Squeezed

The latest Mill moanfest from Generation Squeeze – the folks who want to slap an arbitrary wealth tax on everyone with a house worth $1 million+ – made some headlines this past weekend. The usual whine. Millennials (av. Income $55k) need 20 years to save for a downpayment of 20% on the average $900k property. But by then, they’ll be eligible for early CPP. It’s, like, genocide (add sad emoji).

Of course, 5% down is all that’s required to get a mortgage, and most of that can be raided from an RRSP. Or soon through the weird FHSA. But the key point is that anybody making $55,000 should not be buying real estate. Especially some worth almost a million. They’d drown in ownership costs. Better to rent and invest.

But, how about high-octane Millennials? Seems to be a bunch of them around these days. Like Aaron. He & squeeze make $250,000, have an equal amount n RRSPs and TFSAs and he owns a business with promise. Alas, all would be good if it were not for those pesky hormones.

We currently pay around $2200/mo for a new 1,400-foot, two-bed, two-bath apartment with two balconies and concrete between us and the neighbors (the nicest place this born poor entrepreneur has ever lived). The same goes for around $3500 – 4000 in rent in Victoria BC, where we’d like to relocate in order to start a family. Note that even in the $3500 – $4000 range, the chances of finding a place that won’t discriminate against dogs and children is low. We want both.

A two-bed two-bath has come up for sale in Victoria that checks all our boxes. Parking. Downtown. Dogs, children, storage, concrete, windows, check. Initially listed for 950K, dropped to 875K and still sitting. This unit sold for 620K in 2011. Realtor seems game to test how low we can go: 800K, maybe 750K. Condo fees around $500/mo, taxes around $311/mo. We’d put down 20%. Do we try to guess where this market is going to be in a year and make an offer based on that? Or do we hold to see precisely how low its going to go before jumping in. If we say peak for this apartment is 950K, what sort of percentage decrease should we be happy with? Where is this market going and should we gamble on it? When do these mills jump into the market?

The question’s easy to answer: offer whatever you want. The vendors will sign it bac anyway, giving you time to reflect and decide what a counter should be. Asking prices are often pulled out of a realtor’s butt. As a listing ages, it becomes stale (unlike me) and fails to sell for one reason – price. The agent got it wrong. Or the sellers were greedy. Usually both.

Speaking of agents, you need a person to represent you. The cost is zero. You’ll have access to a raft of comparables to ensure fair pricing, and a rep who can help negotiate, advise and look after some closing details. Double-ending has been illegal for a while in BC, for good reason.

Make the offer as clean as possible – get pre-approved for financing, research the building and dispense with a inspection (however you need to visit and view the unit yourself, carefully). But you need a status certificate on the strata, to ensure good finances and decent reserve fund. Plus bylaws you can live with. Also worry about the effect of Comrade Premier Eby’s changes to the very nature of condo living. Buildings can no longer restrict rentals, as before, meaning more transient populations and an increased number of units open to investors and speculation. Typical brainless socialist diddling.

The local realtors are worried. They raise valid points:

“It remains to be seen what effect this may have on the strata market. It is an open question whether these changes will bring any additional rental stock to the market – with BC’s complex Residential Tenancy Act not all homeowners of vacant strata homes have a desire to become landlords and current interest rates are less attractive to investors who may want to purchase strata rental properties. It is also possible that these measures will contribute further to eroding housing affordability as older stratas with rental restrictions were generally valued lower than their rentable counterparts.”

And what about the market? Condo sales in Victoria last month cratered by more than 42%. A mere 136 changed hands. Meanwhile listings have grown weed-like over the past year, up 138%. Condo prices are shead year/year but have fallen month/month. Victoria could be on the brink of a valuation melt, since it’s become one of the nation’s most expensive towns.

Finally, is this really a good financial move? Does it make sense to buy a condo apartment in a market with too many of them already, when you want a kid (or two) and a pooch? Maybe a house is better? And is it wise to buy now at all, given your savings?

The numbers are simple: 20% down is $160,000 and a $640,000 mortgage at 5.59% (3-year, fixed) costs $3,940 a month. Add in condo fees, taxes and insurance, and the monthly becomes $4,850. Add in the lost growth on the downpayment (at 6%) and the ownership cost becomes $5,650. That is a 60% premium over renting. And after three years of mortgage payments ($142,000) you’ll have paid off only $38,000 and still owe $601,200, while the bulk of your savings is gone.

So, Aaron, why would you Hoover your RRSPs and TFSAs, take on over six hundred thousand in debt and increase your living costs by 60% to buy an apartment in an inflated market where condo units are sitting unsold and in over supply? Huh?

There are better choices. Stop listening to your pants.

   About the picture: “Hi Garth! Impressive blog and content!” writes John. “One of our family members is a feisty and loving Maltese named Ivy. She enjoys walks and chasing colourful balls in the yard, and has helped our boys learn how to care and love. I’ve enclosed two pics. One is real. The other is generated by an AI with the prompt: “An impressionist oil painting of a smiling Maltese dog wearing clothing from 2022 fall fashion and holding a Birkin bag.”

124 comments ↓

#1 Robert S. on 12.04.22 at 11:36 am

DELETED (Anti-vaccine)

#2 Shawn on 12.04.22 at 11:41 am

RRSP? You’re Poorer than you think

#99 Dr V on 12.03.22 at 8:06 pm

Great post, and many good comments too!

One thing to consider when figuring out that number is
the composition of your savings/investments. All or heavy on the RRSP? You’ll need more as it is fully taxed.

************************************
Absolutely true. Any net worth statement should show the value of assets AFTER tax. That’s the rule if it is a business balance sheet. Accounting rules demand it.

It’s farcical that financial advisers show an RRSP at full value as it it were after-tax money.

BUT it’s still a great program. Just understand the rules. You put in pre-tax dollars so you should be able to put in a lot more than if you had to use after-tax dollars like a TFSA.

ALWAYS remember that a big percent (30 to 50%) of the dollars in “your” RRSP are pre-tax dollars that will in most cases go back to the government. It’s a feature not a bug.

BUT remember also that having $1 million plus (each if a couple) in RRSP at retirement is a heck of a lot better than having nothing in a TFSA or taxable account and it’s also better than the likely alternative of $500k or less in those plans .

When it comes to RRSPs. Know the rules. Play by the rules and don’t complain about the tax rules which were well known from the start.

And ignore, with great prejudice, all advice to melt down your RRSP or use it up in a year you take off work. You will regret that later unless you die early.

There are far bigger potential problems in retirement than having to pay a lot of tax on a big RRSP withdrawal.

#3 Felix on 12.04.22 at 11:45 am

Don’t be led astray by the puzzlement shown on the canine’s face in today’s photo.

A plastic coloured ball typically has about 37X the IQ of an average dogawful mutt. This pooch is simply bewildered by its wisdom.

#4 West New West on 12.04.22 at 11:49 am

Aaron you are in the drivers seat. Low ball away. Do not care what enyone thinks about your offer, or how pissed off the owner gets. Make the offer and forget about it. If they come back to the table, bargain hard. Dont even start to allow yourselves to even consider what it would be like to live there, it will cloud your judgement. Dont be emotional.

#5 crowdedelevatorfartz on 12.04.22 at 11:53 am

@ Aaron
“Initially listed for 950K, dropped to 875K and still sitting. This unit sold for 620K in 2011. ”

+++
Offer them 700k.
When they come back to you in Feb.
Offer them 650k.

Sales have tanked.
Prices are dropping.
Its going to get much much worse for sellers and their overpriced, rockstar, commissioned sales staff .

#6 Danger Dan on 12.04.22 at 12:01 pm

It’s sad that this is what our culture has been reduced to – unmitigated materialism.

Everyone needs to have it just right these days – the ideal condo, the ideal car, etc.

Look at Aaron, for example. Now, I don’t know him from Adam, but I do know that he wants a dog and kids and clearly he hasn’t factored in the cost of those into his math.

I guess this is why food bank parking lots are filled with leased late model BMWs and Benzes. Sad to see how far our culture has fallen.

#7 TurnerNation on 12.04.22 at 12:10 pm

Step outside, Snot Seasons is upon us. I’m sure that this weblog and the Blog Dogs desire only to stay inside and canoodle with their canines.

–Control over Travel/movement is Permanent. Coming soon to a city near you. March 2020 kicked off all the agendas.

https://www.euronews.com/green/2022/12/02/is-france-banning-private-jets-everything-we-know-from-a-week-of-green-transport-proposals
It’s official: France bans short haul domestic flights in favour of train travel

—–
We will be dialed back to the Stone Ages. De-industrialized/Former First World. Trust the Science?

“March 2022, the federal government introduced its 2030 Emissions Reduction Plan, which provides a roadmap for the Canadian economy to achieve 40-45% emissions reductions below 2005 levels by 2030, building upon the actions outlined in Canada’s previous climate plans.”

———-

Posted here in Mid-2020, from another blog.

“”“We’re in an experiment. We’re now getting a glimpse of what a high tech, low carbon, limited mobility civilization looks like. The technocrats must be loving this – they’re going to have so much data to analyze after the experiment is over. Other major interest groups will use this experiment to further their agendas …”””

#8 AACI Home-dog on 12.04.22 at 12:14 pm

Regarding Ryan’s post yesterday…
Yup, retirement rocks if prepared.
I came upon a David Bowie quote I love…
“the extraordinary thing about aging, is that
we finally become the person we were meant to be
from the beginning”

#9 the Jaguar on 12.04.22 at 12:22 pm

Observations:

Wanting to relocate from where? As an “entrepreneur” with “a business with promise” does your business move with you fully intact and with the same promise? WFH may fade away like a daisy in the desert when the world gets back in full swing. We’re not quite there yet. Be prepared to have the right responses to those questions when you wash up on the beach where you will seek financing.

If out of province be sure to examine the multitude of taxes and costs associated with living in Beautiful British Columbia. This is a province that likes to tax, collect fees, and especially tell you what is not allowed (NDP). ( Don’t get surly BC folk, just sayin’) .

