility, only if you have a long-term investment focus and only if you buy reasonable stuff in a balanced and diversified fashion. -Garth,,

Volatility I get, but when you say long-term are you talking 10-15 years or something longer?

#7 crowdedelevatorfartz on 05.27.22 at 5:12 pm

The Port of Vancouver ranks 368 out of 370 Ports in the world.
Too expensive.
Too long to load or unload.
Etc etc etc .

https://financialpost.com/news/economy/port-of-vancouver-is-among-the-worst-in-the-world-according-to-world-bank-report

#8 PeterfromCalgary on 05.27.22 at 5:22 pm

The market surprises you. Despite Nvidia tanking the overall S&P500 had it’s best week since November 2020.

Do you think the bad news at Nvidia might be because some of its products are used to mine crypto?

#9 the Jaguar on 05.27.22 at 5:23 pm

@#155 VladTor on 05.27.22 at 4:10 pm+++

Psssst. Vlad Baby. Link below is just for you. I think you might like it.

I’m not supposed to be posting, but I couldn’t resist slipping this link in. Just for you.

Only you. Everybody else, (especially the meanies) just keep scrolling. These aren’t the droids you’re looking for.

https://www.youtube.com/watch?v=ygAqYC8JOQI

#10 PeterfromCalgary on 05.27.22 at 5:27 pm

I should check the carts before commenting. Nvidia is up 5% today. My bad!

#11 PeterfromCalgary on 05.27.22 at 5:29 pm

Think about digital spell checkers is they don’t check for using the wrong words. I meant check charts not carts. I will just go lay down now.

#12 Mean Gene on 05.27.22 at 5:37 pm

Terry’s cost benefit algorithm needs adjusting, too bad he liquidated and flushed a bunch of money down the toilet due to mortgage renewal anxiety.

#13 Faron on 05.27.22 at 5:44 pm

#156 The Regulator on 05.27.22 at 5:03 pm

Faron : Refer to # 155, need I say more? You also imply that because I use YANDEX

Ba haa haaa haa. That was a shot in the dark. A hail mary. I had no idea you use YANDEX. I was more concerned that you may be an IRA wannabe. OMG. Don’t encourage my specious inference forming lest Sail Away get all excited. It’s addictive when it works though.

Anyhow, yes you can use whichever service you like. But, I recall (assuming you are the same YANDEX user we saw earlier) you now saying that you fear google censoring you which is pretty danged rich. If you aren’t using end-to-end encryption then it doesn’t matter who your e-mail provider is — you will be snooped if you are at all interesting.

Anyhow, pleasure chewing the fat with you.

#14 Brett in Calgary on 05.27.22 at 5:47 pm

Sure, alter you weightings, but stay invested.

#15 ElGatoNeroYVR on 05.27.22 at 5:59 pm

#12 Mean Gene on 05.27.22 at 5:37 pm
Terry’s cost benefit algorithm needs adjusting, too bad he liquidated and flushed a bunch of money down the toilet due to mortgage renewal anxiety.
===========
True that. Feeling generous today so let’s look at the positive. He can now buy a B&D portfolio made up off ETF’s and get a nice fat capital loss to offset the future gains.

#16 The Regulator on 05.27.22 at 6:18 pm

Lucky # 13 – Faron : I’m not Irish, and Google/ Alphabet buries anything which deviates from their narrative. You seem pleased that I use YANDEX? The better to keep up with the latest evil doings of dear old Czar Putters. He could defeat Spock at 3-D chess hands down. Can you relate to my Star Trek reference there? Na noo nanoo.

#17 Faron on 05.27.22 at 6:27 pm

#103 Sail Away on 05.24.22 at 10:33 am

Who called the bottom last week? News flash: it wasn’t.

SPX up 7.1%, NDQ up 9.2% from the moment of that comment — a good year’s gains. 🤣

#18 Sam on 05.27.22 at 6:27 pm

Looks like inflation has peaked as I had called it. Rates will stop going up by September which is just 3-4 months away. May get to 2% or 2.5% and thasit. Rates likely to go down in 2023.

