Math is hard

Let’s clear a few things up. Starting with math.

“Can you give the millennials a lesson on how percentage works?” asks Chalkie. “I tried to do this to a proud owner of a recent purchase today, but gave up. He never did get it.”

It goes like this: a 40% decrease is not equal to a 40% increase. It’s way worse. This is why recent plops in housing costs – after insane Covid-related advances – are so detrimental to people who bought in the BeforeTimes and are now living through equity shrinkage.

For example, imagine if you bought a shack in Bunnypatch in late 2020 for $900,000 and lucked out massively, seeing a 40% appreciation during the pandemic, pushing the value to $1.3 million. Now the health crisis has ended, inflation has flamed, rates are swelling and all that Covid appreciation is melting away. Your property’s worth 40% less, says the local realtor cartel.

You’re back to where you started, right?

Nope. Math. A 40% decline translates to a new value of $780,000. So if that property was purchased with a hefty 15% down payment, there’s virtually no equity left. Pffft.

Next up: some blog dog calling himself ‘Woosh’ insists it’s cheap to buy and own than to rent. But it’s not.

Let’s take the average 700-square-foot one-bedder condo in Toronto. These days it sells for $720,000 and rents for $2,150. That price is up a little. The rent is up a lot (17%).

To buy without CMHC insurance requires a down of $145,000, plus closing costs. The mortgage of $580,000 comes with payments (at 5.24% on a three-year term) of $3,453. Condo fees (average) are $410 a month. Property tax is $200. The lost investment potential of the down payment (at 6% annually) is $725 monthly. So the actual ownership overhead (excluding utilities, insurance, parking) is $4,788. Yes, twice as much per month as renting an identical unit.

These days there’s zero assurance condo (or detached) prices will be higher in a few years, given CB tightening. The opposite could be true. So assuming values neither gain nor lose ground, in five years’ time the renter has coughed up $129,000 in leasing costs (not factoring in any increases) while the owner has expended $287,300 (not counting fee or tax hikes).

But wait. After five years the renter can walk away with $194,000 (the value of the down payment, invested) and no debt. The owner still owes the bank $543,200 (the higher the mortgage rate the less debt is paid off). If she sells for $700,000, less 5% commission, the proceeds are $665,000. After paying off the mortgage, $122,000 remains. Thus, it cost the owner $287,300 (monthly overhead for five years) to lose twenty grand (on the deposit). But once the imputed rent costs are deducted (if the owner been just a renter), that drops to an expenditure of $158,300. Add in the down payment loss, and not leasing the condo was an expensive folly. The excess cost of owning over renting comes to $180,000, or three grand a month.

Conclusion: in the absence of sustained, large annual increases in the capital value of real estate it makes no sense to buy any. Unless there are no rentals. Unless you have three kids and two dogs. Unless you want purple polka-dot walls. Unless you plan on staying there a long, long time. Unless you mess up math.

And here’s Janet. What a First World math problem she brings us.

Not sure if this will ever make your blog, which I read daily. I love your blog. I wonder what you would advise. My spouse is 65 and retired. I just retired at age 62. We collect Pensions and Canada Pensions of about $4500 per month. We have just over $900,000 saved in a balanced fund that has done great until the beginning of this year. Our mortgage is still at about $500,000 because we bought a development property years ago and we live on it. We own 38 acres of industrial land with a house on it. It is worth approximately $9 million. We’d like to fully retire and wonder if we should sell the industrial property or hold on for greater gains. Our property will likely be worth triple in 10 years. Is this blog worthy? Don’t know but here’s to hoping!

Let’s review. Retired. Sixties. Modest income. Nine hundred thou saved. Ninety per cent of net worth sitting in one piece of land worth $8.5 million in equity. And the question is: should we live frugally so we can maybe have $25 million in a decade when we’re in the last years of our life, or sell now and harvest an income of seven hundred thousand, to enjoy for the next twenty years or more while preserving eight million?

Seriously. Math is hard. So are heads.

About the picture: “I am a 39 y/o millennial who has scrimped and saved for a down-payment for a first home as fast as I could,” writes Adam. “My goal has always been to be able to put 20% down. There is no bank of mom and dad for me (I say that with much pride as I have done everything on my own: paid for university, fled the nest living independently at 18 etc.). Unfortunately, the housing market accelerated away from me far faster than I could save for a sensible DP. I aimed for a 20% DP and aimed to buy in line with my income and net worth (per your Rule of 90). My lifestyle is sensible. I carefully follow a written and zero-dollar budget. I save diligently. I have not yet found a companion to nest with so rutting season (and a dual income household) isn’t a thing for me.  I’m sending you a picture of Mango, my wonderful labradoodle.”

139 comments ↓

#1 Sam on 07.26.22 at 4:34 pm

You’re assuming their $194,000 in investment money grows but with markets down that $194,000 would be worth $155,000 less fees (albeit low if ETF).

Over five years, a B&D portfolio decline is unlikely. But they still win. – Garth

#2 JPN on 07.26.22 at 4:35 pm

3 things I’m not good at .. Math and Arithmetic

#3 Prince Polo on 07.26.22 at 4:44 pm

Simple math problems and so many doofuses. No wonder housing costs what it does. Ready for the house of cards to come crumbling down. Hard.

Signed,
A loser renter.

#4 crowdedelevatorfartz on 07.26.22 at 4:48 pm

My God.
65 and 62.

$4200 per month in pensions = $50k/year..
$900,000 invested.
Property worth $9,000,000

……and they’re thinking of waiting another 10 years to reap the benefits?

#5 Broader Mind on 07.26.22 at 4:54 pm

Math and engineered masterpiece. So five year bond yields still falling (2.8%) while inflation is running out of control and the bank rate is rising. I guess budgets really can balance themselves when you fully control all inputs and outputs. Cause and effect no longer regulate . Lies and deceit rule.

#6 JP on 07.26.22 at 4:56 pm

“So assuming values neither gain nor lose ground, in five years’ time the renter has coughed up $129,000 in leasing costs (not factoring in any increases)”

This is our situation exactly (actually $124,800) in the last 6yrs. I guess I’m not explaining this well enough to friends and family…and nobody wants to see my spreadsheet illustrating today’s math for our situation either!

#7 Blobby on 07.26.22 at 4:57 pm

Maths is so hard, that N Americans make it a singular to cope.

#8 Søren Angst on 07.26.22 at 4:58 pm

Well Garth, today you explained in clear terms why the Liberals are in Gov and Cdns accepted their budget (after hours of deliberate Arithmetic calculations on their own) and believe that money really does grow on trees.

Heck, it grows in vacant industrial parks (with a homestead). Why not trees?

Good one today. I enjoyed it a lot.

#9 Don Guillermo on 07.26.22 at 4:58 pm

#115 Outrage on 07.26.22 at 2:02 pm
My coworker left for Mexico during the Covid exodus and now lives down there for under $ 600 a month. He has a small pension so he makes due with what he can.
###########
$600CAD/month might be difficult where I live in Mexico. There are many gringos living with tight budgets (mostly single senior women). About $1000 CAD seems to be a minimum and that’s living frugal.

Janet Blaser lives a few bocks from me and is their guru. At the end of this article she does a video tour of her rental. I’ve never been inside but walk by it almost daily. It looks nicer than expected at $420 USD/month. Check it out.

https://www.cnbc.com/2022/07/02/these-americans-all-left-the-us-for-mexico-how-they-found-their-perfect-location-and-made-it-happen.html

#10 ogdoad on 07.26.22 at 5:04 pm

Dear Janet,

Either you truly are a wussy Canadian who’s parents did everything for you, including math homework, you’re so bored with walking around with your nose in the air that you needed validation (I hear that’s happening a lot amongst you people – the wealthier you get the more validation from ‘regular’ people you need. ‘Cause you’re bored and lonely. And nobody cares. I can help!) Or, you’re lying….

Have you read the comment section? Half of them are probably engineers with spreadsheets that will calculate through your woes in an instant…I have other ‘cures’ for your woes, btw….just saying. [email protected]

Garth, If she’s for real she could be potential client. Why bring her here. 1% of 9Mill is a lot of premium gas.

Although, the whining…dear lord, the whining…

Og

#11 ElGatoNeroYVR on 07.26.22 at 5:04 pm

Letˋs be real here.
Morgage rates are 3.5% for a variable – that is what people will get ,the lowest available rates.
At rents of 2K+ there are no savings left to invest for the target group , so cut the whole opportunity cost herring.
In the end yes, buying is still more than renting for sure but nowhere near double .
The main issue is that rents are crazy to begin with and it will only get worse as owners either bow-out and sell or switch to short term .
Rent controls and insane tenant friendly regulations like in BC will just drive landlords out and make the rental stock lower so higher rents to a point where the perceived advantage is minimal – and theoretical .

#12 Squire on 07.26.22 at 5:06 pm

Let’s review. Retired. Sixties. Modest income. Nine hundred thou saved. Ninety per cent of net worth sitting in one piece of land worth $8.5 million in equity. And the question is: should we live frugally so we can maybe have $25 million in a decade when we’re in the last years of our life, or sell now and harvest an income of seven hundred thousand, to enjoy for the next twenty years or more while preserving eight million?
—————————————————–
Did they really have to ask that question ? There is only one answer here. Sell, enjoy your life and if you can’t make $8 million last until death living frugal, then there is more to the story we don’t know. Math is hard.

#13 Dr V on 07.26.22 at 5:10 pm

“Our property will likely be worth triple in 10 years.”
———————————————————–

That is quite a prediction. Anything to back that up? Maybe blogger Philco has an opinion. Property tax must
be hefty.

#14 Søren Angst on 07.26.22 at 5:10 pm

#2 JPN

Too funny.

THAT was good.