Never buy any condo without a microscopic review of the board minutes, and if it is the unit on Montreal street which was built in 1990 be on high alert for any water ingress issues. Actually, be on alert for that issue everywhere, especially now that ‘atmospheric river’ has been added to our lexicon. Your lawyer isn’t a structural engineer.

I’m always intrigued when someone says they want a home purchase, baby, and dog in one breath. Which one is the gift with purchase? It’s like the good old days when the latest edition of the Eaton’s spring catalog would come out. Somehow ‘downtown’ doesn’t go with ‘dogs and children’, but then I never was a hipster. Do they still have homeless encampments in downtown Victoria? It’s a pretty city, but there are other places on Van Isle that offer more IMHO. You can always go into town on weekends.

The grass at Ivy the Maltese’s house looks pretty good. There is something about that shot that says ‘Calgary’.

#10 Flop… on 12.04.22 at 12:29 pm

Buy this renovated place in nearby Duncan for less than 600k.

Room for kids and the doggo

Put 20% down, mortgage less than 3k.

Detached house means landscaping and space is more important than concrete…

M48BC

https://www.zealty.ca/mls-917913/5200-ELEANOR-ST-Duncan-BC/

#11 DER on 12.04.22 at 12:31 pm

“typical brainless socialist diddling” …good grief Garth , you sound like Pierre P here.
I would argue that Premier Eby’s recent moves are much more about freedom of choice than socialism.
I live in Victoria; BC, for too long, have permitted Strata Corps to restrict both, if a condo owner can even rent their unit out or if the tenant /owner occupant can have children in the suite!
I contend that an owner of a housing unit in whatever form that takes, be it a single family dwelling, a townhouse or an apartment style unit should be free to either occupy that space or rent it if they so choose. Too many “old farts” in Victoria , like yourself, have a belief that any tenant allowed in a building will destroy its value. What nonsense, If I own a housing unit and decide for whatever reason to rent it out I have a self interest to ensure that a choose a decent tenant.
A few years back when my mother passed away , as part of her estate she left my sister and I a condo in a nice area of Victoria. The bylaws in the building did not allow us to rent it out and since neither one of us needed the suite to live in we were forced to sell. We would have loved to find a good tenant and rent it out so that if either of us wanted to live there down the road it would be an option. Not to mention the capital appreciation we missed out on!
These kind of restrictions should never exist. In BC, especially in Victoria, there is a very large pool of affordable housing that is locked out for potential users because of draconian policies. I’ve never voted NDP but I will now!
PS , the couple that wish to move here should wait at least until the Fall of ’23..there will be many more rental opportunities this coming year at reduced rates plus housing prices I believe will continue to decline this coming year. However, with child and dog they are most welcome to Victoria!

Your opinion is formed by your own experience and inability to carry a unit without rental income, even though you inherited it for nothing. I respect you even less, Paul, for insulting me. – Garth

#12 CanadianOne on 12.04.22 at 12:31 pm

Good morning Garth!

Any views on Alberta/Prairies markets as of late?

#13 TurnerNation on 12.04.22 at 12:31 pm

Life in Kanada is like a slave camp. You work hard to pay off your debt to the captors. But they impose more fines upon you (interest rates). You work even harder. Forever.

—–
Alllmost back to normal guys for 2023!
Santa might be delayed his year. Purolator Courier (owned by Canada post) appears to have fired a number of employees over their refusal to get two medical treatments. Fact. Here is the letter.

https://twitter.com/ThevoiceAlexa/status/1596666417214296065

——————

Yep this global WW3 which kicked of March 2020 is for our minds. Musk is just a goofy frontman for the global tech control system. Beware.
Dissidents may find themselves under electronic sedation for ThoughtCrimes. China appears to be the model our rulers align to.

“Musk’s Neuralink Hopes to Implant Computer in Human
(Bloomberg) — Elon Musk’s Neuralink Corp. aims to start putting its coin-sized computing brain implant into human patients within six months, the company announced at an event at its Fremont, Calif. headquarters on Wednesday evening. “

#14 Bob Dog on 12.04.22 at 12:35 pm

Forget moaning and voting. Regardless of what country you live in, when the average home prices reaches 15 times the average family income, it’s time to burn your politicians and lawmakers.

#15 Prince Polo on 12.04.22 at 12:57 pm

However, despite similar sentiments about their financial status, Canadian women are far less risk-averse than American women are. North of the 49th parallel, 42% of women invest in the financial markets. This holds true at all levels of education, even for women without college degrees. More than half of college-educated Canadian women invest in financial markets, more than 10 percentage points higher than their American counterparts.

SOURCE: https://www.spglobal.com/_division_assets/images/womens-paper/241755-global_womens_investor_survey_paper_8.5x11_digital_final.pdf

#16 Yukon Elvis on 12.04.22 at 1:00 pm

#9 the Jaguar on 12.04.22 at 12:22 pm

Never buy any condo without a microscopic review of the board minutes,
+++++++++++
Exactly so.

#17 Leftover on 12.04.22 at 1:21 pm

Having lived in a strata for a few years (“temporary, while looking for a new house”) my advice would be never, ever, buy one. Better to rent if that’s the style of dwelling you want.

#18 When the Whip Comes Down on 12.04.22 at 1:31 pm

Aaron – west New west is right. NEVER hesitate to lowball in a market such as this is now (and it will shift even more to a buyers market in the months to come). In victoria certainly condos are likely to see a larger price reduction in protracted downturn than sfd.
Vic is a govt town though, lots of couples working in govt/municipality/police/military with good pay and can afford steep prices. Some of the public sector also just ratified new collective agreements which saw their wages increase. That notwithstanding doesn’t mean the market is immune to more price pressures. It’s already down from peak and I’ll bet more is to come.

#19 Shawn on 12.04.22 at 1:36 pm

Snot and Virus season

#7 TurnerNation on 12.04.22 at 12:10 pm

Step outside, Snot Seasons is upon us. I’m sure that this weblog and the Blog Dogs desire only to stay inside and canoodle with their canines.

********************************
That’s right. Snot and virus season is here.

And stupidly, people are back to shaking hands. Even after curling games, an ideal environment for runny noses and the inevitable bit of snot on many hands.

Stupid is as stupid does.

Do fist bumps at most people. Or learn to bow.

Else we will soon be wearing masks again.

And for god sakes get your flu shots and boosters. Don’t be selfish.

We really ought to be voluntarily wearing masks in retail stores. I must admit, I am not. (So, if you see me, stay back. Give me space.)

#20 crowdedelevatorfartz on 12.04.22 at 1:37 pm

@#17 Leftover
“Having lived in a strata for a few years (“temporary, while looking for a new house”) my advice would be never, ever, buy one.”

+++
100% correct.

#21 WTF on 12.04.22 at 1:41 pm

Looks like the somewhat moderate socialists with a marginally pragmatic stance under Horgan (NDP light) are going to be going full on communist with Comrade Eby. Instead, if you want available apartments that the owners actually want to rent, how about banning
AIRBNB? The former couch surfing app that has morphed into virtual hotels and has a far greater negative impact than non rental condo buildings.

Just like health care will get “fixed” under these ideological warriors. Interesting to watch governments deflect, obfuscate, defend the indefensible, while haplessly trying to justify the existing, mutating, sclerotic, shambolic mess while using our tax$ to fight Pragmatic existing private sector solutions.

To your point I wouldn’t consider buying a prop until the numbers work either by coercion or meltdown. The renting subsidy spread is too generous at this point. Watching to see what happens during the spring RE season. If listings pop it could get interesting. Realtors may have to make their money hand holding incredulous vendors, watching their assessments drop, and getting teeny offers, or none at all.

#22 crowdedelevatorfartz on 12.04.22 at 1:51 pm

Is Canada facing a more “severe” downturn than the US?

https://www.reuters.com/business/finance/canadas-deep-yield-curve-inversion-adds-boc-rate-hike-dilemma-2022-12-04/

“Red hot real estate sales”
“Sky high debt”
“Slowing 4th quarter economy”

Canadian real estate prices could be soon getting a well deserved kick in the gut.

#23 Alberta Ed on 12.04.22 at 1:53 pm

Victoria? Mild but often lousy weather, limited transportation (ferries), high cost of living and forget ever finding a family physician. Butchart Gardens is nice, though.

#24 DER on 12.04.22 at 1:55 pm

Garth, I was surprised at your reply as I certainly never meant to insult you but I can see how you might have interpreted it that way. Being the same age as you I often refer to myself as on “old fart” so I meant it more as a tease.
In any event , I do apologize as I respect what you do and your opinions.
My point was really that there are too many in the “older generations” in Victoria who feel that allowing a tenant in their buildings will destroy it’s value.
You and I know that there are numerous excellent potential neighbours that choose tenancy over ownership….doesn’t make them “second class” people to live next to in a condo building.

#25 jess on 12.04.22 at 1:58 pm

…a peaceful educating “tax protesters ?” as of 2016
31 were charged -the Paradigm theory,

https://bc.ctvnews.ca/richmond-b-c-tax-protester-gets-30-month-sentence-120k-in-fines-cra-says-1.6180157

Ho failed to attend court for his first scheduled appearance on March 5, 2012, and a warrant was issued for his arrest. The CRA said he “surrendered himself to custody” on Aug. 11 of this year, more than a decade later.

“From 2002 to 2010, Mr. Ho taught interested individuals, known as ‘students,’ the Paradigm theory, which is based on the faulty premise that if an individual declares themselves as a ‘natural person’ they do not become a taxpayer under the Income Tax Act.”

On Oct. 6, he pleaded guilty to two of the charges against him. He was sentenced on Thursday.

In addition to the 30 months he must spend behind bars, Ho was fined 100 per cent of the amount of taxes he evaded, according to the CRA.

The agency described Ho and Paradigm as “tax protesters,” a term it uses for people who use specious legal justifications to claim to be exempt from taxation
=================

Paradigm Founder Sentenced to 5.5 Years in Jail for Tax Protester Scheme

https://www.globenewswire.com/news-release/2016/08/04/1199293/0/en/Paradigm-Founder-Sentenced-to-5-5-Years-in-Jail-for-Tax-Protester-Scheme.html
.

#26 Sail Away on 12.04.22 at 2:01 pm

Thanks Garth.