#19 VladTor on 05.27.22 at 6:28 pm

#3 Faron on 05.27.22 at 5:04 pm

Cool, so when Russia saunters into Belarus, they should cede too (kinda already have)? And then Latvia ’cause small? Estonia ’cause same?

Anyhow, tell me where I’m wrong rather than just saying I am wrong.

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

OK!

Briefly:

1. Russia is not going to invade or take over Belarus. This is a state allied with Russia, united by a common economic zone and a security zone. Belarus fully supports Russia in the international arena and has a strong economy and military. Relations between Belarus and Russia are almost like those of Canada and the United States.

2. Stalin made a big mistake by joining Lithuania, Latvia and Estonia to the USSR. When these countries became part of the USSR, they had a powerful and developed economy compared to the period before World War II. Now, after only 30 years of independence, these are impoverished countries with a constant outflow of population. Their economy exists only due to the financial injections of the European Union. These countries have become completely hostile to Russia in 30 years. They have nothing – no resources, no economy.

Russia will never repeat Stalin’s mistake again.
Why are they needed – to feed the poor countries? Re-create again an industry? For what?

Enough?

#20 CJohnC on 05.27.22 at 6:30 pm

#1 fob. With a question like that it is clear your reading comprehension needs work.

As does your spelling…Knob…… not fob.

#21 NOSTRADAMUS on 05.27.22 at 6:35 pm

I SEE DEAD PEOPLE!
Bankruptcies have so far been limited by hundreds of billions of dollars in various forms of monetary support measures to keep both households and companies alive. This stimulus has artificially depressed the failure numbers. The specter of “Ghost Bankruptcies” is hanging over Canada with thousands under serious threat as liquidity is being withdrawn. In addition interest rates are lifting off from ground zero. When the overindebted slip under the debt waves the ripple effect will leave the economy with scars all the make-up in the world will not hide. Reported bankruptcies may remain “Ghosts” for now, but I’m starting to hear rattling chains coming down the corridor. Before too long the speculators and their first cousins the overindebted will turn their rosy red cheeks and teary eyes to the government, pleading “Help us, save us, touch us, heal us, make us whole again, Pleeease. Steady Lads, hold the line.

#22 VladTor on 05.27.22 at 6:36 pm

#9 the Jaguar on 05.27.22 at 5:23 pm

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

Thank you! I know about Oliver Stone interview with Putin. He spent with him 3 days in past !!!!

For this new interview thank you very much! I will watch it later this week.

I’ve read only short extraction and nice to see full.

Oliver Stone one of the realistic guy in USA. I respect him!

#23 Two-thirds on 05.27.22 at 6:39 pm

Regarding Terry’s mortgage case:

“We have no idea why he asked about a one-year term only, since rates are rising, not falling. If he wanted to gamble short, a VRM would be better (the Royal is offering at 2.8%). But the best choice might be a five at between 4.2 and 4.6% – since it appears the Bank of Canada is about to heap another 1.5% (at least) atop its benchmark rate (starting on Wednesday).”

It is puzzling why a fixed rate would be better than variable, from what Garth wrote: If currently a VRM is 2.8% and accounting for 1.5 points rate rise (over many months), the resulting rate is 4.3%, on the lower end of the (current) fixed rate range.

Inflation in the US was reported today to have decreased month-to-month, and the Fed is beginning to signal a PAUSE around September, to re-assess their rate adjustment rhythm.

It seems that expecting rates to continue rising beyond 200-250 basis points at the start of the year is a strong case of “Recency Bias.” Besides, once inflation stabilizes and the supply chain bottlenecks ease up, how likely would it be that rates go up beyond 4-5%?

A key fact that is ignored here is the role of tapering… The Fed is tackling inflation by raising rates AND by letting bonds mature and avoiding further purchases. To focus entirely on rates is short sighted and could lead to people renewing mortgages securing “peace of mind” for 5 years at a significant premium over VRM…

In summary, supply chain problems easing up, rates rising to neutral, and bond tapering are quite likely to bring central bank rates to a new stable level in 2023 and beyond, higher than the absurd pandemic levels, but likely not as high as a 5 year fixed rate taken in a panic in 2022.