#15 Flop… on 07.26.22 at 5:13 pm

#96 Bdwy on 07.26.22 at 9:09 am
My folks own in the SFU area, I visit them often, on my way there I see For Sale signs galore, Burnaby Westridge, on my next trip, usually a few days to a week, the signs show SOLD.
Most of those places are in the 2 to 3 million range, are they selling because the prices are dropping or???
…….
What flop is not mentoning…. move in ready or newer or nicer places are still very strong. Very strong. Fast sales at full prices.
Its the dogs breakfasts that are weaker. The union st example is close enough to a newer modular housing that needles could likely thrown from a junkies window directly into the backyard.
Ant non junk sfh still selling in a week or 2. See 2134 E 3rd. 5 dom 2.2m

//::////////////////////

My apologies Quint, I would appear I didn’t put enough marmalade on the speculation toast.

Let me try again.

Vancouver real estate is infallible and will never correct.

This message has been approved by the Vancouver real estate speculation board…

M48BC

#16 Nora Lenderby on 07.26.22 at 5:14 pm

Janet dear, cash out the land unless you plan to develop it yourself, let someone else build and run a business.

In my part of Eastern Ontario (unfashionable outer spiral arm of Bunnypatch), we have many, many leftover properties like this, some of them owned by people who have since died.

There are no pockets in shrouds.

#17 Stroller on 07.26.22 at 5:14 pm

“The lost investment potential of the down payment (at 6% annually)”

Your argument is unassailably sound. Why diminish it with glib hyperbole? You know very well that if you saw an investing firm offering a guaranteed sustained net gain of 6% annually you would cry foul.

Try 3.5%. It scans much more effectively.

Where did I say guaranteed? An average 6% return (dividends included) on a B&D portfolio over five years is quite realistic. – Garth

#18 The Great Gazoo on 07.26.22 at 5:20 pm

#9 Don Guillermo

Thanks for the link to the profile. Interesting. Good to see that folks can find a Nice place to live within their budget and be happy.

#19 Timmy the TIGER on 07.26.22 at 5:23 pm

and MATH obviously is not a requirement to be a Finance Minister, Central Banker, or Politician that handles the collective bank accounts of taxpaying citizens.

Funny how that rubs off.

#20 Søren Angst on 07.26.22 at 5:31 pm

To be precise, Garth today dabbled in Arithmetic.

Math branches, scroll to big tree on this page replete with definitions (tree for the tree huggers) *:

https://leverageedu.com/blog/branches-of-mathematics/

———————-

* Speaking of Tree Huggers.

Everyone with the rage to be Eco Responsible, Hug the Planet (and a tree), Go Green Go!

UNTIL the prospect of freezing this Winter becomes very real. Green by convenience until it affects them personally. No one will care about ESG.

https://twitter.com/Reuters/status/1551827251800510465

[Image: An aerial view shows coal at a dry bulk terminal of German Rheinberg-Orsoy harbor along Europe’s most important shipping way Rhine in Rheinberg near Duisburg, Germany, April 6, 2022. ]

German in between the lines, charts, maps when a few words would have sufficed “Fire up the Coal Plants”

https://www.dw.com/en/russia-to-further-slash-gas-deliveries-to-germany-via-nord-stream-pipeline/a-62588620

Deutschland Energiewende (“energy transition”) has made the country a world** leader in renewable energy development.
– Nov 2015

https://www.irena.org/publications/2015/Nov/Renewable-Energy-Prospects-Germany#:~:text=Germany's%20Energiewende%20(%E2%80%9Cenergy%20transition%E2%80%9D,leader%20in%20renewable%20energy%20development.

** former

I ‘dunno, maybe better than France that glows at night in the countryside for all the NUKE electricity plants they have, 45% of their Uranium is made in 🍁 GO CANADA GO!

You great big tree huggers you.

https://en.wikipedia.org/wiki/Energy_in_France#:~:text=nuclear%3A%2074.5%25,and%20other%20renewable%20sources%3A%200.1%25

#21 Penny Henny on 07.26.22 at 5:31 pm

#114 Shawn on 07.26.22 at 1:58 pm
5 Year Canada Bond yield fizzles to 2.85%
Pity institutional investors who accept 2.85% on these 5 year bond that they will hold to maturity. Meanwhile all-ya-all can do quite a bit better on a GIC and certainly on pref shares.

Nobody buys a 5-year Canada bond for the yield. – Garth

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

to look safisticated?

#22 ElGatoNeroYVR on 07.26.22 at 5:31 pm

Let’s do this math the way a home buyer will do it : if you buy you pay over 25 years roughly 293,000 in interest costs ,so $976 monthly. Add your strata and prop tax and you are at $1,600 monthly in carying costs.
So if you can afford the (agreed, much) higher payment to buy in the long term you are ahead.
I always shake my head how people comparing only use the first 5 years when your interest payment on the mortgage is the highest .Be fair ,use the average over 25 years for a similar comparison.
That is why the person with the spreadsheet cannot convince anyone, home buyers buy to hold for life not flip every 5 years. :-)

Who lives in a 700-foot, one-bedroom condo for 25 years? – Garth

#23 I’m stupid on 07.26.22 at 5:34 pm

Math is hard because people are stupid.

Here is my situation just for some perspective.

I’m 42 my wife is 38. We have 2 children 4 and 1. I’m a saver for the future but things can get turned on their head real quick. My wife was recently diagnosed with a rare lung disease. She’ll be lucky to make 70. The odds are in her 60s she’ll succumb. I’ll most likely be retiring a widow. So all the things we planned to do in retirement are no more.
We bought a little home on a big lot so we could build our dream home when the kids are a little bigger. That’s now out the window. Life has changed so our dreams and goals changed with it. Instead of waiting for later to see and do the things we want we’re doing them now.

Her diagnosis although hard put things into perspective. As Garth has said, time is the most precious things to have. We still have some so no time to waste. Don’t try to be the richest person in the cemetery!

#24 Søren Angst on 07.26.22 at 5:35 pm

Where did I say guaranteed? An average 6% return (dividends included) on a B&D portfolio over five years is quite realistic. – Garth *

More than conservative Garth.

July divs all in for me.

July dividend yield annualized:

24.4%

YTD average dividend yield:

28.8%

————-

*6% I’d say is done right miserly.

#25 Søren Angst on 07.26.22 at 5:41 pm

Where did I say guaranteed? An average 6% return (dividends included) on a B&D portfolio over five years is quite realistic. – Garth *

Forgot, the div yield numbers I Commented about are:

1. After tax – removed at source for me as a Non-Resident.
2. Do not include stock price appreciation.

This, in light of the above, change

Miserly

to

* Meagre

#26 Penny Henny on 07.26.22 at 5:42 pm

#4 crowdedelevatorfartz on 07.26.22 at 4:48 pm
My God.
65 and 62.

$4200 per month in pensions = $50k/year..
$900,000 invested.
Property worth $9,000,000
//////////////////

Split the difference.
Sell half the property to an investor for $4.5 mil and let the other half roll.

#27 IHCTD9 on 07.26.22 at 5:47 pm

There is no facet of mathematics more frigged up than a renter and a homeowner sitting down to decide who’s in the red.

Except maybe whatever equation Janet is working on.

#28 Shawn on 07.26.22 at 5:53 pm

No one is allowed to point out that a dollar going to pay down principal of a mortgage is different than a dollar paid in interest.

And what would be the point? One can always twist the math to get whatever answer is desired.

Rent or buy who cares, not me?

Put your kids in daycare or be a stay at home parent and I don’t care which. (Just don’t home school your kids because I will then judge you to be somewhat crazy and not doing your kids any favor)

To each their own … mostly.

Not sure why people need others to do what the did in terms of buy versus rent. I guess a human need for validation and acceptance?

All mortgage debt repayment was accounted for in my summary. – Garth

#29 DON on 07.26.22 at 5:55 pm

#23 I’m stupid on 07.26.22 at 5:34 pm
Math is hard because people are stupid.

Here is my situation just for some perspective.

I’m 42 my wife is 38. We have 2 children 4 and 1. I’m a saver for the future but things can get turned on their head real quick. My wife was recently diagnosed with a rare lung disease. She’ll be lucky to make 70. The odds are in her 60s she’ll succumb. I’ll most likely be retiring a widow. So all the things we planned to do in retirement are no more.
We bought a little home on a big lot so we could build our dream home when the kids are a little bigger. That’s now out the window. Life has changed so our dreams and goals changed with it. Instead of waiting for later to see and do the things we want we’re doing them now.

Her diagnosis although hard put things into perspective. As Garth has said, time is the most precious things to have. We still have some so no time to waste. Don’t try to be the richest person in the cemetery!

*****
I am sorry to hear about your wife. As parents the only thing that really counts is spending and enjoying time with your children. Live in the moment as best you can.

My oldest sis is a pallative care registered nurse and her clients wish they had more time not more money. I wish you and your family all the best. Never give up hope.

One day at a time.

#30 Broader Mind on 07.26.22 at 5:59 pm

#21 Penny Henry. Not safisticated and not institutional buyers . Only government with a printing press on full can buy those bonds. Even 6% divies are a losing proposition right now.

#31 Søren Angst on 07.26.22 at 6:04 pm

Off Topic, sort of.

Slow day at Bloomberg (and at the Bean Counters).

Rome’s Ancient Colosseum Gets $79 Billion Price Tag at Deloitte

https://www.bloomberg.com/news/articles/2022-07-25/rome-s-colosseum-may-be-priceless-but-deloitte-puts-it-at-79-billion

One word:

Americani.

#32 ElGatoNeroYVR on 07.26.22 at 6:07 pm

Who lives in a 700-foot, one-bedroom condo for 25 years? – Garth
=========
My point was more to the methodolgy of using 95% of the payment as cost vs. actually averaging over the 25 years it would take to pay down.
Afterall if one doesn’t want to rent a 700 sqft for 25 years it would cost them more as well, altough plenty of renters live in even smaller places for a lot longer.
When I first build my decision spreadsheet some 20 years ago it came in as pretty much break even or a bit more to buy in a normal RE market ( 2% annual price increase for an SFH ,1.2% for a condo).