Regarding renting, I personally always felt in a bit of limbo renting or living in temporary quarters. A permanent place greatly increased my productivity, life satisfaction and capabilities (tools easily accessible, repairs properly done, efficiency upgrades improved over time).

I suspect most people feel this way?

The problem here is the ludicrously exorbitant housing price. It’s just a house.

2 major life hacks: live close to work and relocate as necessary for economical real estate. Think for yourself.

#27 Russ on 12.04.22 at 2:08 pm

Shawn on 12.04.22 at 1:36 pm

Snot and Virus season

#7 TurnerNation on 12.04.22 at 12:10 pm

Step outside, Snot Seasons is upon us. I’m sure that this weblog and the Blog Dogs desire only to stay inside and canoodle with their canines.

********************************
@ Shawn

And for god sakes get your flu shots and boosters. Don’t be selfish.

We really ought to be voluntarily wearing masks in retail stores. I must admit, I am not. (So, if you see me, stay back. Give me space.)
===============================

Hi Shawn,

It’s okay to be selfish. In fact getting an innoculation is something you do for yourself.

Kinda like house insurance or defensive driving… do you buy house insurance to protect the dipsh*t who slips on yur sidewalk or to protect yourself from said dipsh*t suing for your assests?
Do you engage defensive driving techniques to protect the jaywalker stepping out unexpectantly or to protect yourself from the hassle of hitting said jaywalker.

And finally, do you invest to have enough resources in your golden years so you won’t be a burden on society or…

Be selfish. Protect yourself!

Cheers, R

ftr, wife & I are C-19 innocculated + 2 boosters and still got it, she transmitted to me for extra effect :)

#28 millmech on 12.04.22 at 2:11 pm

What is your opinion on HCRE.TO in a non-registered portion of a portfolio.

#29 jess on 12.04.22 at 2:15 pm

seems like a no brainer untitled

https://www.cbc.ca/news/politics/stripping-honourable-title-unprecedented-1.6672900

#30 Just sayin' on 12.04.22 at 2:17 pm

No he isn’t. Pepe created a straw man for you to be mad at. Macklem did not create inflation and he was no different from every other central banker (and government) that did not see what a Ukraine invasion, $100 oil, insane consumer spending and supply chain meltdown would do to inflation. – Garth

————————————————————-
Wadr Garth, but your statement confirms what is being said on twtr, reddit and numerous other SM platforms. CB and our gov are clueless on how to properly run a country for the good of its citizenry as opposed to the same special interest groups, aka banks. The expansion of fiat money to purposely over-indebt its citizens just to keep the game going is beyond insane. Yet here we are and the fact that only a small percentage of the populace has benefitted with this crazy largesse than most other countries in the world that actually tried to do the same ended up in catastrophe. Reason why these woke libs are wanting to remove guns from so-far law abiding citizens.
Anyway, back to your comment – it simply proves how little concern the banking industry, with socialism support of tax payers, have with damage they are causing all for the sake of ‘inflate or die’ policies and ruining peoples chances. Makes me plan to emigrate very soon.

#31 Rent Your Way to Wealth on 12.04.22 at 2:27 pm

Do the math Peeps. No one got rich paying property taxes. strata fees, special levies, utilities etc. Find cheap rent that includes utilities and start investing all the cash you are saving every month. Home moanership is for losers.

#32 Blobby on 12.04.22 at 2:31 pm

I make $200k, wife makes 80k.. no way in hell I’d buy a house in Victoria… what’s the point in earning good money, only to throw it all at a house and not actually enjoy it?

We rent a small house for $2k a month instead.. and go on VERY nice vacations.

#33 Just sayin' on 12.04.22 at 2:32 pm

oh and to be clear – where I am really hoping to emigrate to is just a few provinces over. Watch, you will see this country split apart just like QC tried but just didn’t have enough support. This time WILL be different and Canada will forever be unrecognizable.

#34 Dolce Vita on 12.04.22 at 2:43 pm

They won’t listen Garth. They’ve already made their minds up.

And in a BC Strata no less. Read every Rule, Regulation and Minutes of Meeting since the building inception.

Served on more than 1 BC Strata Council, Pres, Treasurer, etc. – there are a lot of nutters that are on Councils is all I will say – let alone the Owners & their Tenants. Talking to the Strata Council will do no good.

Enjoy Aaron and Squeeze.

—————

OPEC+ maintaining their 2 Million bbl/day production cut (2% of daily World Consumption) so nothing has changed there despite all the MSM fear mongering.

Russia wants to retaliate against countries like Canada, USA, EU, Oz etc. that have agreed to the US $60/bbl oil price cap for oil transported by sea. Today:

Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
https://www.yahoo.com/now/russia-rejects-60-barrel-cap-144724387.html

“From this year, Europe will live without Russian oil.”

Cutting off your customers seems to me to be shooting oneself in the foot, then again, there is such a thing as a Crazy Ivan Maneuver so who knows what they will do?

—————

#3 Felix

There you go again, writing eloquently about today’s topic or sharing thoughts on topic.

My bad. That wasn’t you.

You dropped in on a Economic, Real Estate, Money … Blog and thought it was about CATS.

It isn’t. Find a Cat Blog and go there.

#35 Quintilian on 12.04.22 at 2:48 pm

The local realtors are worried.

If the local realtors are worried, that is as close to a confirmation as you can possibly get, that the speculators are about to get crushed like bugs.

And:

Buildings can no longer restrict rentals, as before, meaning more transient populations and an increased number of units open to investors and speculation. Typical brainless socialist diddling.

Crazy talk.

More units for rent, means renters face less competition. And with increasing carrying costs, and the prospect of the bubble popping, and with new builds coming on stream, speculators will be heading for the exits.

It will be a stampede, as many will wait too long.

As for the :“brainless socialists“, how do Pepe and Smith compare to Trudeau and Eby?

Strata corps are private entities, created and controlled by the people living there, owning as they see fit. This is government over-reach and another knifing of our phantom property rights. Some day you will get it. – Garth

#36 Warren-the-lagging_indicator on 12.04.22 at 2:49 pm

DELETED (Crazy anti-vaccine conspiracy person)

#37 Flop… on 12.04.22 at 3:02 pm

103 VicPaul on 12.03.22 at 9:42 pm

I’m thinking of taking the sindaco up on his offer – he’ll give me 30K and a house. I’ll live there for a couple of years and then retire to my spectacular homeland, Croatia – and use the Italian place as an Airbnb.

Dolce, can you confirm the few cities that are giving away residential antiquities?

M58BC

/////////////////////////
Hey Uncle Vic, Dolce can’t answer you right now because his eyes are still burning from watching Australia play a round of 16 match at the World Cup.

The latest one I saw was Presicce, in Southern Italy, it’s been slowly dying, merged with a nearby town, and drew up a plan to revitalize the area.

30k, they give you to move there, like all of these programs there’s rules to adhere to.

I put up a post probably last year that showed some of the ones in Sicily for £1.

I had a look at this town, like most of the ones offering these types of deals they mainly consist of small villages and towns inland away from the coast.

I’ve seen stories where people have given them back because when they bought the contractor in it wasn’t worth the hassle.

Apparently it’s not always that easy to get the people to travel to do the work, so if I was going to take the leap I would rather pay a little more to get one structurally sound that mainly needs some TLC and copious amounts of elbow grease.

Or as they say in Italy as they are about to mow you down on the train platform with the baggage cart…

Attenzione, Attenzione…

M48BC

https://www.cnn.com/travel/article/presicce-italy-pay-to-move/index.html

https://www.smithsonianmag.com/smart-news/presicce-italy-will-pay-you-30000-to-move-there-180981225/

#38 cuke and tomato picker on 12.04.22 at 3:06 pm

Stay away from a strata the are usually run by a family compact to meet the needs of the family compact.

#39 Dr V on 12.04.22 at 3:14 pm

10 Flop – interesting listing

Some FYIs:

This area is separated from the ROD (rest of Duncan)
by Hwy 1 on the west, and the Cowichan IR to the North, East and South. To get to the main part of town, you either have to travel down the highway, or thru the IR, or combination of the two.

You are also in an active flood plain, as is almost all of the immediate area. In last years atmospheric river, I believe the highway adjacent was under several inches
of water for a brief while.

As the foundation work looks new, the bottom of the floor joists should be set at or above the required flood level. Looks like a sump in the basement, which should remain “uninhabited” (hence the nice shop) due to flood concerns.

I see a heat pump but cannot follow the duct work to any air handler or furnace, and could not see one in any of the photos. It too should be located above the flood level. Same for the electrical panel on the wall in the
basement.

Check GE streetview for shots from the neighbouring street in 2009 and Eleanor in 2014. Dwelling smacks of a deregistered mobile.

#40 Elon fanboy on 12.04.22 at 3:25 pm

#1 Robert S… DELETED (Anti-vaccine)

Dude go get a hobby or something.

————-

Don’t think I could ever be persuaded to buy a condo. Heard to many nightmare stories about overbearing strata boards, not too mention the ongoing costs you have no control over, ie. strata fees and special assessments.

#41 Dave on 12.04.22 at 3:37 pm

Living in downtown Victoria? Get some bearspray …

#42 Ambi and Vasu on 12.04.22 at 3:50 pm

Garth: Speaking of agents, you need a person to represent you. The cost is zero.

We thought the “buyers agent” costs 2.5% of the paid value of the house, which works to CAD 25,000 for a million dollar house…… Higher the value of the house, higher the commission!!!!!!

The cost is not ZERO. Unfortunately, it is invisible!!!!!!

Seller pays the commission. – Garth

#43 Timmy on 12.04.22 at 3:52 pm

Re Alberta Ed

Someone from AB is complaining about weather in BC? lol I’d never suffer through another AB winter.

#44 Sail Away on 12.04.22 at 3:56 pm

#28 millmech on 12.04.22 at 2:11 pm

What is your opinion on HCRE.TO in a non-registered portion of a portfolio.

—————

Hmmm… this wouldn’t meet any of my metrics (longevity, market cap, yield, history of success). What do you know of it?