Perhaps taking the 1 or 2 year mortgage with a fixed rate is a fair compromise between going all in for 5 years fixed and going variable for 5 years to.

Interesting idea, Terry!

#24 Reality Check on 05.27.22 at 6:40 pm

I get a laugh when I read the nonsense fro Putin apologists about historic borders. That somehow modern day borders set by wars, politics and negotiation are not the actual borders. Of course they argue this especially applied to the Ukraine which in their distorted logic was a constructed country and never really existed. Seems like it has existed pretty we’ll since it was freed from the evil empire 30 years ago.

Hmmmm…..let’s see what other modern day borders we don’t like.

Perhaps we should give Quebec back to France, maybe all of Canada to the First Nations (but which First Nation?), perhaps the US should hand Texas back to Mexico and California to Spain. Maybe we should set Russia’s borders back to its much small footprint of 300 or 400 years ago. And let’s not even get started on eastern Germany/Berlin and Israel.

Nope, sorry Putin lovers, modern European borders are the borders. And because some nutcase genocidist has ambitions to resurrect to “gloryous” Soviet empire does not change that.

#25 Brian on 05.27.22 at 6:45 pm

According to Savills Research the world housing market is almost 40% of total assests which is larger than the equity and debt markets combined!

Great interview with Alfonso Peccatiello former 20 billion bond fund portfolio manager. Good primer on the bond market.

Bond Expert Predicts Even Lower Asset Prices Ahead | Alfonso Peccatiello, aka MacroAlf

You’ll love what he has to say about Jerome Powell and what the fed is trying to acheive. OUCH!

https://www.youtube.com/watch?v=U4bnUiph1ac

#26 The Regulator on 05.27.22 at 6:50 pm

All Canadians should be aware that inflation was an issue before Russia/Ukraine was an issue. This simply made things worse, and deep fried grasshoppers are coming to your local kfc, with a side of mealworm fries.

#27 Hurtin' Albertan on 05.27.22 at 6:54 pm

UK imposes 25% energy windfall tax to help households as bills surge:

https://financialpost.com/pmn/business-pmn/uk-imposes-25-energy-windfall-tax-to-help-households-as-bills-surge

Coming soon to Canada? I could see the Liberals (supported by the Bloc and NDP) imposing something similar on the windfall profits of banks and fossil fuel companies here.

#28 Mark on 05.27.22 at 7:04 pm

no offense to your viewers Garth but why do people keep asking the same dumb questions?

#29 Brian on 05.27.22 at 7:17 pm

Danielle DiMartino Booth: When Will Powell Pivot

Danielle worked at the fed for 9 years.

She is aligned in what Garth has said about the WFH crowd.

https://www.youtube.com/watch?v=uaD1D53Vcew

#30 Ed on 05.27.22 at 7:46 pm

Being debt free is much more important than squeezing out a 3% difference by continuing paying a mortgage.

Better for your health and sets you free.

Actually pumping even more equity into real estate might enslave you within one asset. Be balanced, not emotional. – Garth

#31 Dr V on 05.27.22 at 8:25 pm

Actually pumping even more equity into real estate might enslave you within one asset. Be balanced, not emotional. – Garth.
————————————–

Hmmm.

I hope he hasnt removed the cash from the TFSAs. If not, I would say to buy a new garth-approved portfolio in the TFSA.

The $160k he has sold in non-reg will not incur tax, so maybe use it to pay down 1/2 the mortgage balance. It’s a hedge, as we know neither what the market returns will be, nor just how the interest rate will turn out.

Then with what’s left in the non-reg, he can also apply a GT approved portfolio. Again, no tax consequences.