#33 Brad on 07.26.22 at 6:17 pm

All good points. But doesn’t the same math thing kind of also apply to investments? If I start with $100,000, and it goes down by 40%, I now only have $60,000. But if my investments go up by 40% again, I now only have $84,000. So when they say markets ‘recover,’ it’s harder to crawl out of a downturn even if things ‘improve’….unless I’m also missing a math thing or two….

People don’t use 20x leverage to fund their RRSP. Irrelevant. – Garth

#34 Smartalox on 07.26.22 at 6:20 pm

Just read the story that Garth was interviewed for on cbc.ca.

https://www.cbc.ca/news/canada/ottawa/ottawa-family-home-sale-price-market-1.6531055

True to the CBC’s “infotainment” format, the breathless headline was “Sellers caught by price drops, as housing market cools”

Long story short: an Ottawa couple bought a house in 2015 for $350 000. Sold that house in 2022 for $740 000.

A $390 000 (tax free) profit from the sale, in seven years of ownership.

But they’re “losers” because their neighbour sold a ‘mirror image’ of their house for $890 000. They could have had another $150 000 if they’d listed three weeks sooner.

But that’s not the actual cause of their pain. The article also states that “the couple saw a larger home being built just up the street” with a two car garage and a yard and decided to buy that one, putting down a $100 000 deposit.

So they bought a larger place at a price that surely was at an all-time high, and now require a higher mortgage (at generationally high rates) to pay for the larger, more expensive home.

But assuming that all homes in the neighbourhood fell by the same %, the 17% drop they saw in the value of their first home likely would have also applied to the value of the new home, too. Since the new home is (presumably) priced higher than their old home, the $150 000 ‘lost’ on the sale of the 1st house would have been offset by the 17% reduction in the price of the larger home.

Alas, our hero Garth was not able to save them. His contribution to the piece was to act as the voice of wisdom, delivering a thinly veiled ‘I told you so’, and not even to the couple in question.

#35 Quintilian on 07.26.22 at 6:21 pm

Why I don’t think highly of curmudgeons.

Exhibit A:

“And here’s Janet. What a First World math problem she brings us.”

#36 Doug t on 07.26.22 at 6:29 pm

GOOD GREEDY LORD – no brainer jeezuz

#37 NOSTRADAMUS on 07.26.22 at 6:44 pm

NO KILL SHOTS.
A successful speculator Learns from his mistakes. The problem that today’s speculators are now facing is that for countless years they have made only baby mistakes, and even those where few and far between, and easily corrected. The tail wind from zero interest rates, ample liquidity and light lending criteria are never factored into his success story. He developed Midas Hands, everything he touched turned to gold. Consequently, never making any real mistakes he will assume he is always right and continue to up the ante on his speculating game. To date, he has missed all the kill shots, with no humbling lessons learned. With no experience to navigate troubled waters, there is a good chance he will now flounder and lose it all. Life is a learning process. We advance only as we learn. And the mother of all inventions is our mistakes. Learn well from your mistakes if you wish to survive. And stop blaming other people.” Are you not entertained?”

#38 [email protected] on 07.26.22 at 6:47 pm

Holy Crow! Carpe the Mother-Muffin’ Diem Janet!

This has to be the clearest example of real estate addling people’s brains.

#39 yvr_lurker on 07.26.22 at 6:50 pm

Good job with the numbers. Weren’t you an Arts student in college? Must have learned new skills along the way. The price of rentals is assumed to be fixed in time (which is not a good assumption due to renovictions and having to look for new digs at much inflated rates). However, it does not affect the conclusion over a 5 year period.

However, the law of 40% also applies well to “investments”. Imagine some poor dude with 100K in bitcoin. A 40% haircut, followed by the hoped for 40% increase (due to imaginary fools inflating it), leads to a 16K loss.

B+D portfolio was 165K, 10% loss since January will take a while to recover when the mythical 10% increase happens over the next ??? months/years. With Russia likely completely turning off the gas to Europe, the ripple effect of this will not be good for a market recovery. More bad ^&^&* is going to happen with this over the next 6 months–year for sure.

You seriously reference a graduate degree of 50 years ago, assuming no professional courses and designations since the age of 21? Only kids do that. – Garth

#40 Rations on 07.26.22 at 6:55 pm

#97 Senator Bluto on 07.26.22 at 9:17 am
Just reading about Trudeau’s newest enviro-cause, The War on Nitrogen fertilizers.

I work with a guy who does all organic grain farming. His crop yields are ONE-THIRD of farmers who use fertilizers. And he can’t use manure because manure contains all kinds of weed seeds that will trash his land because he can’t use herbicides or pesticides either. His yield would then drop to ONE-FIFTH. Massive Catch-22.

Trudeau’s Nitrogen War will turn Canada from a breadbasket to the world into a country barely able to feed itself.

Are there no grownups in Trudeau’s inner circle or are they all math challenged buffoons?

#102 crowdedelevatorfartz on 07.26.22 at 10:25 am
Sri Lanka eliminated subsidies for fertilizers used by farmers.
The country went from self sustaining food supplies to food riots in about a year.

https://foreignpolicy.com/2022/03/05/sri-lanka-organic-farming-crisis/

One wonders if Trudeau has ever had dirt under his well manicure fingernails at any time in his gold plated life.

An overnight organic farming switch …is…a….disaster.

Lets hope the fertile manure from Ottawa has life giving qualities.

—–

So…

Weak energy policy and planning is putting western nations between a rock and a hard place.

Conclusion: Seems like we’re heading for an energy crisis.

Fertilizers banned – yields lower.

Conclusion: Seems like we’re heading for some starvation.

Get ready for rations of both energy and food.

It is one of the things still missing in Canada from the good old communist regimes. Back then it was paper coupons, which had a bunch of weaknesses. Now it will all be digital and closely tracked. There will be no way to cheat and get that extra 250gr of meat by using a friend’s coupon, if there was any meat to buy. Or 100gr of sugar, when there was any sugar to buy.

#41 Johnny Debt on 07.26.22 at 7:02 pm

Conclusion: in the absence of sustained, large annual increases in the capital value of real estate it makes no sense to buy any.

Also an option in the conclusion section could be that it makes sense to buy when there is some rhyme and logic to the price of the property, usually as it relates to incomes and all that logical jazz. But then again why state the obvious about how out of whack Canadian RE is with reality?

…then again, doesn’t the Condo example illustrate that point?

I digress.

#42 crowdedelevatorfartz on 07.26.22 at 7:12 pm

34 cel in Burnaby at 4pm.
Feels like 37 cel.
My lard is melting.

#43 I’m stupid on 07.26.22 at 7:19 pm

#29 Don

Thank you. We’re hopeful and likely she has 20 good years then 10 not so good ones. Then who knows what advancements in medicine will come along. Double lung transplant might be good in 20 -30 years. Anyways it’s better to know and enjoy the time we have together.

#44 yvr_lurker on 07.26.22 at 7:21 pm

You seriously reference a graduate degree of 50 years ago, assuming no professional courses and designations since the age of 21? Only kids do that. – Garth
———

Just being a little snarky like you are with many people, even when they put forth a sensible rebuttal to some of your statements. No major offence intended. I have a sister in law (with an arts degree from 35 years ago) that still struggles with working out basic calculations….

#45 Sail Away on 07.26.22 at 7:29 pm

During these hot summer days, my wife and I often wander about our verdant estate luxuriating in the shade of the massive firs, caressing the magnolias, fertilizing here, clipping and trimming there, cheering all new growth on the oaks and arbutus. Then later, sipping a cold one on the deck overlooking Departure Bay, we sometimes discuss selling the property and downsizing or building a much smaller house, since this one at 1,800 is about twice as big as we’d like.

But then this property would be subdivided into 10 lots with boxy 3,000 sf houses jammed shoulder to shoulder, and all the beautiful trees would disappear. Nope. Just couldn’t stand it. An estate it will have to remain. An estate with dogs sharing pond space with fish on days like this.

#46 Chameleon on 07.26.22 at 7:30 pm

FELIX!

Bad week for cats again. First leashes two weeks back, now they are declared invasive alien species!

https://nationalpost.com/news/polish-institute-classifies-cats-as-alien-invasive-species

Are humans an invasive alien species?

Funny, the article notes there was a discussion on TV and a woman who wrote a book “The Happy Cat” was defending the cats, and did not ask if humans are invasive alien species but instead asked “Ask if man is on the list of non-invasive alien species?” Interesting, and perhaps quite accurate if you think about it.

#47 DON on 07.26.22 at 7:38 pm

#39 yvr_lurker on 07.26.22 at 6:50 pm
Good job with the numbers. Weren’t you an Arts student in college? Must have learned new skills along the way. The price of rentals is assumed to be fixed in time (which is not a good assumption due to renovictions and having to look for new digs at much inflated rates). However, it does not affect the conclusion over a 5 year period.

However, the law of 40% also applies well to “investments”. Imagine some poor dude with 100K in bitcoin. A 40% haircut, followed by the hoped for 40% increase (due to imaginary fools inflating it), leads to a 16K loss.

B+D portfolio was 165K, 10% loss since January will take a while to recover when the mythical 10% increase happens over the next ??? months/years. With Russia likely completely turning off the gas to Europe, the ripple effect of this will not be good for a market recovery. More bad ^&^&* is going to happen with this over the next 6 months–year for sure.

You seriously reference a graduate degree of 50 years ago, assuming no professional courses and designations since the age of 21? Only kids do that. – Garth

***********
Sorry YVR but your post has holes in it.

The only degrees that matter in a bubble are pyschology and economics to a lesser degree.