#45 Hmm on 12.04.22 at 4:10 pm

@#27 Russ on 12.04.22 at 2:08 pm
Shawn on 12.04.22 at 1:36 pm

Snot and Virus season

#7 TurnerNation on 12.04.22 at 12:10 pm

Step outside, Snot Seasons is upon us. I’m sure that this weblog and the Blog Dogs desire only to stay inside and canoodle with their canines.

********************************
@ Shawn

And for god sakes get your flu shots and boosters. Don’t be selfish.

We really ought to be voluntarily wearing masks in retail stores. I must admit, I am not. (So, if you see me, stay back. Give me space.)
===============================

Hi Shawn,

It’s okay to be selfish. In fact getting an innoculation is something you do for yourself.

Kinda like house insurance or defensive driving… do you buy house insurance to protect the dipsh*t who slips on yur sidewalk or to protect yourself from said dipsh*t suing for your assests?
Do you engage defensive driving techniques to protect the jaywalker stepping out unexpectantly or to protect yourself from the hassle of hitting said jaywalker.

And finally, do you invest to have enough resources in your golden years so you won’t be a burden on society or…

Be selfish. Protect yourself!

Cheers, R

ftr, wife & I are C-19 innocculated + 2 boosters and still got it, she transmitted to me for extra effect :)

way to be ignorant there Russ.

#46 Hmm on 12.04.22 at 4:18 pm

@#33 Just sayin’ on 12.04.22 at 2:32 pm
oh and to be clear – where I am really hoping to emigrate to is just a few provinces over. Watch, you will see this country split apart just like QC tried but just didn’t have enough support. This time WILL be different and Canada will forever be unrecognizable.

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

lol, sure buddy.

#47 Ponzius Pilatus on 12.04.22 at 4:24 pm

Darma Bum (from yesterday)

Retirement is great.
For me, anyway.
I am a lazy bum.
I’m 5 years into retirement (I retired as soon as I could), so I’m still in that initial “vacation” stage – multiple trips, no set schedule, lots of sleep ins, do what I want, when I want, etc., etc.
Loving it.
We started saving and systematically investing every single month for around 35 years.
Eventually, through the magic of compounding, I had enough EFFYOO money to tell the boss EFFYOO.
And voila – here I am – full time bum!
Hiking, riding, skiing, walking, roadtripping, barbecuing, smoking (the cooking kind), building, hobbying, reading, podcast listening, movie watching, puttering, working out, listening to music, photography, visiting the kids in their respective cities, helping, volunteering, side hustling, and drinking late morning coffee.
By the way, with the right systematic saving and investment plan, you don’t have to make any serious sacrifices throughout your working life. I always took vacations, had a boat, raised 3 kids, bought a house, and enjoyed all non-work related activities.
Now, it’s all fun, all the time.
Plus, the divvies keep on divvying.
Gotta love it.
Now, time for a nap.
——–
Congratulations.
You carved out the perfect retirement plan.
If Superman would ever retire, he’d probably copy your plan.
Unfortunately, perfection is an illusive concept.
So,please forgive me if I’m a little bit skeptical.
It kinda sounds like Sailo’s fairy tale existence.
Where everyone always lives happily after.

#48 Flop… on 12.04.22 at 5:18 pm

#39 Dr V on 12.04.22 at 3:14 pm
10 Flop – interesting listing
Some FYIs:
This area is separated from the ROD (rest of Duncan)
by Hwy 1 on the west, and the Cowichan IR to the North, East and South. To get to the main part of town, you either have to travel down the highway, or thru the IR, or combination of the two.
You are also in an active flood plain, as is almost all of the immediate area. In last years atmospheric river, I believe the highway adjacent was under several inches
of water for a brief while.
As the foundation work looks new, the bottom of the floor joists should be set at or above the required flood level. Looks like a sump in the basement, which should remain “uninhabited” (hence the nice shop) due to flood concerns.
I see a heat pump but cannot follow the duct work to any air handler or furnace, and could not see one in any of the photos. It too should be located above the flood level. Same for the electrical panel on the wall in the
basement.
Check GE streetview for shots from the neighbouring street in 2009 and Eleanor in 2014. Dwelling smacks of a deregistered mobile.

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

Hey Doc, the vacant block a couple of doors down has lots of aerial shots to show the lay of the land.

I see the Brunswick Green roof of the previous one, and the highway looming in the background.

At the end of the day, they’re going do what they’re gonna do, but as some other posters have pointed out their wish list doesn’t necessarily scream downtown Victoria, so I’d just thought I chuck a curveball over the plate.

Strike one…

M48BC

https://www.zealty.ca/mls-914729/5204-ELEANOR-ST-Duncan-BC/

#49 chalkie on 12.04.22 at 5:28 pm

Well said Garth, going into real estate with 5% down is like playing Russian Roulette, the outcome is a very unpredictable outcome, quite often with dire consequences.

I put a lot of the blame on governments with their ridiculous rules of allowing a minimum 5% down payment, for such a little amount of equity, most often this amount can be borrowed or little donations from mom and dad to help tally out the down stroke, (Quietly it must be paid back,) do yourself a favor and do not allow yourself to be caught up into these types of failing scenarios.

Most often, if not always, the 5% buyers are among the novice group with little to no understanding of what they are stepping into.
Ownership is important, but not important enough to be going out on a limb to get property into your own name that will suck up every dollar that you have saved and put your family into a predicament of heartache for many years ahead of you.

Real estate agents have no responsibility, no skin in your game and little remorse should you suddenly find yourself in trouble, they get the sale and move on to the next deal.

Currently Canada is at a stage of trying to understand if the Bank of Canada can ease off on the gas pedal to just rise a ¼ % next week or shoot for the ½ % and then another ¼ %. The danger side is, tipping the economy into a recession when going too fast, also considering raising rates too slowly can cause longer pain as we spread these hikes right out into the summer of 2023.

The math on the economy is to slow the economy enought to get inflation under control, the question is, can we do this without overshooting and driving the economy into a recession. We are now at the sensitive stage of what is right or wrong as we try and fix the mess we are in, as you would know, there is no silver lining on government decisions nor is there a genie in the bottle for best decision.
If we overshoot, homeowners wanting to buy or sell, will not be in a good spot.
The three strikes you’re out rule is if demand weakens too much, consumption collapses and prices drop too much.
My present guidance to my own family members right now, is to hold off until we see the light of day, it’s still a dark day for any real estate decisions, put a lot of thought into what you are doing. Better to lose a little on the way up than lose a lot on the way down, we will know when the time is close to the make best decision moves.
I can only tell you, what I feel is best, keep your real estate money for now, there are much better deals ahead in late 2023 and 2024.

Quote of the day: When things don’t feel right, most likely they are not, patience is virtue.

#50 Sail Away on 12.04.22 at 5:53 pm

#47 Ponzius Pilatus on 12.04.22 at 4:24 pm

So,please forgive me if I’m a little bit skeptical.
It kinda sounds like Sailo’s fairy tale existence.
Where everyone always lives happily after.

—————

The key, my friend, is to embrace the hard, even soul-crushing, experiences in life, since these give perspective. Complete impossible tasks and the hard ones aren’t so hard. Give thanks, and far greater weight, to the good things in life. Cut off a finger? Meh. You’ve got nine more. Your daughter gets her dream job? It’s party time.

#51 crowdedelevatorfartz on 12.04.22 at 5:59 pm

@Dharma Derriere
re Pouting Ponzie
“So, please forgive me if I’m a little bit skeptical.”

+++
You’ll have to ignore the grump.
He questions everything.
Especially someone else’s good fortune.

#52 VladTor on 12.04.22 at 6:02 pm

Garth,
Your analysis of the cost of owning home is interesting, but it’s only one side of the coin.

The other side of the coin – you need to reconsider the cost of renting apartment.

Let’s say I invest down payment at 6% and stile live in rent and I get all the profit for the year from investments.

This gives me 800 bucks a month and now my real rent is not 2200 but only 1400. Cool!

Even when moving into a 4000 apartment, I pay 3200. This is a simple option where I do not consider reinvesting all profits in the initial amount, but even
this simplified analysis says a lot.

Second. I laughed at this:
…. Victoria BC, where we’d like to relocate in order to start a family….

And why do you need to relocate in order to start a family. Is it impossible without relocation ????

And third, they want to get a dog, so you need to consider the cost of owning a dog. With the right size of the dog – this dog will eat a day like Aaron.

#53 kommykim on 12.04.22 at 6:24 pm

RE: #9 the Jaguar on 12.04.22 at 12:22 pm
Do they still have homeless encampments in downtown Victoria?

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

I live about 20 minutes from downtown. Homelessness is worse than it has ever been. Probably because the city of Victoria basically laid out the welcome mat for them. Not sure why the tourists keep coming…

#54 VicPaul on 12.04.22 at 7:21 pm

#37 Flop… on 12.04.22 at 3:02 pm
103 VicPaul on 12.03.22 at 9:42 pm

I’m thinking of taking the sindaco up on his offer – he’ll give me 30K and a house. I’ll live there for a couple of years and then retire to my spectacular homeland, Croatia – and use the Italian place as an Airbnb.

Dolce, can you confirm the few cities that are giving away residential antiquities?

M58BC

/////////////////////////
Hey Uncle Vic, Dolce can’t answer you right now because his eyes are still burning from watching Australia play a round of 16 match at the World Cup…

I would rather pay a little more to get one structurally sound that mainly needs some TLC and copious amounts of elbow grease.

Or as they say in Italy as they are about to mow you down on the train platform with the baggage cart…

Attenzione, Attenzione…

M48BC

https://www.cnn.com/travel/article/presicce-italy-pay-to-move/index.html

https://www.smithsonianmag.com/smart-news/presicce-italy-will-pay-you-30000-to-move-there-180981225/

*********

Thanks Flop – you are a bit of a bloodhound for real estate details …Mr. Pink Snow.
Hope the ankle feels ok in the cold temps!

M58BC

#55 Reality Check on 12.04.22 at 7:24 pm

Aaron – do you mean right downtown? If so, have you spent much time in downtown Victoria lately. Our once charming little city centre has become a pretty tough place. Especially at nights. Last place in Victoria I wound live. Your wife won’t be taking the dog for a walk by herself in the evening.