#32 TalkingPie on 05.27.22 at 8:26 pm

Spouse and I are signing for our mortgage renewal next week. 4 year fixed at 2.89%. Ironically, that’s slightly lower than what we got in 2018, when rates were also “going up” and then subsequently flopped. Needless to say, with the benefit of hindsight we now know that a variable would’ve been the better deal back then. Will history repeat itself? I don’t know, but we can’t go too far wrong at under 3%.

#33 Yukon Elvis on 05.27.22 at 8:39 pm

#9 the Jaguar on 05.27.22 at 5:23 pm
@#155 VladTor on 05.27.22 at 4:10 pm+++

Psssst. Vlad Baby. Link below is just for you. I think you might like it.

I’m not supposed to be posting, but I couldn’t resist slipping this link in. Just for you.

Only you. Everybody else, (especially the meanies) just keep scrolling. These aren’t the droids you’re looking for.

https://www.youtube.com/watch?v=ygAqYC8JOQI
++++++++++
Here is a bit of balance for you. Lex Fridman podcast with Stephen Kotkin a few days later.

https://youtu.be/2a7CDKqWcZ0

#34 Don Guillermo on 05.27.22 at 8:45 pm

26 The Regulator on 05.27.22 at 6:50 pm
All Canadians should be aware that inflation was an issue before Russia/Ukraine was an issue. This simply made things worse, and deep fried grasshoppers are coming to your local kfc, with a side of mealworm fries.
+++++++++++++
I had some at my favorite mescal bar “Metl Mezcaleria” in Mazatlàn. Wasn’t too happy when I found out the fries were worms but had already eaten most of them. The plating presentation was exceptional.

#35 Dr V on 05.27.22 at 8:54 pm

Further to above, I should not say there are no tax implications. Something to consider:

https://turbotax.intuit.ca/tips/carrying-capital-losses-backward-or-forward-6249#:~:text=If%20you%20have%20a%20capital,them%20to%20different%20years'%20returns.

#36 Satori on 05.27.22 at 9:06 pm

Where’s Linda?

#37 Satori on 05.27.22 at 9:09 pm

#30 Ed on 05.27.22 at 7:46 pm
Being debt free is much more important than squeezing out a 3% difference by continuing paying a mortgage.

Better for your health and sets you free.

Actually pumping even more equity into real estate might enslave you within one asset. Be balanced, not emotional. – Garth
—————————————————
100% agreed. 4%-3%… a small profit is still a profit.

#38 Quintilian on 05.27.22 at 9:12 pm

#28 Mark on 05.27.22 at 7:04 pm
“no offense to your viewers Garth but why do people keep asking the same dumb questions?”

Glad you pointed that out Mark.

I feel the same way, however, I have had the Mr. Congeniality of the blog title many months running and did not want to risk losing the prestigious designation.

#39 Brutal on 05.27.22 at 9:30 pm

“So how is getting your debt financed at a cost lower than the debt is being reduced by inflation, a bad thing?”

Wow. That is a train wreck of a sentence, Garth. You’re a great writer but I read that sentence four times and I still have no idea what you’re trying to say.

#40 The Regulator on 05.27.22 at 9:32 pm

# 24 – Reality Cheque : Europe’s borders have been changing since forever. Examples of this include the Austro-Hungarian Empire, The Polish Empire, Yugoslavia, Serbia…give up yet? In fact, parts of Ukraine used to belong to Poland and Hungary. Might I say, you’ve been mis-informed. C.N.N. much?

#41 I don't know on 05.27.22 at 9:45 pm

#24 Reality Check on 05.27.22 at 6:40 pm

Indeed.

The good news is it’s easy identifying them and recognizing the blatant lies/propaganda.

Here’s a good example.

#19 VladTor on 05.27.22 at 6:28 pm

Here this poster is “arguing” that states surrounding Russia have nothing to fear because Belarus -with it’s “strong military and economy”- has nothing to fear precisely because it supports Russia and is okay being a satelite state.

The implication, of course, is that Ukraine has the gall to not want to be a satellite state and therefore deserves to be invaded.

Unbelievable.