The renovictions resulted as prices increased, as the bubble deflates renovictions will recede as will other bubble related issues and activities for instance no condition offers, bidding wars etc. We appear to be in the denial stage.

Ukraine escalations will and are hitting Europe worse than North America as we have more oil.

If the SHTF non liquid assets will be hard to sell especially ones still asking for bubblicious prices. The balanced portfolio can suffer…but not as much, as the recovery timeline is much more forgiving and shorter. Stocks are a different matter.

You don’t need a science degree to be a critical or financial thinker. Experience matters and our blog host has A LOT of that.

Sincerely,

#48 DON on 07.26.22 at 7:44 pm

#35 Quintilian on 07.26.22 at 6:21 pm
Why I don’t think highly of curmudgeons.

Exhibit A:

“And here’s Janet. What a First World math problem she brings us.”

*********
LMAO

Good one. I had the same thought. Should I be sad that they were done in by their own greed.

No doubt they will be reading the comments section.

Put on your flak jacket.

lol

#49 Shawn on 07.26.22 at 7:46 pm

Accounting Math

“All mortgage debt repayment was accounted for in my summary. – Garth”

“The mortgage of $580,000 comes with payments (at 5.24% on a three-year term) of $3,453. Condo fees (average) are $410 a month. Property tax is $200. The lost investment potential of the down payment (at 6% annually) is $725 monthly. So the actual ownership overhead (excluding utilities, insurance, parking) is $4,788. Yes, twice as much per month as renting an identical unit.”

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

As faa as I can see this accounts for the principle and interest as a cash outlay but does not distinguish that the principle part is not an expense but is paying down a loan.

The rules of accounting would require that to be differentiated. But yes on a cash basis you need to come up with that cash just like to save (deposit) money every month in a bank account is a cash outlay but it’s not an expense.

You did say the “overhead” as opposed to the expense so okay. The mom’s of the land in any case understand that paying down a loan is not the same as paying interest. They been giving good advice on that since maybe 1992 but not so good at the February peak.

See GreaterMom.ca

#50 Henrico on 07.26.22 at 7:58 pm

From a purely economic perspective I agree and I was a happy renter for years until my landlord wanted to sell and kick us out. We could see that we would have to accept a smaller place for a big rent hike and go through the trouble of moving which we did not want to do. So we bailed and bought the place. Economically I am not sure whether it was the best decision, but we got to stay in the home we like and we can finally get a dog which no landlord would ever allow. We still max out all TFSA/RRSP and plow the rest into the mortgage. No regrets.

#51 DON on 07.26.22 at 8:02 pm

#42 crowdedelevatorfartz on 07.26.22 at 7:12 pm
34 cel in Burnaby at 4pm.
Feels like 37 cel.
My lard is melting.

*********

Please… don’t eat any chilly beans. May have a biological weapon in the mix. lol

#52 Victor Llearna on 07.26.22 at 8:02 pm

Sheep that buy houses these days are like the federal liberals at math. The budget won’t balance itself

#53 crowdedelevatorfartz on 07.26.22 at 8:04 pm

@#45 Sail Away
“Then later, sipping a cold one on the deck overlooking Departure Bay, …”
++++
Ah yes.
Departure Bay
The verdant estate with the hourly blasts from the Ferries departing and arriving…..

There is a brand new house on Mayne Island at the Eastern entrance to Active Pass.
It sat for almost 2 years with a huge “For Sale” sign on it.
I was curious as to the price and went online.
A massive house on verdant lands for $750,000

The Ferries blast their horn right in front of it from about 100 yards distance…..every hour….on the hour….
BWAAAAAAA
Must be awesome when suffering a hangover.

#54 Stoner Nags on 07.26.22 at 8:04 pm

@Søren Angst

Seriously Bro, can you put it on a diet and post less than 3 comments daily?

#55 Flop… on 07.26.22 at 8:17 pm

Flop Drops.

Can you get a detached house within reasonable driving distance to Vancouver under 650k?

Bang, bang, all over Greater Vancouver at the moment, gun violence in Chilliwack, yeah, but it’s apparently everywhere.

What about if you just need shelter from the rain, not bullets?

The details…

47470 Chartwell Dr, Chilliwack.

Asking 649k

Just sold for 627k.

People paying way more for one bedroom condos, probably want to gain employment south of the Fraser to make it worth it, though.

It’s detached, but you have to pay 140 bucks a month for maintenance.

I’m o.k with not having to touch a lawnmower, but just like Sammy Hagar, I can’t drive 55.

55 miles to work, that is…

M48BC

https://www.zealty.ca/mls-R2706124/35-47470-CHARTWELL-DRIVE-Chilliwack-BC/

#56 Ponzius Pilatus on 07.26.22 at 8:20 pm

#47 DON on 07.26.22 at 7:38 pm
#39 yvr_lurker on 07.26.22 at 6:50 pm
Good job with the numbers. Weren’t you an Arts student in college? Must have learned new skills along the way. The price of rentals is assumed to be fixed in time (which is not a good assumption due to renovictions and having to look for new digs at much inflated rates). However, it does not affect the conclusion over a 5 year period.

However, the law of 40% also applies well to “investments”. Imagine some poor dude with 100K in bitcoin. A 40% haircut, followed by the hoped for 40% increase (due to imaginary fools inflating it), leads to a 16K loss.

B+D portfolio was 165K, 10% loss since January will take a while to recover when the mythical 10% increase happens over the next ??? months/years. With Russia likely completely turning off the gas to Europe, the ripple effect of this will not be good for a market recovery. More bad ^&^&* is going to happen with this over the next 6 months–year for sure.

You seriously reference a graduate degree of 50 years ago, assuming no professional courses and designations since the age of 21? Only kids do that. – Garth

***********
Sorry YVR but your post has holes in it.

The only degrees that matter in a bubble are pyschology and economics to a lesser degree.

The renovictions resulted as prices increased, as the bubble deflates renovictions will recede as will other bubble related issues and activities for instance no condition offers, bidding wars etc. We appear to be in the denial stage.

Ukraine escalations will and are hitting Europe worse than North America as we have more oil.

If the SHTF non liquid assets will be hard to sell especially ones still asking for bubblicious prices. The balanced portfolio can suffer…but not as much, as the recovery timeline is much more forgiving and shorter. Stocks are a different matter.

You don’t need a science degree to be a critical or financial thinker. Experience matters and our blog host has A LOT of that.

Sincerely,
————–
Completely agree with you, Don.
Math was never my forte, but still I had a successful carrier as a CPA.
For me, “real” Math is Calculus and beyond.
Which is way too hard for most Canadians to grasp.

#57 Mehling on 07.26.22 at 8:29 pm

Garth, I’ve always loved the 10 Downing Street doors.

It’s beautiful.

Congratulations, and thanks, as always for the immense amount of work required to be creative / productive on a daily basis with your thoughts.

Appreciated.

#58 Sail Away on 07.26.22 at 8:32 pm

Ah, what a fine day to don the North Face apparel with Altra shoes for a short Doumont dog walk. Afterward, we swung by Costco and my wife ran in wearing Teva Sandals with a Columbia tank top and cool, summery Paradox shorts for a delicious Kirkland Signature rotisserie chicken while I stayed comfortably relaxed with the dogs in the Tesla, using its innovative climate-controlled ‘dog mode’.

Just another day of minimalism.

#59 THE DANDADA on 07.26.22 at 8:35 pm

Greedy at 65/62 sitting on 9-Million wanting more so you can enjoy it at 75/72 ?

I guess 25-Million gets you a better set of bad azz wheel chairs, personal nurses, and a retirement home on the lake.

Yeah you should probably wait another 10 years to enjoy your life savings.

#60 Wrk.dover on 07.26.22 at 8:46 pm

#23 I’m stupid on 07.26.22 at 5:34 pm

Her diagnosis although hard put things into perspective. As Garth has said, time is the most precious things to have. We still have some so no time to waste. Don’t try to be the richest person in the cemetery!

________________________________

#142Wrk.Dover on 12.27.16 at 1:35 pm
Since I started my self imposed December exile, there has been a lot of bait on which to comment, but on this post I swallow the hook.

I stand firmly on Booms page, in agreement that youth starting out adulthood today are totally screwed compared to the Viet Nam generation. Don’t blame the boomers though it was the WW 2 generation that lit the fire of greed, whilst the boomers built their homes and futures, paying the world warriors double digit interest.

Part of my reason to shut up for a month was that I was tired of talking points with a bunch of 1% asset hoarders, but please hear me out. Garth’s rule of 90 is an excellent mantra, but come on people how about a second amendment, addressing the pursuit of pleasure.

He who has the most stuff when he dies, wins, because he got to play with toys until death.

He who has the most liquid assets when he dies loses, because it represents the unfulfilled dreams, of the deceased.

For over 15 years, my early retired wife and much earlier retired self have budgeted 25% toward saving and 25% for travel on 48 grand total net, through our 50’s and well into our sixties, with out sacrificing budget for the toys which we also enjoy within the other 50%. I am proud of this, what I call accomplishment. A minimum of two ten day trips each winter to a Caribbean 4 star among other yearly trips seems an honourable reward we have achieved at this income/saving ratio level. When inflation starts to eat our DPP, our savings level will be the first to shrink, along with the number of our remaining days on earth, until we eat the savings at the end.

How about you moneyed folk, what % do you spend on beyond the daily grind cost and saving level in your life?

There must be a formula to determine how much of real living is not enough of real living. Time is running out…..

Perhaps I am on the wrong site, speaking the wrong language.
____________________________________

So, Stupid and wife got lucky with a warning shot across the bow rather than a sudden ending.

I’m sure you now both appreciate living more than ever each day while you sort out a revised plan.

Best wishes for the four of you from myself.

#61 Quintilian on 07.26.22 at 8:49 pm

Hey Flop,
My feeling is that prices in Van, will be a bit resistant relative to Bunnypatch, and then suddenly SNAP!