#56 Damifino on 12.04.22 at 7:37 pm

#9 the Jaguar

Do they still have homeless encampments in downtown Victoria?
———————————-

You bet.

But, if you steer clear of Pandora Street you probably wouldn’t notice it too much.

#57 Ponzius Pilatus on 12.04.22 at 7:42 pm

#7 TN

https://www.euronews.com/green/2022/12/02/is-france-banning-private-jets-everything-we-know-from-a-week-of-green-transport-proposals
It’s official: France bans short haul domestic flights in favour of train travel
————–
Only the beginning.
Germany next.
And then the World.
Oops.
North America has no bullet trains.

#58 45north on 12.04.22 at 7:48 pm

Make the offer as clean as possible – get pre-approved for financing, research the building and dispense with a inspection (however you need to visit and view the unit yourself, carefully). But you need a status certificate on the strata, to ensure good finances and decent reserve fund. Plus bylaws you can live with. Also worry about the effect of Comrade Premier Eby’s changes to the very nature of condo living. Buildings can no longer restrict rentals, as before, meaning more transient populations and an increased number of units open to investors and speculation. Typical brainless socialist diddling.

if Comrade Premier Eby can arbitrarily change the nature of condo living, then what are you buying?

#59 Alex Mashinsky on 12.04.22 at 7:49 pm

Seller does pay the outrageous commission for these realtors to live like ballers. Everyone in the game wants this Aaron guy to go through with stuff like this because this is how the sales people make the money.

Rule #1 be wary of who you are asking questions. Figure it out yourself.

Buying this condo would be an absolute mistake. Why? You can rent the same thing in Victoria for less. That condo you are buying rents for 2250 per month. A house rental in Victoria will cost you the same as the financials on buying the condo.

While renting, you can switch it up as much as you want. You can even break a lease if you are not feeling a place and most likely not even be held to it. The landlord can try and hold you to it but they also have to mitigate losses, which means filling the place with someone else once you are gone. So, even if they dragged you to court you might owe 2 months rent. Big deal. Most of the time you can sign a mutual agreement with landlord and move whenever. Make sure to study who the landlord is before signing.

Rent for a few years in Victoria. You might not even like the area. If prices drop below the rental costs of what your ideal place is that you are renting, then jump in at such time. They are nowhere near that right now. If they never reach an affordable level, forever rent or move somewhere more affordable.

I have lived in Vancouver and Victoria. It is not worth it. The cost of the old mouldy buildings is outrageous and if you want something flashy be prepared to afford 2m+.

I bought my homes in Vancouver and Victoria for under 500k and they are still the same crap that are not worth 500k, let alone 2M.

I cashed out and live a minimalist lifestyle renting 6 months over the summer in Victoria and 6 month in Grand Cayman over the winter. Coming back to Canada is the worst part of each year. Housing ownership costs and upkeep for me is a thing of the past. People need to wakeup.

#60 Grunt on 12.04.22 at 7:59 pm

Unrelated to Aaron & Co. Techs pushing hard to reach AGI without all the social checks & balances. The people writing the Blackbox algorithms don’t even understand what’s happening.

Quantum computer Q-bit hardware is slowly getting there. A promising complex, costly physics nightmare.

#61 Ponzius Pilatus on 12.04.22 at 8:02 pm

#52 crowdedelevatorfartz on 12.04.22 at 5:59 pm
@Dharma Derriere
re Pouting Ponzie
“So, please forgive me if I’m a little bit skeptical.”

+++
You’ll have to ignore the grump.
He questions everything.
Especially someone else’s good fortune.
—————
Funny,
I intended on including you with Sailo.
As people who are constantly bragging about how well they are doing financially.
While showing absolutely no regard for people who for a variety of reasons are less fortunate.
People who elevate themselves by lowering other people, disgust me.
Plain and simple.

#62 45north on 12.04.22 at 8:04 pm

the Jaguar Wanting to relocate from where? As an “entrepreneur” with “a business with promise” does your business move with you fully intact and with the same promise? WFH may fade away like a daisy in the desert when the world gets back in full swing. We’re not quite there yet. Be prepared to have the right responses to those questions when you wash up on the beach where you will seek financing.

Aaron and his wife are fooling themselves. They would like to live in Victoria and have convinced themselves that they can live there without penalty. Which would be true if he worked for the BC Government. Stable employment, opportunity for advancement. Travel paid by the employer. They need to give their heads a shake.

#63 Hazzi knows best on 12.04.22 at 8:08 pm

Victoria and all of BC is full of homeless encampments. A dirty little secret about BC – one of many dirty little secrets out West.

The high prices and homelessness go hand in hand.

The $3500 – $4000 range, the chances of finding a place that won’t discriminate against dogs and children is low??? You sure about that Aaron?

Come to Kelowna. You can rent a newer house in some of the best neighbourhoods (that are not surrounded by homeless encampments) for $3,500 and the landlord (who are basically all realtors) are so desperate right now that they will allow lots of kids, farm animals, heck, even exotic zoo animals on and in the property.

Most are advertising first month free because the property managers are trying to land people. With places not selling the realtors are pulling their listings and putting them into the rental pool en masse right now.

Perfect time to be a renter.

#64 Ponzius Pilatus on 12.04.22 at 8:09 pm

#54 kommykim on 12.04.22 at 6:24 pm
RE: #9 the Jaguar on 12.04.22 at 12:22 pm
Do they still have homeless encampments in downtown Victoria?

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

I live about 20 minutes from downtown. Homelessness is worse than it has ever been. Probably because the city of Victoria basically laid out the welcome mat for them. Not sure why the tourists keep coming…
——————
Because homeless people are not a Victorian specialty.
Many tourist destination around the world have homelessness.
Many are much worse.
And many of the homeless in Victoria and Vancouver come from Alberta.
Shame on the Alberta Government for not looking after them.

#65 THE DANDADA on 12.04.22 at 8:21 pm

5 dollar HEAD of LETTUCE!!

Just keep it.

#66 WHo is on first? on 12.04.22 at 8:22 pm

Just because you run a company and have money does not mean you are smart.

Alan holds an MBA, has worked in technology and finance for over 25 years and is CEO of a mobile software company that trades on the Nasdaq.

That didn’t prevent him from getting duped by a crypto firm.

Alan borrowed $375,000 from crypto lender Celsius over several years and posted $1.5 million in bitcoin as collateral. He didn’t want to sell his bitcoin because he liked it as an investment and believed the price would go up.

Alan thought he would get the bitcoin back when he repaid the loan and even has a contract for this.
But that’s not what happened, because Celsius, which earlier in the year managed $12 billion in assets, spiraled into bankruptcy and longer has any money.

Surprise!

David Adler, a bankruptcy lawyer at McCarter & English is now representing a group of 75 borrowers who had approximately $100 million in digital assets on Celsius’ platform.

Another Netflix documentary?

#67 Ambi and Vasu on 12.04.22 at 8:27 pm

Seller pays the commission. – Garth

And that is what everybody tells everyone else.

Sorry Garth, we understand the money comes off the pockets of the buyer. Which is then split between the owner, selling broker and buying agent. No sale, no commission!!!!!!

Higher the selling price, higher the commission!!!!!!

At the end of the day, there is no one for the poor buyer!!!!!

Seller pays the commission is a huge spin (we think)!!!!!!!

#68 Bdog on 12.04.22 at 8:39 pm

Women’s irrational emotions are a huge contributor to the elevated cost of real estate.

#69 Pulp Faction on 12.04.22 at 8:52 pm

Buy the SFH, not the strata !!!
You don’t even know how much you can hate life with idiot renters living next door and for what it will cost you, you’re better off ponying up for a house. Strata fees only go up and you can’t even mow your grass without their written approval. Research all the strata horror stories.
Save your pennies and wait to vultch on a house. Prices are beyond anybody’s reach, the party will end, the pressure will rise, there’s no plethora of 6 figure salaries coming down the pipes to support the bloated market, and we’re only in the “dip your toes in the water” stage of interest rate normalization. Wait until the full onset of it comes to bear, people are going to topple and with already high ownership rates, there will be no mass group of qualified buyers to draw on. Life happens, circumstances change, people are already mortgage poor and they will have to endure higher payments and tight times for years, not days.
Living like that gets tedious and it’s hard on relationships. They’re barely hanging on now, wait until they have a long term taste of it.
They’re all playing it like it’s short term and things will go back to the way they were before, soon enough. Neither of those is true.
The writers of this blog have to be guarded in what they say, they can’t be seen as harbingers of doom or triggers.
I can speak freely and I do.
This is going to be another big transfer of wealth and it’s going to have magnitude.
Wait for the fire sales. People are going to get desperate, people are going to need out, and banks/financiers are going to need non-producing mortgages and their associated properties off their books.
Prices are not going to inflate any more so you have nothing to lose by waiting to see where the chips fall. Besides, Garth is right… you’re much better off having saved up cash throwing off an income and reinvesting it, than to throw it all into the biggest gamble of your life. Buy when it’s an easy no-brainer, not when it’s a craps shoot. If you have to sweat about it, it’s not the right move.
People are going to find themselves trapped in illiquid properties that have less value than their liabilities on them and 40 year ams that have them forking over every last cent of their earnings for their entire working lives, just for shelter. Some of them will find themselves forking over inheritance and paying into retirement. Nobody likes to live like that and it gets really dry sooner than later. The effects of the Kool-Aid will wear off and we will enter the age of sober second thought. It used to be the foregone conclusion that you would negotiate the purchase price and the interest rate for a much better deal. Wait until those days return, because they will. They can’t not.
Until then, build your wealth and be glad it’s not you who got all excited and pulled the trigger at a bad time. If you’re excited, it’s a bad decision. Make a deal when your thinking is more like, I wonder if I can get the price knocked down even more…or I wonder if I can find another seller who is even more pressured and can be beaten down even more ?
We bought when we found a satisfactory property from vendors under pressure from several fronts and I negotiated very aggressively for over a week to beat them into the ground. They didn’t give up as much as I tried for, but then I knew I had my deal.
They literally couldn’t give up one more inch.
To this day I could pay my mortgage off a part time job. Best financial decision I ever made in my life, at a time when we were pre-approved for 3x what we bought for and our friends were purchasing at the highest amount they could get approved for (the same as what our pre-approval was) and years later tanked under the high pressure of servicing their big debt for their “executive-style homes”. They never did own those homes, only borrowed them for a few years.
I have trees and hedges as tall as you like that I planted myself from the nursery when we first took possession. Longevity is the name of the game, plan to be able to stay in it for the long haul.
The game of musical chairs is over, the BoC turned off the music, and nobody is coming along with sacks of cash to save you from your bad financial decisions. Lotto-house is over. Keep a big chunk of cash invested like it was a bulletproof vest. Be able to survive anything. Now you’re living.