The indiscriminate shelling of homes, abhorrant violence against civilians, destruction of Ukraine’s industry would all just stop if they acquiesced, and accepted they aren’t in control of their future and country.

It’s incredible how, in 2022, it needs to be explained how this is wrong.

As stated earlier, Kissinger needs a history lesson and should be ashamed of himself.

IDK

#42 I don't know on 05.27.22 at 9:52 pm

Tonight’s explanation from our host is spot on. Rates are rising, but they are still well below inflation and will continue to be. Lock in, enjoy fixed payments in inflating dollars, and enjoy life.

“The right move is to stay invested, put the cash back to work, trade the lameass stocks for solid market-reflecting ETFs and get a mortgage renewal on the house – where there’s probably already too much non-performing equity. Real estate will be limp for a while. Financial assets look far more promising. Make the rational, not the emotional, choice.”

-Absolutely. Everyone who thought the current correction was 2008? Sorry about that. Maybe next time spend less time on facebook and social media. Garden variety correction. Is the bottom in? Maybe but maybe not. We could retrace lower again but it won’t last. Cash? Now is a good time to put it to work.

IDK

#43 Faron on 05.27.22 at 10:11 pm

@VladTor

thanks! that’s helpful. i disagree somewhat though. if Putin wanted to absorb territories with functional economies, why is he destroying Ukrainian infrastructure with abandon?

#44 Flop… on 05.27.22 at 10:44 pm

Real Estate line is getting a bit Blurry in the States.

Correction, things are getting a bit Burry…

M47BC

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

“Is the housing boom about to bust? Sellers are slashing prices at levels not seen since before the pandemic amid rapidly cooling market as hedge fund manager of The Big Short fame warns ‘It’s like watching a plane crash’.

* More than 20% of homes for sale in Philadelphia, Boise, New Orleans and Sacramento had their prices reduced in April.

* Michael Burry, of ‘The Big Short’ fame, compared the slowing housing market to 2008 saying it’s like ‘watching a plane crash’

* This week mortgage rates reached a 13-year high of more than 5%

* One economist said that house prices could drop as much as 40% during the summer of 2022”

https://www.dailymail.co.uk/news/article-10862005/Sellers-slashing-prices-levels-not-seen-pandemic-market-rapidly-cools.html

#45 VladTor on 05.27.22 at 10:59 pm

#41 I don’t know on 05.27.22 at 9:45 pm

#43 Faron on 05.27.22 at 10:11 pm

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

Gentlemens ( and Ladies of course!), I do not want to discuss Ukraine here. You don’t know anything about the source of the conflict – and you don’t need to. Everything I read here on the blog about events in Ukraine, the Russian and Ukrainian armies is a complete lie!

This blog is not for political discussions. It’s about Canadian finance and housing. This is what I expect to see here. Let’s stop there. Move political discussions and your opinions about international events elsewhere.

Once again, politics interests me only as entertainment, but because I can read Russian media and English media, I can compare. I can have my own opinion about events, whether someone likes it or not. I don’t force anyone to agree with me.

I am against the killing of people of any race and nationality – everyone has families and children. Unfortunately, irresponsible politicians in many countries, instead of solving problems through political dialogue, arrange wars. SAD!!!!

#46 Ponzius Pilatus on 05.27.22 at 11:00 pm

#41
The indiscriminate shelling of homes, abhorrant violence against civilians, destruction of Ukraine’s industry would all just stop if they acquiesced, and accepted they aren’t in control of their future and country.

It’s incredible how, in 2022, it needs to be explained how this is wrong.
——————-
Knower of all that is unknown.
Buddy, please explain why everything should be different than it was 3,000 years ago.
Because we have the Internet, or we fly to the moon, and drive tanks to work that cost 300 bucks to fill up?
What makes us so special?

#47 The Regulator on 05.27.22 at 11:04 pm

# 41 – I don’t know : The indiscriminate shelling of homes, abhorrent violence against citizens, destruction of Ukraine industry….are you taliking about now? Or what’s been done in eastern Ukraine since 2014 to 4 months ago? 14,000 died at their brothers hand. Reality bites.