The hype machine and pumpers are starting to sound a bit desperate.

The debt junkies are going to get their just comeuppance

Tick Tock, Tick Tock

#62 baloney Sandwitch on 07.26.22 at 8:59 pm

#23 I’m stupid.
Thanks for the post. Great reminder, our time on this earth is short.
Many of us blog dogs are savers and accumulators. My guess is all regular readers are in the top 5% of net worth. It is hard to shift into decumulating. We don’t know how. Garth – that is the topic for one day.

#63 BCWally on 07.26.22 at 9:01 pm

I ran those numbers through an online compound interest calculator and I ended up with the renter having $292K after three years if I’ve done this correctly.
That’s assuming the renter contributed to the initial $145K with the $3K the renter had saved every month by not owning, at 6% yearly.
True that you would have to make 200K a year or so to do this.
I did it again at 10 years and ended up with $757K+. I have to believe rent would increase, but so should the salary.
Speechless at the life possibilities.

#64 Mad Money Cramer on 07.26.22 at 9:01 pm

Ah, the good ol’ rent vs own argument.

There is a dude up in the Okanagan who has a beautifully coded rent vs own model that every Canadian should have access to. I mean this thing is gold. It tells you the future impact of the decisions made today in real time.

You put in your numbers and it gives you future projection curves surrounding your wealth growth given the decision and choice on whether to rent or own.

Every person at any age needs to do this, but try finding the tool to help assist you.

The math is hard and putting it all together is even harder. You are tying in economics, financial markets and government policies to figure out how to navigate and make life changing decisions. This is why we need to put money behind these genius people who have built these tools and get them on the Internet for people to use.

#65 Brian on 07.26.22 at 9:06 pm

Math must be hard. LOL!

I was in line at grocery store yesterday. Guy in front of me was checking out. The cashier (looked to be in her twenties) asks how many cobs of corn he had in the plastic bag. He replied it was half a dozen. She then asked again, ” yes but how many is that?” OMG!

#66 Sail Away on 07.26.22 at 9:10 pm

#53 crowdedelevatorfartz on 07.26.22 at 8:04 pm

Ah yes.
Departure Bay
The verdant estate with the hourly blasts from the Ferries departing and arriving…..

———

Yes, the Airchime Air Horns (or proper ship terminology is the Ship’s whistles), built by Canada’s own great air signal visionary Robert Swanson 1905-1994 of Vancouver, BC, will indeed catch one’s attention, particularly since the Queen of Nanaimo’s horns are unique compared to her six sister ships, melodiously expelling a 3 chime sequence consisting of a KM-200, KM-250 and a KM-165 model, endowing her with a sound close to a Trumpet F Major.

At the time of her being built, Airchime was located at 14 Powell St in Vancouver, BC. In Much later years, Airchime moved out to Langley, BC into the Glouchester Industrial park and later was acquired by the Kahlenberg Air Horn Company of Twin Rivers, WI in the USA.

#67 Ronaldo on 07.26.22 at 9:12 pm

#4 crowdedelevatorfartz on 07.26.22 at 4:48 pm
My God.
65 and 62.

$4200 per month in pensions = $50k/year..
$900,000 invested.
Property worth $9,000,000

……and they’re thinking of waiting another 10 years to reap the benefits?
——————————————————————
This one tops them all.

#68 Shawn on 07.26.22 at 9:19 pm

Shopify had said yes you can work from home.

Now they say just stay the f home forever you ain’t working here no more.

#69 crowdedelevatorfartz on 07.26.22 at 9:24 pm

@#55 Floppie
“Flop Drops.”

++++
I’m thinking you should restart your “Pink Snow” Blog.
No shortage of red ink to list……for the next 2-4 years?
:)

#70 Janet B on 07.26.22 at 9:40 pm

Well. My email made it on here. Thanks Garth. I fully expected if it made it there would be comments from the peanut gallery. I especially loved ogdoad’s comments….but what do you expect from someone named Og? Social media, forums, and blog comment sections are so wonderful. They allow us to armchair quarterback others lives. Thanks for your comments, Garth. As far as math. You’re right. I stunk! We are unlikely to sell soon even though our neighbour across the road with 36 acres did last month to some big developer. Janet B

#71 inflation is rampant on 07.26.22 at 9:45 pm

Chinese officials in 2019 detained a Fed economist and tried to coerce him to share data and information on U.S. government policies: WSJ

He was then promptly released when Beijing discovered nobody at the Fed has any clue what’s going on…

true story. they have no clue.

#72 Adam on 07.26.22 at 9:47 pm

““Can you give the millennials a lesson on how percentage works?”

Whoops posted in the wrong comments. Anywyas… Millennials aren’t the only ones who need a lesson in math. Boomers and gen-xers are equally bad. No need for “Chalkie” to single them out.

#73 Parksville Prankster on 07.26.22 at 9:50 pm

Things I Hate:
1) Posting on blogs
2) Lists
3) Irony

#74 crowdedelevatorfartz on 07.26.22 at 9:50 pm

@#51 Don
“Please… don’t eat any chilly beans. May have a biological weapon in the mix.”
+++
Im thinking a “Perpetual Methane machine”
But organic power like that…if unleashed…..

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

#75 KLNR on 07.26.22 at 9:56 pm

what the hell are they waiting for?
You can’t take it with you, enjoy what remaining healthy years you have left.

#76 Outrage on 07.26.22 at 10:08 pm

#9
My friend lives in the middle of Mexico, Veracruz state. He doesn’t lie, I think he even does it on $ 500. He pays $175 cad including utilities a month on a 6 month lease. $200 a month groceries. I have another friend rents a place for 3000 pesos a month. Do the math. Its real ,you just got to get out of the tourist zone. I lived in PV for under $1200 a month in PV. Leave Canada if you can’t afford it here.

#77 Nora Lenderby on 07.26.22 at 10:08 pm

#54 Stoner Nags on 07.26.22 at 8:04 pm
“@Søren Angst
Seriously Bro, can you put it on a diet and post less than 3 comments daily?”

Just exhale, dear. Take it easy. Ignore the messages/messengers you don’t care for. There are a lot of worse things going on.

I think Mr. Vita’s offerings are quite interesting. He’s practically an institution.

#78 Hugh Jorgan on 07.26.22 at 10:09 pm

“Can you give the millennials a lesson on how percentage works?” They only understand percentages when it comes to the alcohol content in their hoppy craft beer and how much to tip the server who brought that beer to them. Usually anything over 15% in that regard frightens them.

#79 The Woosh on 07.26.22 at 10:18 pm

I think I’m going to frame this one! Look at that…and I didn’t even need to be “Firsssst!”.

Like I said, it’s all shades of grey. And look at that…less crazies making off topic comments today. Most excellent! My job is done.

#80 Sent on Rags on 07.26.22 at 10:23 pm

#76 Nora Lenderby on 07.26.22 at 10:08 pm
#54 Stoner Nags on 07.26.22 at 8:04 pm
“@Søren Angst
Seriously Bro, can you put it on a diet and post less than 3 comments daily?”

Just exhale, dear. Take it easy. Ignore the messages/messengers you don’t care for. There are a lot of worse things going on.

I think Mr. Vita’s offerings are quite interesting. He’s practically an institution.

Yeah, you’re right about Dolce. But if he knows he’s going to post so much, just put it all in one comment. Makes it easy to find for his groupies. Like TN does it.

#81 crowdedelevatorfartz on 07.26.22 at 10:24 pm

@#65 Sail Away

Excellent history lesson!
Years ago I was working downtown as a building engineer.
I knew the guy in charge of the old BC Hydro building on Burrard St. during the conversion to condos.
We crawled all over that old beast of a building.
Massive electric boilers in the basement.
A separate electric hoist for all the cash deliveries when people actually paid their bills in person to BC Hydro.
And the Air Horns on the roof of the building that Blasted the first few notes of “Oh Canada” at 12 noon.
We were up on the roof of the building at 5 minutes to 12 and I asked my buddy if we could stay for the “blast”
“Sure”
At about 10 seconds to 12 I asked , “How loud is it when it goes off?”
“No idea. I was never stupid enough to be up here when it did”

Even with our fingers in our ears……it was epic.

#82 Ronaldo on 07.26.22 at 10:26 pm

#45 Sail Away on 07.26.22 at 7:29 pm

Sounds like Stephenson Pt. Rd.

#83 Don Guillermo on 07.26.22 at 10:28 pm

#75 Outrage on 07.26.22 at 10:08 pm
#9
My friend lives in the middle of Mexico, Veracruz state. He doesn’t lie, I think he even does it on $ 500. He pays $175 cad including utilities a month on a 6 month lease. $200 a month groceries. I have another friend rents a place for 3000 pesos a month. Do the math. Its real ,you just got to get out of the tourist zone. I lived in PV for under $1200 a month in PV. Leave Canada if you can’t afford it here.
#########
I wasn’t implying anyone was lying. Just pointing out what costs are where I live if you don’t want to live in poverty. Most of us don’t. You’re right about Mazatlan being a tourist zone. It’s the number 1 destination for Mexican tourists in Mexico and crazy busy in summer. Thankfully it’s no PV.

#84 mike from mtl on 07.26.22 at 10:37 pm

Who lives in a 700-foot, one-bedroom condo for 25 years? – Garth
////////////////////////////////////////////////////////////

I have relatives who did just that, ‘survive’ two housing corrections to sadly arrive at zero ownership after four decades in TO.

Sometimes it is truly different within your limited lifetime.

#85 other guy in Vancouver on 07.26.22 at 10:54 pm

I’m appalled this had to be explained to anyone who graduated from elementary school.

#86 Philco on 07.26.22 at 11:01 pm

WF pickles…do you have a brain disorder?

Anywho…..everyone gets a haircut.
Destroying the purchase power of money is no joke.
Now you know what goes straight up gets the gravity feed back in time.