#70 Ponzius Pilatus on 12.04.22 at 8:52 pm

#61 Grunt on 12.04.22 at 7:59 pm
Unrelated to Aaron & Co. Techs pushing hard to reach AGI without all the social checks & balances. The people writing the Blackbox algorithms don’t even understand what’s happening.
————–
Of course, they don’t.
Beware of the sentence:
“I’m a Techie (technocrat).
And I’m here to help you”.

#71 the Jaguar on 12.04.22 at 8:53 pm

Slow comment section today. Must be the NFL and that other form of ‘football’. Here’s an evening snippet, especially for those who might be travelling over the holidays…………

PEEP ALERT! Fill up your tanks, peeps. Trickle down economics about to wash up on your beach. Sail Away, go give your Tesla un abrazo.
‘The Group of Seven—a coalition of wealthy countries—plans to cap the price of Russian oil at $60 per barrel. In an effort to mitigate the negative effects of this price cap, Russian officials said Sunday Moscow would not sell oil to countries that impose the limits.’
Following its meeting Sunday, OPEC+ announced it would hold current oil production projections, citing uncertainty as the European Union prepares to ban many Russian oil imports and several countries plan to cap the price of Russian oil, two measures that are set to take effect Monday as punishment for Russia’s invasion of Ukra
The Wall Street Journal reported Sunday that ahead of OPEC+’s decision, American officials indicated they didn’t plan on criticizing the bloc if it chose to leave its production cuts in place, a stark change from October, when the White House denounced the move as “shortsighted.” ( Despite: “Biden Pledges ‘Consequences’ For Saudi Arabia Over Oil Production Cuts! (Oct 11, 2022)
Alberta 134.8, BC 162.3, Ontario 143.4, PQ 157.2 ( Everybody else can go to GasBuddy).

#72 crowdedelevatorfartz on 12.04.22 at 9:25 pm

@#62 Ponzies petulant pugnacious paradigm
“People who elevate themselves by lowering other people, disgust me.”

+++
So I guess rich elevator repairman are at the top( or bottom) of your Christmas list?

#73 crowdedelevatorfartz on 12.04.22 at 9:28 pm

@#65 Ponzies Provincial patronization.

” And many of the homeless in Victoria and Vancouver come from Alberta.”

++++
Im just curious.
Do you actually read what you write?

#74 Ponzius Pilatus on 12.04.22 at 9:37 pm

#70 Pulp Fiction
Your post is longer than the movie.
Get yourself an editor.

#75 crowdedelevatorfartz on 12.04.22 at 9:40 pm

@#69 BDog
“Women’s irrational emotions are a huge contributor to the elevated cost of real estate.”

++++

O….M…G
Smithers,
“Unleash the hounds”

#76 Ponzius Pilatus on 12.04.22 at 9:47 pm

#73 crowdedelevatorfartz on 12.04.22 at 9:25 pm
@#62 Ponzies petulant pugnacious paradigm
“People who elevate themselves by lowering other people, disgust me.”

+++
So I guess rich elevator repairman are at the top( or bottom) of your Christmas list?
——————————
Talking about Christmas:
Are you gonna make your annual x-mas walk again.
Throwing Pennies at beggars on Robison and Granville.
Just a reminder,
Pennies are no longer accepted.
So essentially, you’re giving nothing.
But it’s the thought that counts, right.
Thanks for Nothing.
—————
Sorry Garth.
Last one.

#77 Faron on 12.04.22 at 9:58 pm

#61 Grunt on 12.04.22 at 7:59 pm
Unrelated to Aaron & Co. Techs pushing hard to reach AGI without all the social checks & balances. The people writing the Blackbox algorithms don’t even understand what’s happening.

Quantum computer Q-bit hardware is slowly getting there. A promising complex, costly physics nightmare

Looking fwd to playing Q-bert on a quantum computer.

Also, quantum computing will break today’s cryptography that allows the internet to function. The race to implement quantum computer robust web security is hot.

https://www.nist.gov/news-events/news/2022/07/nist-announces-first-four-quantum-resistant-cryptographic-algorithms

Most in steerage demonstrate a severe, cringeworthy lack of understanding of physics. :-/

#78 Quintilian on 12.04.22 at 10:08 pm

So, Aaron, why would you Hoover your RRSPs and TFSAs, take on over six hundred thousand in debt and increase your living costs by 60% to buy an apartment in an inflated market where condo units are sitting unsold and in over supply? Huh?

Aaron, although Garth says some crazy stuff sometimes, but most of the time he is of sound judgement. Don’t buy.

Stash the cash in private equity, and some to expand your business.
(this has worked for me)

The downturn in the RE market, especially on the island will turn into a serious bust when the rates really do their magic in another year or so.

#79 Victor Llearna on 12.04.22 at 10:26 pm

All the issues in this country can be traced back to our useless incompetent government meddling where the don’t belong.
Healthcare and housing are 2 things among many that the goverment have permanently messed up in Canada

#80 Rusty Bedsprings on 12.04.22 at 10:28 pm

The problem with the cookie cutter , 4 stages of retirement recipes like yesterday is that they are all depressing and often reassemble the 5 stages of grief, with acceptance being the holy grail at the end of the tunnel. We all gonna die so better to focus on health, happiness, and quality…become ur own here and now lifestyle Zen master once u have enough loot to escape the corporate slave farm.
Live life to the fullest and remember what that great Cdn philosopher said, “it’s better to burn out than it is to rust”

#81 Reynolds753 on 12.04.22 at 10:52 pm

For those of us not in the loop please explain “strata fees”. I split my time between Colorado and Ontario. I have a small condominium in Toronto and I do pay a monthly maintenance fee. How is this different? There is an elected board of directors that are owners and they seem to be doing a good job of things.

#82 the Jaguar on 12.04.22 at 10:55 pm

#65 Ponzius Pilatus on 12.04.22 at 8:09 pm
——————
Because homeless people are not a Victorian specialty.
Many tourist destination around the world have homelessness.
Many are much worse.
And many of the homeless in Victoria and Vancouver come from Alberta.
Shame on the Alberta Government for not looking after them.++++
____________________
Go ahead and back up that statement. Or did you just pull it out of your ass as usual?

You might want to start with your provinces homeless count, link below and Table 2.20

https://www.bchousing.org/publications/2020-21-BC-Homeless-Counts.pdf

Table 2.20: Where Lived Before Community –

Previous years show essentially the same data. If you weren’t so incredibly ignorant and mean spirited you would know Alberta has some first class homeless shelters. Every province has some version of this problem, BC perhaps more due to a warmer climate. Drugs and the measures taken up against that problem might also be a factor.

Alberta has a very young population and here is another stat for you:

‘Over the past five decades, Alberta has had the highest net increase from interprovincial migration of any province”. Thank dog it didn’t include an arsehole named Ponzius Pilatus.

#83 Ponzi.com on 12.04.22 at 10:57 pm

#67 who dat on 2nd?

Jamie Dimon should be lead actor for the Netflix Doc, he did call it!

#84 Nelson on 12.04.22 at 11:16 pm

Why? Well as Aaron said, finding a rental in Victoria that will accommodate kids and pets is a formidable challenge.

There is a substantial -understated on this blog- benefit to ownership and calling the shots on your own property. Far less so on a condo or strata…Buy a house Aaron. Drive your Tesla in from Langford like the rest of them. With 250K combined income though you don’t even need to endure the commute. If Victoria is where you want to be for the long haul, and you can find a nice little plot that will accommodate the way you want to live your life: There are deals now and will be better deals in the next 1-2 years.

Then: another crisis, predictable or not – black swan or debt crisis as interest rates rise/stay elevated – markets tumble, briefly due to – interest rate plunge – QE to infinity and beyond to bail out those with the equities and preserve their riches – your mortgage payment drops and your house price skyrockets along with your stocks. It’s the way the economy works now.

#85 Don Guillermo on 12.05.22 at 12:18 am

@#65 Ponzies Provincial patronization.

” And many of the homeless in Victoria and Vancouver come from Alberta
########
Hahaha, “Poor Alberta, so far from god, so close to BC. ”

We could never be as righteous as you Surrey folks.

Sorry Jag, I had to steal that from our Mexican friends.

#86 DON on 12.05.22 at 12:54 am

#75 Ponzius Pilatus on 12.04.22 at 9:37 pm
#70 Pulp Fiction
Your post is longer than the movie.
Get yourself an editor.

********
It has to be long, to explain the nuances and context. Most people think short term happy path and rely on hopism rather than the reality that life experience provides. Risk management seems to have been forgotten by individuals and institutions in the last 15 years of free money.

#87 jane24 on 12.05.22 at 1:27 am

I think it is tragic that Canada is the only western country where an average younger person with an average wage of $55,000 so $110,000 per couple cannot buy a basic home. A permanent home in life gives you and your children security and an opportunity to build friendships, a garden to hone and a walls to decorate your way. I am surprised that Canadians accept this and are not rioting in the streets. Tragic.

After 30 years in the UK we are looking for a retirement place. We checked out Porto in Northern Portugal 2 weeks ago. Fab. Ticks all the boxes with their D7 retirement scheme and great cheap functioning health care. 10% tax on Canadian pensions. No tax on investments, dividend, rental income etc.

In April we are off to see the competition – Sardinia, Italy. With their retirement visa it is 7% tax on everything and if you buy in a town of 20,000 or less, Sardinia pays you for coming even if you are buying a posh villa. 2% land transfer tax too.