#48 Beth on 05.27.22 at 11:13 pm

#43 Faron on 05.27.22 at 10:11 pm
@VladTor

thanks! that’s helpful. i disagree somewhat though. if Putin wanted to absorb territories with functional economies, why is he destroying Ukrainian infrastructure with abandon?
—————
Read up on the war crimes and answer your own questions. Why? Honestly… why? You need to ask?

#49 Satori on 05.27.22 at 11:15 pm

#43 Faron on 05.27.22 at 10:11 pm
@VladTor

thanks! that’s helpful. i disagree somewhat though. if Putin wanted to absorb territories with functional economies, why is he destroying Ukrainian infrastructure with abandon?
———————–
The guy who bombs hospitals and play grounds and you wonder?

#50 T-Rev on 05.27.22 at 11:29 pm

What’s not being discussed is the psychological benefit to our man Terry for being debt free, or the fact that his mortgage returns are tax free with zero volatility.

Now, what he shoulda done is break his mortgage 9 months early back in September and lock in at 1.5%for five more years, stay invested, and then been prepped to pay it off at renewal in 2026. Any IRD would’ve been small on an early break with less than a year to go, and would’ve been quickly made up for by the low rates available then.

But, since he didn’t, and is now facing down something more like 4.5%, my advice would depend on his age, income, risk profile, and amount of non-registered money he’s got invested. Avoiding 4.5% interest is mathematically equivalent to making 4.5%. Since you pay no taxes on the 4.5% you avoid, depending on Big Terre’s income that could be the same as earning 7-8% non-registered. And it’s guaranteed, zero volatility. If I’m Terry, I’m re-investing the TFSA money in index ETFs, but I’d plunder the non registered stuff and pay down the mortgage. He will incur capital gains tax when he sells these assets, but he’s going to do so someday anyway, and the tax free 4.5%, which goes on in perpetuity by the way, and the feeling of owing nothing to no one, is worth it.

Not a popular opinion amongst the advisor set, but for those on Main Street, low debt and guaranteed returns have value beyond the numbers.

…exactly why most people box themselves into frugal lives. Not my choice. – Garth

#51 Satori on 05.27.22 at 11:54 pm

#39 Brutal on 05.27.22 at 9:30 pm
“So how is getting your debt financed at a cost lower than the debt is being reduced by inflation, a bad thing?”

Wow. That is a train wreck of a sentence, Garth. You’re a great writer but I read that sentence four times and I still have no idea what you’re trying to say
—————–
if you get a mortgage at 4% and your investments are pay 8%… it is better to keep your investments. making 4% is considered a profit. Might not be much but… at the end of the day, making money, isn’t that how we are all conditioned for?

Cash is becoming King again, when interest rates are super low, cash is trash… we are making a transition here. Pay attention. :)

#52 Faron on 05.28.22 at 12:01 am

#48 Beth on 05.27.22 at 11:13 pm
#49 Satori on 05.27.22 at 11:15 pm

👏 It 👏 was 👏 a 👏 rhetorical 👏 question!

#53 kommykim on 05.28.22 at 12:26 am

RE:”Thank you for the advice over the years. On April 18 last year, you published my story on the RESP held by CST”

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

Are they talking about THIS company?
https://www.cstsavings.ca/about-us

Their fees sound outrageous. Am I reading the Plan Summary correctly?
“Sales charges $200 per Unit
This can be between 3.1% and
24.1% of the cost of a Unit,
depending on the Contribution
option you select for your plan
and how old your Beneficiary is
at the time you open your plan”

Wholly crap!

#54 Crypto Panic on 05.28.22 at 1:50 am

When you get into these coins when they’re super cheap like they’re now and when you have a once-in-lifetime event like the Ethereum upgrade that will open the doors to 290 million investors — I’ll tell you this, all bets are off.