Garth I think you deleted a few of mine. Not sure so busy can’t read back all. Lol

#87 Sail Away on 07.26.22 at 11:06 pm

#59 Wrk.dover on 07.26.22 at 8:46 pm

Re: early retirement/enjoy life

Hey WD, there are many ways to structure one’s life, and yes, satisfaction, if possible, is important for contentment. Early retirement is indeed one way to do this. Another is to put great attention and effort toward building a dynasty for the next generations.

Everybody works, whether on home projects, hobbies, or a separate job. There can be satisfaction in all types of work, especially when it comes with autonomy. There’s a reason Buffett and Munger keep working in their 90s. It’s satisfying and they do exactly what they please… because they arranged their life that way. For another example, consider the author of this blog.

It’s also possible to live simply while holding lots of leverage- money can be like bringing an excavator to a shovel job. And that’s fun, too.

#88 Inadequate on 07.26.22 at 11:16 pm

Janet should really follow through with her plan. After all, the land will triple in value in 10 years. Heck, I personally would suggest that they wait for another 30 years until the value of the land is at least 20 time higher.

#89 ponnaps on 07.26.22 at 11:25 pm

nother important math lesson for those flogging the “sell high buy high, or sell low buy low if the market crashes x% , the mortgage carried remains the same”

no, the mortgage carried also reduces by the same x%

#90 TurnerNation on 07.26.22 at 11:29 pm

#40 Rations on 07.26.22 at 6:55 pm

^^ You read my mind. Wasn’t gonna post there, here goes.

–Food Supply. With the Former First World Countries acting in concert crimping the farmers (also in Ireland, Netherlands et al.) is Kanada’s Wheat Basket under attack? I maintain global WW3 was unleashed upon us March 2020.
UKRAINE – one of the top exporters of wheat fell in a coup. Go ahead fly that flag, no one will lift a finger to help them. By design.
What I say: The First World countries get economically bom’d. The 2nd and 3rd World Countries get bom’d.

GEE I never saw this coming. Down to the letter — the writing was on the wall, back then.

#91 TurnerNation on 12.17.19 at 8:06 am
For years now I’ve stated a time will come whereby armed government men destroy perfectly good food stuffs while desperately hungry people look on. Maybe the WHO says there is a virus, or maybe the correct ‘carbon permit’ was not obtained beforehand

#49 TurnerNation on 09.10.19 at 8:54 pm
I beleive in my lifetime good foodstuffs will be trashed as armed men look on and people are starving. Maybe the correct karbon permit was not applied for, or the WHO claims dread disease and we comply. Trees have more rights than yourself.

#28 TurnerNation on 05.28.20 at 9:07 pm
yeah the spoils of this War are already being divided up. Meet the shadow govt.
I’ve posted may times for years on here they I expect soon perfectly good foodstuffs forced into waste as we hunger, or wailing families kicked to the curb, all by armed govt men. The reason? Oh it will be along the lines of home Energy Audits failed, or Carbon Permits not obtained. Add a dose of food inflation and insurance company gouging. I can cook up a number of oppressive themes. They surely will. All under the guise of Green movement. Green as in dollar bills.
The goal is simply to turn 1st world countries into 2nd

#91 Ponzius Pilatus on 07.26.22 at 11:35 pm

#83 Don Guillermo on 07.26.22 at 10:28 pm
#75 Outrage on 07.26.22 at 10:08 pm
#9
My friend lives in the middle of Mexico, Veracruz state. He doesn’t lie, I think he even does it on $ 500. He pays $175 cad including utilities a month on a 6 month lease. $200 a month groceries. I have another friend rents a place for 3000 pesos a month. Do the math. Its real ,you just got to get out of the tourist zone. I lived in PV for under $1200 a month in PV. Leave Canada if you can’t afford it here.
#########
I wasn’t implying anyone was lying. Just pointing out what costs are where I live if you don’t want to live in poverty. Most of us don’t. You’re right about Mazatlan being a tourist zone. It’s the number 1 destination for Mexican tourists in Mexico and crazy busy in summer. Thankfully it’s no PV.
——————-
Interesting
Seems like there is a caste system among Canadian Expats in Mexico.
Don is obviously a Top Enchilada.

#92 DON on 07.26.22 at 11:44 pm

#73 crowdedelevatorfartz on 07.26.22 at 9:50 pm
@#51 Don
“Please… don’t eat any chilly beans. May have a biological weapon in the mix.”
+++
Im thinking a “Perpetual Methane machine”
But organic power like that…if unleashed…..

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

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

Smart…refuel the car as you go. Think of all the drive throughs or drive ins you can eat at.

#93 Russ on 07.27.22 at 12:04 am

.
A recent study shows that 4 out of 3 engineers are not good with fractions.

Cheers, R

#94 Ed on 07.27.22 at 12:11 am

Talking about maritime horn blows just the other day Disney’s Alaska cruise ship was passing by bunnypatch in the Broughton’s when the VHF crackled with a random dad near Alert Bay requesting the captain to blow the ships horn for his 3 kids on shore.

Chimes of “Wish Upon a Star” reverberated right after.

My faith in the worlds future has been restored.

Thanks Walt…RIP

#95 IHCTD9 on 07.27.22 at 12:35 am

#87 Sail Away on 07.26.22 at 11:06 pm
#59 Wrk.dover on 07.26.22 at 8:46 pm

Re: early retirement/enjoy life

Hey WD, there are many ways to structure one’s life, and yes, satisfaction, if possible, is important for contentment
———

Yep, there’s probably as many roads to contentment as there are people. Our B+D is security, that’s what gives us that warm fuzzy feeling. It’s plan B if needed, but we’d rather pass the proceeds on to the kids.

Got a bud who just retired, he fishes locally almost every day. Goes to his hunting camp up in Barry’s Bay for more fishing, and brings along his .410. A few nights of camping garnished with Partridge, Walleye, and beer – does it get much better? (Well, maybe Rum instead of beer). Couple hundred bucks tops.

Some facsimile of that, will my retirement be. Just add a Salmon boat that I can overnight in, a recreational Pilot’s Licence, and a float plane. From there it’s just fuel, bait, and ammunition.

#96 Jon B on 07.27.22 at 12:56 am

Holy smokes. $9M in land value and hoping it will triple when they hit their mid 70’s while they live off a meager pension income. Absolutely stunning stupidity guided by greed. These folks need far more help than just math. I hope being featured on this blog sets them on the right path.

#97 Steerage Genius on 07.27.22 at 1:09 am

Pope declares residential schools “deplorable evil”. Guess he didn’t listen to the geniuses of steerage who apparently know better?

#98 Balmuto on 07.27.22 at 1:30 am

“Let’s take the average 700-square-foot one-bedder condo in Toronto. These days it sells for $720,000 and rents for $2,150. That price is up a little. The rent is up a lot (17%).” – Garth

Doubt you could rent an average condo in Toronto for $2150. Average condo rent in the GTA is $2636, according to this report:

https://www.torontorentals.com/blog/toronto-gta-july-rent-report-2022/amp

Still, you make the point that cost-of-carry differential for owning is significantly higher in the current interest rate environment than it was just over a year ago when mortgage rates were sub 2%. Will rents rise to meet prices? Or will prices fall to where cost of carry is more in line with rents? Or will they meet in the middle? We shall see.

#99 Nonplused on 07.27.22 at 1:48 am

Maths are hard indeed but so are grammar. All three is important.

Call me a skeptic but I have trouble believing Janet’s story. Anyone savvy enough to end up with a $9 million dollar property should be smart enough to know there is never a right price at which to buy or sell, only a right time. So let’s say they hold the property another 10 years and it doubles in value. That’s a good 9% annual return or so. Almost beats current inflation, although not after tax (more hard maths). Their heirs, if they have any, will be very grateful, or at least they should be. On the other hand RV’s are dropping in price right now as we speak, and the road is calling. $9 million will buy a lot of gas, even with crazy carbon taxes.

Remember, folks. Time is more valuable than money. When you run out of money all you have to do is shaft your creditors and then go out and enjoy the sun. When you run out of time you have to pay your deal with the devil. He always collects. So once you have enough money, enjoy your time. You won’t get any more of it.

Also, I am sure most of the wise commenters here in this fine comments section have realized by now that money is relative. The main difference between my boat and Bill Gates’ boat is that his is a lot larger and he is not allowed to drive it. And his has a heli-pad.

My friend’s dad summed it up best once. “The main difference between us and the rich”, he said, “is that the rich are sitting in a larger hot tub, smoking finer cigars, drinking older whisky, and dating more expensive women.” That, my friends, pretty much sums it up.

All we are is dust in the wind.

#100 Go ahead and spank me on 07.27.22 at 2:08 am

#83, “living in poverty” as a retired dude in Mexico vs ” poverty” in Canada is subjective to the extreme. You can in fact live a very cool life style in a Mexican beach town like Mazatlan or Puerto Vallarta on as little as few hundred a month. It depends on what your expectations are.

I lived that beach lifestyle once upon a time and if all you want is sunshine and a cold beer it’s there. There are plenty of shared houses occupied by all kinds of retired people from many hamlet’s of Canada, US and EU, costs are communal for the most part and meals are shared and enjoyed. The mentioned “$600 a month is plenty. The sunshines every day .

I haven’t seen a snowflake for over a decade as a more affluent retiree living in Thailand. After the upfront visa expense the cost here drops to a fifth of living in Canada . In BC I couldn’t leave the house without dropping at least $200 on even a simple trip to the grocery store. Here food costs for home consumption, with a wife who cooks healthy food very well, are around $50 a week. There’s no price gouging here. No such thing as $10 broccoli.

My general estimate of costs to live well, and we live in a luxury high rise with all facilities ( the same condo would cost around $5000 +++ p/m in Vancouver so I’m told) fitness, two pools, consierge security , laundry etc etc….inc 24/7 air con ( because the sun shines every day) is under $2000 p/m. But you can find quite comfortable accom in BKK for under $500 with fewer amenties and market meals that cost $2.