We have eliminated the Maltese and Cypriot retirement programs for you guys as small islands are a bit limiting and Greek Cyrus feels like the moon- just rocks and beach. France and Spain have wonderful cheap villas with pools but no special tax deals for pensioners coming from away as are. Taxes there are on par with Canada and the UK.

All of these options have incredible functioning health care systems and very cheap health insurance packages.

#88 jane24 on 12.05.22 at 1:51 am

Back to yesterday’s topic. You do not need 2 million bucks to retire. Just lower your out-goings and you can live very happily on less. It is not what you have but what you spend and in retirement you will find that you don’t spend as much. I retired 9 years ago but I haven’t touched my retirement savings yet as our state pensions plus 2 part private pensions are enough with a paid for house and no debts to service.

Re dementia, it runs in my family so I know I’ll go down that route. In our village in Italy the coping mechanism is to leave the old person in their familiar home and hire a Romanian or Albanian helper who lives with them until they go. Family are there often as well to spell the helper. Costs are low and everyone is happy.

#89 Faron on 12.05.22 at 2:18 am

Whoops, the US VA has been discriminatory in how it administers benefits. Given the heavily minority nature of the US military, this would seem to be a problem.

https://www.washingtonpost.com/national-security/2022/11/28/veterans-affairs-lawsuit-racial-discrimination/

#90 SoggyShorts on 12.05.22 at 5:04 am

#2 Shawn on 12.04.22 at 11:41 am

ALWAYS remember that a big percent (30 to 50%) of the dollars in “your” RRSP are pre-tax dollars that will in most cases go back to the government.

*************************
That seems high.
My wife and I could each take out 30K and pay an average rate of 15%, not “30 to 50%”

And 60k/y is us traveling almost constantly.
40K (8.5% taxes) is what we were spending while we worked, and over what we’ll spend once settled for a bit.

#91 the Jaguar on 12.05.22 at 6:55 am

@#86 Don Guillermo on 12.05.22 at 12:18 am–

Good one. It kind of fits, and I am sure Porfirio Diaz wouldn’t object to the small alteration in location, lol.

#92 maxx on 12.05.22 at 7:03 am

Aaron, listen to #4.

When it comes to RE, the days of being nicey, nicey to realtards or caring what owners think are over.

#93 NoName on 12.05.22 at 7:10 am

#78 Faron on 12.04.22 at 9:58 pm

Most in steerage demonstrate a severe, cringeworthy lack of understanding of physics. :-/

she seams to grasp physics bit better and many, pay attention around min 15.

https://youtu.be/CBLVtCYHVO8

#94 Gravy Train on 12.05.22 at 8:21 am

#89 jane24 on 12.05.22 at 1:51 am

[…] Re dementia, it runs in my family so I know I’ll go down that route.[…]

You can avoid dementia entirely if you read and follow Dr. Antoine Hakim’s (2017) book Save Your Mind: Seven Rules to Avoid Dementia. You may have to make a few lifestyle changes to follow each and every one of these seven rules, but the benefits far outweigh the costs. The book is available at your local library.

Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.
—Dylan Thomas (1914-1953)

#95 crowdedelevatorfartz on 12.05.22 at 8:22 am

@#77 Ponzies Pedestrian Playbook
“Throwing Pennies at beggars on Robison and Granville.”
++++
Nah.
Copper is over $2/lb
Most of the kids begging on Robson (with their obligatory stolen pets) are usually dressed better than me.
And with the unemployment numbers are record lows….
No excuse why they can’t be working.
They are born here, speak the language and read.
They already have a huge advantage on most people that immigrate and yet they….beg.
Because its easy? Because they’re lazy?
Who knows. Who cares.
Tons of work out there.
“Help Wanted” signs everywhere.
Unlike the early 1980’s when I was their age.
I work very hard for my after tax dollars.
Let the Liberals and the NDP socialist utopians shovel good money after bad.
Eventually the govt money will run out.
When voters refuse to re-elect tax squandering deficit monkeys.
I’m just curious.
Are there beggars in Vienna?
Or do the police arrest them immediately?

#96 Sail Away on 12.05.22 at 8:29 am

#90 Faron on 12.05.22 at 2:18 am

Whoops, the US VA has been discriminatory in how it administers benefits. Given the heavily minority nature of the US military, this would seem to be a problem.

—————

Intellectually dishonest statement, and you know it.

Stop mischaracterizing for fighting fuel.

#97 crowdedelevatorfartz on 12.05.22 at 8:31 am

@#90 Faron
Another “systemic racism” lawsuit by outraged rich Yale University law students….
Yawn.
It must be Monday.
The cynic in me might wonder if some of these law students are using this politically correct lawsuit as an excellent Curriculum Vitae footnote in future interviews.
A stepping stone to a bigger salary down the road……?
A political star rising with anti racism bragging rights?
Only the rich Yale-ies know for sure.

#98 Tony on 12.05.22 at 8:56 am

2011 MLS Statistics Victoria BC – All About Victoria https://livinginvictoriabc.com › moving-to-victoria-bc
Housing Type, Average Price (2011), Median Price (2011) ; Single Family Dwelling. $611,312. $556,000 ; Townhouse. $498,232. $463,750 ; Condominium. $332,638.

$621,000 in 2011 doesn’t sound believable.

#99 crowdedelevatorfartz on 12.05.22 at 9:22 am

Happy Krampus Day Ponzie!

https://historythings.com/krampusnacht-what-is-it-and-how-did-it-start/

Yes ladies and gentlemen.
Dec 5th.

Krampusnacht

This is when a horribly ugly deity with horns and cloven hooves visits the children of Germany and Austria and beats them with sticks if they were naughty.

In modern times the men dress up as Krampus and drink.

Explains a lot.

#100 Sail Away on 12.05.22 at 9:28 am

#90 Faron on 12.05.22 at 2:18 am

Whoops, the US VA has been discriminatory in how it administers benefits. Given the heavily minority nature of the US military, this would seem to be a problem.

—————

My apologies, Faron, for my previous comment alleging you were engaging in intellectual dishonesty and mischaracterization regarding VA discrimination. I was in the wrong. You are correct.

I see the VA secretary did indeed acknowledge historical discrimination based on racism.

#101 Dharma Bum on 12.05.22 at 9:43 am

#47 Ponzie

Unfortunately, perfection is an illusive concept.
So,please forgive me if I’m a little bit skeptical.
It kinda sounds like Sailo’s fairy tale existence.
—————————————————————————————————–

You are forgiven.

Skepticism is very healthy.

So, you are correct to be skeptical.

The way I see it, so far, I’m just lucky. Even though I planned for it – because I admit that I hated my jobs and that retirement was a goal that I actually worked towards in a systematic way for around 35 years with a basic financial plan of “pay yourself first”- I do realize that sh*t can go sideways at anytime.

Never underestimate the power of doom.

In the meantime, though, like I said, the divvies keep on divvying. That’s how you get to say EFFYOO bossman.

Just ask Garth how it works.

He teaches it every day.

#102 millmech on 12.05.22 at 9:58 am

Sail Away
That etf uses swaps so that there is no dividend and it is all capital gains and is only taxed as capital gains when it is sold.
Working two jobs right now so little time to research these things, just caught my attention and was looking for our hosts opinion on it as my registered accounts are all maxed out.

#103 Faron on 12.05.22 at 10:28 am

#98 crowdedelevatorfartz on 12.05.22 at 8:31 am

Only the rich Yale-ies know for sure

Umm, read the article. Seems the VA and the vets who were discriminated against also know for sure.

Some people actually are motivated primarily to simply do good in the world. Even Ivy Leaguers. They aren’t all Kushners.

#104 Ponzius Pilatus on 12.05.22 at 10:55 am

#100 crowdedelevatorfartz on 12.05.22 at 9:22 am
Happy Krampus Day Ponzie!

https://historythings.com/krampusnacht-what-is-it-and-how-did-it-start/

Yes ladies and gentlemen.
Dec 5th.

Krampusnacht

This is when a horribly ugly deity with horns and cloven hooves visits the children of Germany and Austria and beats them with sticks if they were naughty.

In modern times the men dress up as Krampus and drink.

Explains a lot.
—————————-
Wow,
FURZ is getting educated.
Well, thank You.
When I grew up, it could be quite scary going out on Krampus night.
When you heard the chains, you better hide.
And by the way, Krampus is also celebrated in Bavaria and Switzerland.
So, go and insult them, too.

#105 Ponzius Pilatus on 12.05.22 at 11:03 am

102 Dharma Bum on 12.05.22 at 9:43 am
#47 Ponzie

Unfortunately, perfection is an illusive concept.
So,please forgive me if I’m a little bit skeptical.
It kinda sounds like Sailo’s fairy tale existence.
—————————————————————————————————–

You are forgiven.

Skepticism is very healthy.

So, you are correct to be skeptical.

The way I see it, so far, I’m just lucky. Even though I planned for it – because I admit that I hated my jobs and that retirement was a goal that I actually worked towards in a systematic way for around 35 years with a basic financial plan of “pay yourself first”- I do realize that sh*t can go sideways at anytime.

Never underestimate the power of doom.

In the meantime, though, like I said, the divvies keep on divvying. That’s how you get to say EFFYOO bossman.

Just ask Garth how it works.

He teaches it every day.
———————
Thanks for responding.
I feel very fine in my skin financially.
Not to little, not too much.
Fortunately, being good with money seems to be in my Jeans.
And again, health is your most important asset.
And having a Family Doctor.

#106 bcPaul on 12.05.22 at 11:04 am

@ #11
You’ve obviously never been a landlord!

#107 Ponzius Pilatus on 12.05.22 at 11:12 am

87 DON on 12.05.22 at 12:54 am
#75 Ponzius Pilatus on 12.04.22 at 9:37 pm
#70 Pulp Fiction
Your post is longer than the movie.
Get yourself an editor.

********
It has to be long, to explain the nuances and context. Most people think short term happy path and rely on hopism rather than the reality that life experience provides. Risk management seems to have been forgotten by individuals and institutions in the last 15 years of free money
———————
When I was working, every report to me had to have an executive summary.
Good way to find out whether the writer understood what was important.
Remember, people are busy.
Time is money.
Don’t want spend time on a goose chase.