Imagine that you’ve got $20,000, $40,000, $60,000 a year coming in year, after year, after year. What does that do to your life? How does that change how you deal with inflation? How does that change your retirement plans? How does that change the conversations you have with your children about your vacations, about their education? How does it change the conversations and the interactions you’re having with your wife?

#55 PeterfromCalgary on 05.28.22 at 2:38 am

I’m reading a great book called the Rare Metals War by Guillaume Pitron. Basically the book tells how democracies over regulated rare metal production to dictatorships. Now we are kind of screwed because we are dependent on these freely polluting dictatorships for the stuff that powers tech and so called “clean” energy.

We have this nasty habit of not thing thing through!

#56 PeterfromCalgary on 05.28.22 at 2:39 am

Yeah I have somehow lost my ability to write coherently. I hope it is temporary.

#57 PeterfromCalgary on 05.28.22 at 2:43 am

I hope I don’t have this. Quote from Mayo Clinic.

“Overview

Aphasia is a condition that affects your ability to communicate. It can affect your speech, as well as the way you write and understand both spoken and written language.

Aphasia typically occurs suddenly after a stroke or a head injury. But it can also come on gradually from a slow-growing brain tumor or a disease that causes progressive, permanent damage (degenerative). The severity of aphasia depends on a number of conditions, including the cause and the extent of the brain damage.

Once the cause has been addressed, the main treatment for aphasia is speech and language therapy. The person with aphasia relearns and practices language skills and learns to use other ways to communicate. Family members often participate in the process, helping the person communicate.”

#58 under the radar on 05.28.22 at 5:06 am

Terry – No debt, no after tax mortgage payment , no stress . Easy. Boxed in by having no debt? or boxed in by having too much debt? . Most of the failures I have seen came from those with too much debt, rather than not enough income.

#59 TurnerNation on 05.28.22 at 7:44 am

65th? Slow day.

A Dollarama near me has become self-checkout. With one overseer person. In Kanada they pretend to pay us, we pretend to work.

More jobs are “non essential”.
2020 was a forced transition, a training period on being “Non essential”. Hint: they will be given the UBI.

“The Globe and Mail reports in its Saturday edition amid the hums and clangs of Savaria’s factory in Brampton, Ont., two wildly distinct eras of Corporate Canada can be found just a few steps apart. The Globe’s Jason Kirby writes that in one cramped corner of the 33-year-old company’s plant, which manufactures accessibility equipment such as wheelchair lifts, custom stairlifts and home elevators, a group of 10 workers weld and grind curved steel tubes by hand. Nearby, a single orange robotic arm Savaria installed earlier this year swings through the air doing the same task. The math, as vice-president of operations Sebastien Bourassa sees it, could not be simpler. In a day, those 10 workers typically produce two custom stairlifts. The robot, with two operators, currently churns out five — and that output is set to more than double over time” (stockwatch.com)



Your travel is “non essential”. Trapped in your fetid, crowded UN Smart City. What did you think those QR codes are for your benefit ? ? Come now tax slave. Smarten up.
Control over travel. Did nobody tell them about the permanent global digital ID?

.Liberals inexplicably clinging to travel mask and vaccine mandates (nationalpost.com)

.Ottawa wants to search your phone at the border, but its proposed rules are unreasonably suspicious (theglobeandmail.com/opinion)

#60 crowdedelevatorfartz on 05.28.22 at 8:47 am

@#46 Ponzie ponders peoples’ progress
“What makes us so special?”

+++

toilet paper

#61 crowdedelevatorfartz on 05.28.22 at 8:56 am

@#43 Faron.
“if Putin wanted to absorb territories with functional economies, why is he destroying Ukrainian infrastructure with abandon?”
+++
A tried and true Russian military strategy.
Pound the ‘enemy” cities to dust( 12 to 18 months just about does it).
Smash the infrastructure so the area will be useless to anyone retaking the territory without billions to spend rebuilding.
Force most of the people out.
Occupy the territory with Russian speaking locals who will take over the empty areas for free.
Set up a compliant corrupt thug to run things.
Leave a small Russian force to maintain rule.