I’m sitting by the pool, it’s noon, my wife is swimming laps in a 30 meter pool….what are you doing.? The technology is first rate too. Ever since TD etc went online and trading can be done globally, there’s no reason to live out the winter in a trailer park in Surrey BC ( where you can’t leave your bunk without being chased by junkies) when Mexico is a few hours away.

#101 Jane74 on 07.27.22 at 2:31 am

Garth’s point yesterday reminded me what happened in the 1988 crash when I was a Toronto estate agent. Once the sales stopped, the real estate commissions stopped. The agents starved and the brokers started to shut offices. Those posh offices are very expensive to run. Since clients weren’t making profits when they sold, commissions became whatever the agent could grab. I was offered a sideboard once instead of my side of the commission and I took it as they had no money but lots of pride. I moved it to England in 1992 and it is still with me. It reminds me of a lovely couple.

Well then it got worse and offices really started to go out of business and there were instances of the client account going with them. I know this is illegal but if the principal has gone back to Hong Kong or Greece there was nothing we could do about it. Towards the end I directed clients to tell their lawyer to hold the deposit in their client account to safeguard it and to do the same with my cut of the commission. Agents started to cut their office out of the deal.

This is just the beginning of this mess it is going to get far worse.

#102 willworkforpickles on 07.27.22 at 4:09 am

BANNED (Abusive)

#103 under the radar on 07.27.22 at 4:39 am

Don’t wait too long – I had a friend whose father sat on some farmland until it became prime development land . For many many years he scrimped and mortgaged the land to live until he could get draft plan approval. Finally sold to a major and cashed out. Two months later he and wife died in a fire.

I have a mortgage on some land where the owner now in his late 60’s refuses to sell. He could get 6-7 million all day. He holds out for a silly number . I have told him many times to take the money. He has let some rich offers slip away. I like him but am convinced he is not sharp.

Our exit from purpose built rentals is complete with all transactions closing late summer. Motivated in large part by age of shareholders, turning 60, present values and unwinding family ties which intersect these holdings. Doing this now avoids having to deal with spouses or adult children of deceased in case of a sudden shareholder death, paying the capital gains and not counting on children of shareholders to deal with each other, all of whom have no interest in continuing , have busy lives and may be unable to navigate these dispositions without disagreement. Sometimes you need to know when to fold em.

#104 Jane Doe on 07.27.22 at 4:48 am

You’d think with Putin putting the squeeze on EU, ensuring recession and depression style rationing, that Biden and Trudeau would learn something about energy security? Germany listened to the Goofy Greens without a clue towards the security of the nation now look what’s happened. Canada is drowning in an ocean of debt at the same time as Trudeau spends historically, some aimed at gas and oil projects outside Canada, but now attacks Canadian agriculture. It makes no sense. He makes no sense. The Green Nonsense makes no sense. Is he a thrall of Uncle Klausse or is he so angry at Canada for denying him our love and obedience that he’s prepared to wreck the country for generations of future Canadians. Experts are saying Canada can’t recover from this.

#105 SoggyShorts on 07.27.22 at 4:58 am

#69 Janet B on 07.26.22 at 9:40 pm
Well. My email made it on here. Thanks Garth. I fully expected if it made it there would be comments from the peanut gallery. I especially loved ogdoad’s comments….but what do you expect from someone named Og? Social media, forums, and blog comment sections are so wonderful. They allow us to armchair quarterback others lives. Thanks for your comments, Garth. As far as math. You’re right. I stunk! We are unlikely to sell soon even though our neighbour across the road with 36 acres did last month to some big developer. Janet B

*************************
If you sold you could comfortably and without worry of running out spend $2,000 per day until you died.

What would you do with $6,000 per day at age 72 that you can’t do for $2,000 per day tomorrow?

#106 Freedom on 07.27.22 at 5:56 am

Garth, I enjoy your blog and promote it whenever possible.
Just wanted to point out a possible math error in today’s post. A 40% increase on $900K would become $1.26 million, not $1.3 million. Correct?

#107 inflation is rampant on 07.27.22 at 7:16 am

Toronto Real Estate Developers Sold Zero New Single-Family Homes Last Month

https://betterdwelling.com/city/toronto/toronto-real-estate-developers-sold-zero-new-single-family-homes-last-month/

i’m not worried. are you worried? there’s a lot of people that should be.

#108 maxx on 07.27.22 at 7:59 am

@ #3

Unfortunately, being mathematically challenged runs through much more than simply RE. It rips through almost every single purchase in these people’s lives, shedding precious cash. Forever lost.

#109 Shawn on 07.27.22 at 8:08 am

Math and significant digits

#106 Freedom on 07.27.22 at 5:56 am said:

Garth, I enjoy your blog and promote it whenever possible.
Just wanted to point out a possible math error in today’s post. A 40% increase on $900K would become $1.26 million, not $1.3 million. Correct?

*************************
Is that a serious comment? $1.26 million IS $1.3 million.

Note the $900k appears rounded to the nearest $100k so it makes sense to round to nearest $100k after adding 40%. Sheesh. To call that an error… seriously?

Wow, talk about missing the big picture.

#110 Wrk.dover on 07.27.22 at 8:21 am

#105 SoggyShorts on 07.27.22 at 4:58 am
What would you do with $6,000 per day at age 72 that you can’t do for $2,000 per day tomorrow?
____________________________________

Yours is the best math based response of all!

Aside from that, somehow, our 2019 48k net in comment #59 has compound indexed itself to 60k net now.

That’s one OAS more that 62yr old Janet’s current nut.

I don’t think she knows how to live on more than $150/day!

#111 ogdoad on 07.27.22 at 8:36 am

#70 Janet B on 07.26.22 at 9:40 pm

‘I especially loved ogdoad’s comments’

$$$$$$$$:):):):)

There’s more where that came from, Jan.

[email protected]

Og

#112 Dharma Bum on 07.27.22 at 8:54 am

#58 Sail Away

“…for a delicious Kirkland Signature rotisserie chicken…”
——————————————————————————————————-

I once ate an entire Costco chicken while doing my shopping. I handed the cashier the bar code label. She knew I scarfed down the chicken and laughed.

#113 Sensible on 07.27.22 at 8:55 am

Funny, I ran almost this exact calculation last week after talking to another potential condo buyer who told me “I don’t want to pay someone else’s mortgage.”

You’re not paying their mortgage. They’re subsidizing you in hopes that the price growth of that one-bedroom condo that ALREADY costs three quarters of a million dollars is going to outpace:

1. The $25K you paid in closing costs

2. The $38,000 in selling costs you’ll have to pay to exit that investment

3. The 4% annual price appreciation you’re relying on

Just to break even and see a $0 return.

#114 TurnerNation on 07.27.22 at 9:07 am

People want to live here?

Life in our fetid and crowded UN “Smart Cities”.
For those paying attention this all was accomplished very fast and under cover of Corvid in March 2020.
At least three downtown hotels then were turned into shelters. Novotel, Strathcona, Bond. The Novtel in North York is next up.

https://www.blogto.com/city/2022/07/city-bolting-windows-closed-bond-place-hotel-shelter/

“The account, which is run by residents of the shelter, said they believe the windows were bolted shut because someone at the hotel threw an object out of a window, which ended hitting a pedestrian a few weeks ago.
The group acknowledges this action is “not acceptable but may unfortunately be true.” The city’s response? “Physically drilling our windows shut.”


—-Life in the Former First World Countries. As if our rulers care about our health. The past 2 years have been a farce.

.Nursing students staff Toronto ER in ‘tight situation’ over the weekend (toronto.ctvnews.ca)

—- Of course our rulers will cancel Christmas and NYE again. The old culture must go Comrade. Flip whatever they say 180 degrees, to make sense:

Rishi Sunak: I flew home to stop Christmas Covid lockdown | By Kate Whannel BBC News
https://www.bbc.com/news/uk-politics-62259107

#115 crowdedelevatorfartz on 07.27.22 at 9:30 am

@#101 Jane94
“This is just the beginning of this mess it is going to get far worse.”

+++
Yep.
The 80’s were ugly.
The meltdown has just started.

Time to sell the palazzo and retreat to “Fortress America”?

#116 James on 07.27.22 at 10:06 am

Even Doug Ford just had to reduce the price of his home by $400K.

https://www.thestar.com/politics/provincial/2022/07/27/premier-doug-ford-relists-home-for-400k-less-in-the-midst-of-major-housing-correction.html

It’s okay though, he’s never had to have a real job to pay for things, just inherited everything, so what’s a loss of a few hundred grand to this bro……

#117 Philco on 07.27.22 at 10:18 am

Good one Garth. Heads are hard.
It’s all a game folks. Better watch out how you play it you may come up snake eyes.
Hoping for a 60% reduction in housing prices? Lol
Do you no what that will do….
Sad things for all. Everything is connected.

#118 T on 07.27.22 at 10:42 am

#104 Jane Doe on 07.27.22 at 4:48 am
You’d think with Putin putting the squeeze on EU, ensuring recession and depression style rationing, that Biden and Trudeau would learn something about energy security? Germany listened to the Goofy Greens without a clue towards the security of the nation now look what’s happened. Canada is drowning in an ocean of debt at the same time as Trudeau spends historically, some aimed at gas and oil projects outside Canada, but now attacks Canadian agriculture. It makes no sense. He makes no sense. The Green Nonsense makes no sense. Is he a thrall of Uncle Klausse or is he so angry at Canada for denying him our love and obedience that he’s prepared to wreck the country for generations of future Canadians. Experts are saying Canada can’t recover from this.

—————

Stop doom scrolling. Everything is going to be fine.

Once a social algorithm has you, it’s hard to escape the constant barrage of negativity and downward spiral. You can tell who’s falling into the rabbit holes by the language they use.