#108 Balmuto on 12.05.22 at 11:38 am

At $55k a year, there’s not much left over to invest with if you’re renting in one of Canada’s major cities.

The problem is that our cities are too expensive for the average person on the average salary to live in. It’s impossible for the average person to build wealth unless they’re extremely frugal, and most people want to live a little.

There are only two ways out of this: 1) get a job or a promotion that pays a lot more 2) get a full-time remote gig and move to the sticks.

The sticks? You mean like Calgary? – Garth

#109 David Greene on 12.05.22 at 11:48 am

Sexist much? This is both sexist and factually untrue. Pretty much unanimous research indicates women are no more irrational than men about most things. But thanks for showing us how ignorant you are.

Garth, I’m surprised you didn’t censor/comment on this.

=====================================
#69 Bdog on 12.04.22 at 8:39 pm

Women’s irrational emotions are a huge contributor to the elevated cost of real estate.

#110 Quintilian on 12.05.22 at 12:13 pm

#103 millmech on 12.05.22 at 9:58 am
Sail Away
That etf uses swaps so that there is no dividend and it is all capital gains and is only taxed as capital gains when it is sold.

Dr. Garth, here is a perfect example why I emphatically state the stock exchange is a casino, not a legitimate economic exchange facilitator.

What, I ask, does a SWAP contribute to the real value of a stock?

None! It’s just another tentacle to legitimize gambling.
And the dealer/ house always win.

We do not utilize swaps nor ETFs based upon them. The market is not a casino, but people are greedy. – Garth

#111 Faron on 12.05.22 at 12:35 pm

#94 NoName on 12.05.22 at 7:10 am

Thanks for the video and for introducing me to Sabine Hossenfelder’s youtube channel. She’s great.

The issue with quantum computers and breaking cryptography comes down to an extremely large risk (breaking internet security would have devastating economic consequences) with a very small likelihood (chance of development of a functional computer). Humans don’t plan for tail risks well at all. Nassim Taleb has built a career around this behaviour. This is why development and implementation of quantum resistant cryptography is no-brainer, cheap insurance.

The impact of quantum computing on cryptography

#112 V-strom Rider on 12.05.22 at 1:17 pm

“But the key point is that anybody making $55,000 should not be buying real estate. ”

I think the point is that salaries have not kept pace with housing costs. In the 80s, somebody could graduate high school, find an average job, and save up enough to buy a modest house in the suburbs by age 25. That is not possible today. Our living standards have eroded and seem to be getting even worse.

#113 Faron on 12.05.22 at 1:19 pm

#110 David Greene on 12.05.22 at 11:48 am
Sexist much? This is both sexist and factually untrue. Pretty much unanimous research indicates women are no more irrational than men about most things. But thanks for showing us how ignorant you are.

Garth, I’m surprised you didn’t censor/comment on this

Now imagine what he does censor. Look back at Tatiana’s recent post and the vitriol and abuse that was expectorated toward her in opposition to a mere factual mention of gender differences in pay and wealth.

The silent minority gets really loud on the anonymous, consequence-free internet.

#114 Ken Miller on 12.05.22 at 1:20 pm

#58 Ponzius Pilatus on 12.04.22 at 7:42 pm
#7 TN

https://www.euronews.com/green/2022/12/02/is-france-banning-private-jets-everything-we-know-from-a-week-of-green-transport-proposals
It’s official: France bans short haul domestic flights in favour of train travel
————–
Only the beginning.
Germany next.
And then the World.
Oops.
North America has no bullet trains.

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

I don’t think anyone will emulate Germany’s approach to energy, given that it’s been an utter disaster.

You’ve clearly been greenwashed, the very article you linked to mentions the futility of the ban.

“ Sarah Fayolle, Greenpeace France transport campaign manager, told Euronews that there were both “negative and positive aspects” to the European Commission’s decision given that only three routes are affected.”

Three routes lol.

Unicorns and faerie farts will save us all.

#115 Faron on 12.05.22 at 1:23 pm

#111 Quintilian on 12.05.22 at 12:13 pm
#103 millmech on 12.05.22 at 9:58 am
Sail Away
That etf uses swaps so that there is no dividend and it is all capital gains and is only taxed as capital gains when it is sold.

Dr. Garth, here is a perfect example why I emphatically state the stock exchange is a casino, not a legitimate economic exchange facilitator.

What, I ask, does a SWAP contribute to the real value of a stock?

None! It’s just another tentacle to legitimize gambling.
And the dealer/ house always win.

We do not utilize swaps nor ETFs based upon them. The market is not a casino, but people are greedy. – Garth

Some argue that derivatives are the truest expression of an asset’s value. For example, the options landscape for a given equity has far greater power to price current and expected value of a company. For highly complex entities like corporations, a multi-dimensional descriptor of price/time is needed.

#116 Linda on 12.05.22 at 1:28 pm

#91 ‘Soggy’ – how much one pays in tax on RRSP withdrawals depends on how one takes it out. IF taking out a lump sum of $15K, then yes, the tax hit is 30%. If one takes out lump sums of $5K or less then the tax hit is only 10%. So #2 ‘Shawn’ likely has withdrawn or knows someone who has withdrawn high amounts, possibly in conjunction with having a hefty annual income which could have pushed their tax hit to the highest levels, which is in excess of 50%.

#117 Shawn on 12.05.22 at 2:00 pm

RRSP “Tax”?

#91 SoggyShorts on 12.05.22 at 5:04 am
#2 Shawn on 12.04.22 at 11:41 am

ALWAYS remember that a big percent (30 to 50%) of the dollars in “your” RRSP are pre-tax dollars that will in most cases go back to the government.
*************************
That seems high.
My wife and I could each take out 30K and pay an average rate of 15%, not “30 to 50%”

And 60k/y is us traveling almost constantly.
40K (8.5% taxes) is what we were spending while we worked, and over what we’ll spend once settled for a bit.

****************************
Sure some people can get RRP money out at very low taxes. In your case the tax on the growth of what you put into the RRSP (net of refunds) is surely negative. I’ve explained the math many times here. You did better than a TFSA.

Congratulations.

As Linda points out I was thinking more of those in higher tax brackets. If you have a good work pension you are already into the 35% range or more before you touch a dollar of RRSP. Pretty soon you are at 50% plus. But that was the deal. And high income earners got similar high percent refunds. No complaints!

#118 Shawn on 12.05.22 at 2:05 pm

Soggy Shorts said:

And 60k/y is us traveling almost constantly.
40K (8.5% taxes) is what we were spending while we worked, and over what we’ll spend once settled for a bit.

******************************
I take it you are not doing Maui on that budget. Cruise ship, inside cabin? Those are a steal of a deal. I respect that.

#119 Love_The_Cottage on 12.05.22 at 2:07 pm

#117 Linda on 12.05.22 at 1:28 pm
#91 ‘Soggy’ – how much one pays in tax on RRSP withdrawals depends on how one takes it out. IF taking out a lump sum of $15K, then yes, the tax hit is 30%. If one takes out lump sums of $5K or less then the tax hit is only 10%. So #2 ‘Shawn’ likely has withdrawn or knows someone who has withdrawn high amounts, possibly in conjunction with having a hefty annual income which could have pushed their tax hit to the highest levels, which is in excess of 50%.
_________
Sorry Linda, you’re mixing up the withholding tax from the ultimate amount payable which depends on your total income in a year, not the amount withdrawn. A common mistake.

Having said that I agree that Shawn’s estimates for taxes are too high for most, but the point he makes that you should factor taxes into retirement planning is very important.

#120 Quintilian on 12.05.22 at 2:08 pm

Some argue that derivatives are the truest expression of an asset’s value. For example, the options landscape for a given equity has far greater power to price current and expected value of a company. For highly complex entities like corporations, a multi-dimensional descriptor of price/time is needed.

Now that is CRAZY TALK

There are financial statements, and an array of stock valuation methods that can best determine the true value of the stock.

Options ,derivative and hocus-pocus simply don’t have the same credibility for those who are in the habit of working with facts, rather than rolling the dice.

#121 Faron on 12.05.22 at 2:12 pm

#97 Sail Away on 12.05.22 at 8:29 am
#101 Sail Away on 12.05.22 at 9:28 am

Accepted.

#122 Faron on 12.05.22 at 2:26 pm

#121 Quintilian on 12.05.22 at 2:08 pm
Some argue that derivatives are the truest expression of an asset’s value. For example, the options landscape for a given equity has far greater power to price current and expected value of a company. For highly complex entities like corporations, a multi-dimensional descriptor of price/time is needed.

Now that is CRAZY TALK

There are financial statements, and an array of stock valuation methods that can best determine the true value of the stock.

Options ,derivative and hocus-pocus simply don’t have the same credibility for those who are in the habit of working with facts, rather than rolling the dice.

I am pulling this idea from others, but I agree with their view. Essentially, how can a single spot price at all be an expression for the complex identity a corporation has that you indicate? Both now and in the future? As an example, is your name an apt descriptor for all that you are? Or would you prefer a much more nuanced characterization? Shall we call you 42 today and, perchance, 69 next year?

Look at it another way, if market cap (what the stock price tells us) was the be all the price to book ratio should be 1 in all cases. It’s not. Why? Because equity markets attempt to characterize a massive number of degrees of freedom under a single price. This job is much more efficiently performed with options (and futures). The primary downside is that option markets may be too low volume for accurate pricing. Given that, one could argue that the primary asset should be the options, not the underlying.

I recognize that this is a controversial stamce and that controversy id highly warranted.

#123 Faron on 12.05.22 at 2:31 pm

Autocorrect is off: *stance* and *is*

#124 Sail Away on 12.05.22 at 4:39 pm

#122 Faron on 12.05.22 at 2:12 pm
#97 Sail Away on 12.05.22 at 8:29 am
#101 Sail Away on 12.05.22 at 9:28 am

Accepted.

——–

Very good. And btw, any and all of my activity on this blog is only and exclusively on this blog. I’ve not shared your (or anyone’s… except Garth’s) name, position or viewpoints with anybody IRL.