#62 Tony on 05.28.22 at 9:29 am

Re: #8 PeterfromCalgary on 05.27.22 at 5:22 pm

I told everyone several times to buy Nvidia when it was 20 dollars 30 dollars and 35 dollars before any stock splits right here on the blog. I only recommended buying a few stocks through the years. That stock was as plain as day. I told everyone I put everything into Nvidia when Garth said don’t put everything into one stock. I said not if you have the right stock.

#63 Tony on 05.28.22 at 9:47 am

Re: #42 I don’t know on 05.27.22 at 9:52 pm

After the second quarter earnings come out in America that should be the bottom for the year if the bottom isn’t already put in. I’d expect inflation to fall leading into the midterms and the rate of increase for next years social security is based on the October figure for inflation.

#64 Phylis on 05.28.22 at 9:58 am

#52 Faron on 05.28.22 at 12:01 am
#48 Beth on 05.27.22 at 11:13 pm
#49 Satori on 05.27.22 at 11:15 pm

It was a rhetorical question!
Xxxxxxxx
I kinda thought you were letting him dig his hole deeper to see how low he could go.

#65 Tony on 05.28.22 at 10:23 am

Re: #17 Faron on 05.27.22 at 6:27 pm

On Wolfstreet I guessed the bottom for the year would be DOW 31,700. It fell lower than that. That was about a month ago.

#66 Dharma Bum on 05.28.22 at 10:37 am

…exactly why most people box themselves into frugal lives. Not my choice. – Garth
—————————————————————————————————–

Most people are afraid of their own shadows.

Ignorant.

Gutless.

Naive.

They live in fear and apprehension about everything, and tend to mindlessly follow the “news” (i.e. misinformation) in the MSM and Social Media.

A world of Chicken Littles.

Hence, the masses of indebted wannabes and debt-free paupers. Extremes to which the masses adhere.

That’s why, as Garth preaches, those in the know must keep low profiles and walk quietly among them.

#67 VladTor on 05.28.22 at 11:15 am

#49 Satori on 05.27.22 at 11:15 pm

———————–
The guy who bombs hospitals and play grounds and you wonder?

***************
This is a lie. The Russian army did not bomb a single hospital or playground. This is a propaganda war. That hospital in Mariupol that you are probably talking about has not been a hospital for a long time. The Nazi “Azov” battalion expelled all the patients and personnel from there and made their headquarters there, which was destroyed.

I will not do propaganda. This info about hospital is a lie. Dot!

But that’s not a lie. Ukrainian President Zelensky said that Ukraine will not comply with the Geneva agreements on prisoners of war and Russia, even through the Red Cross, cannot get access to its prisoners of war. Ukraine and journalists from all over the world have access to Ukrainian prisoners of war in Russia prison without problems. Have you read about it somewhere in the news here? Why doesn’t this upset anyone?

All! I don’t write about politics anymore. Not interested.

Everyone who read my previous post today obviously did not understand what I mean. Politics has no place here.

I will explain again with an example for those who do not understand.

Let’s assume that this blog is not about finance and housing, but a blog of butterfly collectors. And today, someone (copy of Garth – blog owner) posted a very interesting post about butterflies, just like Garth did about finance today.

A discussion of collections of butterflies began and suddenly !!!! someone started writing about Ukraine and Putin. Instead of butterflies!

What would be the reaction of the butterfly’s collectors community if they suddenly started reading about Putin and the war in Ukraine? I will not write all possible words in response – butterfly collectors are sensitive and emotional people.

Let’s get back to our blog. There is no formal difference – the idea of ​​the 2 blogs is the same – the subjects of discussion are different.
In one case – butterfly collectors discuss everything about butterflies, in the case of our blog – house and dollar collectors (investors) exchange information and they experience about houses and investments.

So why the hell am I reading here about politics and even someone manages to insert 5-6 video links?
When will this stop?

If you have nothing to say on the topic – better friends be silent!