If you can’t unplug by yourself, seek help.

#119 LJ on 07.27.22 at 10:52 am

Good morning

My query concerns the LTT that is eye wateringly onerous in TO and other places. I am wondering how much our governments took in during the peak of sales and prices vs today.

#120 Jane Doe on 07.27.22 at 11:02 am

#118 re: 104 Jane Doe

So you’re not an informed fact based thinker? Canadas full of sulking dullards in denial. Read again friend, I wrote about what’s already gone wrong, the consequences of which are already tomorrows headlines today and inevitable, and not in a good way. Now fly back to the fridge and grab another, sobriety complicates things and is obviously not for everyone. I stand by everything I wrote.

#121 crowdedelevatorfartz on 07.27.22 at 11:03 am

@#112 Dhama Bum
“I once ate an entire Costco chicken while doing my shopping. I handed the cashier the bar code label. She knew I scarfed down the chicken and laughed.”
+++
Did you also include an entire roll of paper towel to soak up the grease on your fingers?

#122 KLNR on 07.27.22 at 11:19 am

@#104 Jane Doe on 07.27.22 at 4:48 am
You’d think with Putin putting the squeeze on EU, ensuring recession and depression style rationing, that Biden and Trudeau would learn something about energy security? Germany listened to the Goofy Greens without a clue towards the security of the nation now look what’s happened. Canada is drowning in an ocean of debt at the same time as Trudeau spends historically, some aimed at gas and oil projects outside Canada, but now attacks Canadian agriculture. It makes no sense. He makes no sense. The Green Nonsense makes no sense. Is he a thrall of Uncle Klausse or is he so angry at Canada for denying him our love and obedience that he’s prepared to wreck the country for generations of future Canadians. Experts are saying Canada can’t recover from this.

lol.
Jane, take a breath.
and maybe some B12.

#123 Dr V on 07.27.22 at 11:19 am

30 Broader mind

“Even 6% divies are a losing proposition right now.”
—————————————————–

You should consider total return in your assessment. No guarantees of course

#124 Calgary on 07.27.22 at 11:42 am

Will I be able to buy a single detached house in White Rock, BC, for $800K by 2023?

#125 Sail Away on 07.27.22 at 11:48 am

#121 crowdedelevatorfartz on 07.27.22 at 11:03 am
@#112 Dhama Bum

“I once ate an entire Costco chicken while doing my shopping. I handed the cashier the bar code label. She knew I scarfed down the chicken and laughed.”

——–

Did you also include an entire roll of paper towel to soak up the grease on your fingers?

——–

He browsed the clothing section before checkout

#126 TheDood on 07.27.22 at 12:03 pm

#96 Jon B on 07.27.22 at 12:56 am
Holy smokes. $9M in land value and hoping it will triple when they hit their mid 70’s while they live off a meager pension income. Absolutely stunning stupidity guided by greed. These folks need far more help than just math. I hope being featured on this blog sets them on the right path.
_________________________

Yup. My thoughts as well.

#127 Dragonfly58 on 07.27.22 at 12:10 pm

T, 118. ” everything is going to be fine” . Just like Garth’s comment about Canada’s standard of living, this comment is perfectly valid if a person is in a very secure financial position. Say to put a number on it, the top 25% of Canadians. The overall standard of living is probably reasonably stable. Just as Garth asserts. But the distribution seems to be clearly shifting to the more affuent .
Those lower down on the ladder are seeing things much differently.
And for a good portion of the bottom 25% things are most certainly not ” going to be fine “.
The middle 50 % are not in true distress, just a little less each year. But it sure does compound as the decades roll by.
If you are in the club things have never been better. But do remember there are a lot more Canadians sitting on the outside looking in.

#128 T on 07.27.22 at 12:25 pm

#127 Dragonfly58 on 07.27.22 at 12:10 pm
T, 118. ” everything is going to be fine” . Just like Garth’s comment about Canada’s standard of living, this comment is perfectly valid if a person is in a very secure financial position. Say to put a number on it, the top 25% of Canadians. The overall standard of living is probably reasonably stable. Just as Garth asserts. But the distribution seems to be clearly shifting to the more affuent .
Those lower down on the ladder are seeing things much differently.
And for a good portion of the bottom 25% things are most certainly not ” going to be fine “.
The middle 50 % are not in true distress, just a little less each year. But it sure does compound as the decades roll by.
If you are in the club things have never been better. But do remember there are a lot more Canadians sitting on the outside looking in.

—————

Everything moves in cycles.

People need to spend less time doom scrolling and spreading, and more time being productive. This is the point.

#129 Doug t on 07.27.22 at 12:30 pm

Saw a house for sale this morn in Victoria with sign I haven’t seen in several years……
NEW PRICE lol

#130 DON on 07.27.22 at 12:35 pm

#118 T on 07.27.22 at 10:42 am
#104 Jane Doe on 07.27.22 at 4:48 am
You’d think with Putin putting the squeeze on EU, ensuring recession and depression style rationing, that Biden and Trudeau would learn something about energy security? Germany listened to the Goofy Greens without a clue towards the security of the nation now look what’s happened. Canada is drowning in an ocean of debt at the same time as Trudeau spends historically, some aimed at gas and oil projects outside Canada, but now attacks Canadian agriculture. It makes no sense. He makes no sense. The Green Nonsense makes no sense. Is he a thrall of Uncle Klausse or is he so angry at Canada for denying him our love and obedience that he’s prepared to wreck the country for generations of future Canadians. Experts are saying Canada can’t recover from this.

—————

Stop doom scrolling. Everything is going to be fine.

Once a social algorithm has you, it’s hard to escape the constant barrage of negativity and downward spiral. You can tell who’s falling into the rabbit holes by the language they use.

If you can’t unplug by yourself, seek help.

**********

Who let’s a social algorithm do their research for them?

#131 DJT on 07.27.22 at 1:15 pm

Tiny homes is the answer! The average sub-urban lot could hold at least four tiny homes. Municipalities should make it simple to ‘condoize’ lots and provide segmented utilities and set standardized building codes for crane movable units to facilitate easy moving.

#132 DJT on 07.27.22 at 1:18 pm

Its not a recession when it is the goal of current government policy. Moisters should prepare for the monumental shift coming after the US Midterms and the adults are back in charge.

#133 45north on 07.27.22 at 1:24 pm

Nora Lenderby

There are no pockets in shrouds.

pretty funny

#134 Dragonfly58 on 07.27.22 at 1:40 pm

Productive ? I am retired. The only one concerned with my productivity is me. Enormously concerned.
I would love to be more productive. Lack of $ is a huge time waster and a fact of life for many retired people. Several projects more or less on hold waiting for more $ to accumulate.
Once most of us retire it mainly becomes about how much $ you can squeeze out of your life after all your basic living costs are paid for. ( your health is of course #1 , but that is a cradle to grave situation } As middle class and lower Canadians incomes drop relative to costs, inflation etc. the $ left over to use on productive pursuits falls off rapidly.
My dream is to be as productive as my mind and body allow.
My productivity is only limited by my disposible $.

#135 Stone on 07.27.22 at 1:59 pm

#105 SoggyShorts on 07.27.22 at 4:58 am
#69 Janet B on 07.26.22 at 9:40 pm
Well. My email made it on here. Thanks Garth. I fully expected if it made it there would be comments from the peanut gallery. I especially loved ogdoad’s comments….but what do you expect from someone named Og? Social media, forums, and blog comment sections are so wonderful. They allow us to armchair quarterback others lives. Thanks for your comments, Garth. As far as math. You’re right. I stunk! We are unlikely to sell soon even though our neighbour across the road with 36 acres did last month to some big developer. Janet B
*************************
If you sold you could comfortably and without worry of running out spend $2,000 per day until you died.

What would you do with $6,000 per day at age 72 that you can’t do for $2,000 per day tomorrow?

———

Totally agree with you Soggy. It’s a total waste.

#136 Capt. Serious on 07.27.22 at 2:18 pm

When I read about these math stories I’m convinced many people stumble into wealth not through any particular planning but through random acts of doing things that work out well for them. Mind boggling.

#137 Vic Hood on 07.28.22 at 10:00 am

My father was a young man during the 1930s, depression times. If you were absolutely up against it and had to have food money till payday ( if you were lucky enough to have any work at all) the local loan shark would give you a 6 for 5 payday loan, one dollar interest for a week . 20% he’d say, thats my rate take it or leave it. Thing is, Interest rates are expressed annually, not weekly. the vigorish percentage is 20%. the interest Rate is 20% X 52 weeks or 1040%. Work it out. Of course it is illegal, it was then, but it does point up the perils of being so enthused about the upside that you are blind about the downside.

#138 Shawn on 07.28.22 at 1:21 pm

Bond market interest rates down again today

What is happening? Implications?

5 year Canada bond yield down 2.68%. That’s quite a drop from 3.62% on June 14.

It’s often been said that the 5 year Canada bond drives the 5 year fixed mortgage rate. Not sure why it would when banks don’t and can’t issue government bonds. But yes maybe the 5 year government sets the tone. But banks presumably fund 5 year fixed mortgages with 5 year GICs? They can also fund with short term deposits but that is risky.

The 5 year fixed mortgage rates appear to be up this week. I saw Laurentian bank at 4.7% a few days ago. Today the best rate on ratehub is 5.1%

#139 Shawn on 07.28.22 at 1:25 pm

5 year mortgage rates

Banks can issue a 5 year fixed CMHC guaranteed mortgage and then sell that to I believe CMHC to be turned into a mortgage backed bond. The rate on those bonds may be close to the 5 year government bond or at least are driven by it.

With the 5 year Canada down, we may see 5 year fixed mortgage rates come down.

Not assured, since banks have to match deposit yields with lending rates, plus a spread. Those deposits are rising, so loans are unlikely to retreat. – Garth