Dr. Garth

The clinic is now open. Please stop vaping and form a neat line out through the parking lot. Remember to step over the dog as you enter. No exposed hands. He’s having a bad day.

Okay, Cheryl, you’re first.

Hello Garth, I have been following your blog for years, found it highly helpful!  My daughter is on a gap year before she goes to university, and has just secured a really good paying job as a swim instructor.  She has already opened a TFSA account last year at BMO, just 600 dollars in it right now.  I am not sure whether she should get started with the banks and have an ETF account or to go through a financial advisor and open one there.  I took a small investment course here through the school board and really liked the financial.  I did learn that advisors can set up much more diverse investments than the banks.  What would you recommend for her to get started?  Thanks so much for your advice, I really want her to get a good start and obtain financial freedom a lot sooner than I have.

Hopefully that course taught you TFSAs aren’t savings accounts, but investment vehicles. Of course she should have growth-oriented assets in there, and it would be a great idea to punt the bank as well. All the ‘advisor’ there will do is stick her money into a bank mutual fund with a 2.5% MER. So tell the kid to open an account with a robo and plop the funds into an equity-based ETF. Use that swim money to make regular contributions, and don’t take the funds out next year to blow at uni. By the way, why does anyone need a gap year to recover from high school?

Next up, James and Linda. “We can take the medicine, administer accordingly,” they say. “Not all of us millennials are soft.” We’ll see.

I have been following your blog since I began college on the recommendation of my father when I asked him about investment resources, and he now invests with you. My fiancé and I are both 24 (Mills). So far, I’m a career student (I make ~20k/yr). I’ve done two years of college, an undergrad at the same time as part-time trade school, and am currently in a PoliSci Master’s program (six years total). I’ve just applied to both law schools and MBA programs (2-3 more years minimum). My fiancé (we’re getting married this year), however, graduated as a nurse and secured a great job (~84k/year). We both have no school debt, CC debt, nor LOC debt, though I face the prospect of that looming in the next few years.

My fiancé bought a house in June 2018 (Southern Ontario, 315k, 30k down, 10k in renos, fixed rate ~3%, passed the stress test and didn’t need T2’s contributions! I’m kept.), about a year after she graduated. She is carrying the house, I benefit from the shelter but hardly contribute.

Right now, the university is paying me to complete my degree, but that could all be changing soon). Almost all of my savings get thrown into the wedding fund. Anything else is being saved in anticipation of more school. My fiancé carries her expenses (house, car) but dumps a few hundred bucks a month into a TFSA with an extremely modest amount (just over 10k). I have tried telling her that self-directed investments could help her establish an investment portfolio, but my basic knowledge and “practice account” don’t convince her, she wants expertise.

Ultimately, is there any advice you can give two young people starting their journey but really benefitting from only one income during my “career development” (if you can call school that) phase while she manages the burden of expenses which minimizes her ability to save/invest. Is there a way to maximize savings and invest for retirement in our situation? We just set up our joint banking, we acknowledge your points about what is shared within a marriage.

As a kept man you should get married soon and stop leaching the girl. And don’t blow a huge wad on the wedding. Trust me – it will be an utterly inconsequential event five years from now. Given the fact she makes four times more and you’re an incorrigible, eternal student, once married all the investing activity should be through your hands. Let her pay the expenses (and hopefully you feel guilty about it) while you invest. Set up a joint non-registered account once the TFSAs are maxed, and also a spousal RRSP in your name (with a DB pension she needs it less). Did I mention you should marry her?

Now here’s Calvin, in Vancouver, where they apparently hollow out your brain and fill it with realtor DNA.

In mid-2015 we bought an apartment …  25% down on a $600k property in Vancouver & invested an additional $150k with an advisor & continued to save. Now late 30’s, Double Income No Kids with good jobs –  our property is valued around $900K, our savings & investments (RSP, TFSA, Non-Reg) have grown to ~$800k and ~ $400K left on the mortgage.

Our Mortgage Renewal is coming up & we aren’t sure what to do. The way I see it – we have too many options.

1) Do Nothing & Renew (fixed or variable?) – Continue to save & invest? – Low Risk.
2) Convert to Interest Only Mortgage, Keep & Rent out our Apartment, move extra payments towards the purchase a House with Rental Suite? – High Risk
3) Stay put, pull the equity out of our apartment & use towards purchase of an income property?  – Med-Risk?
4) Sell our Apartment & Purchase a house with a rental suite? – Med-Risk?
5) Keep apartment, rent it out & move to the 416? – Low-Risk
6) Pay off Mortgage completely & stay put? – Low-Risk

Again – it boils down to managing risk vs reward & what to do next?  We would love to hear your thoughts on where you think the market it going & what you would do in our situation –  feel free to post anonymously on your blog.

Congrats on catching the pre-NDP real estate wave, but don’t expect to have the same results going forward. It’s interesting that 4 of your 6 options involve being a landlord. Do you not have enough problems in your life? Option 2 would guarantee a loss on your equity and make any future appreciation taxable. Bad idea. Option 3 would load you up with more debt, suck off some savings, give you needy, entitled tenants and saddle you with big insurance and maintenance costs, plus (likely) negative cash flow. Bad idea. Option 4 would clean out both the apartment equity and the portfolio, unless you mortgaged. And still have someone thumping in the basement? Bad idea. Option 5. Sorry we’re full. Option 6 is senseless since you’d take investments making double-digit returns to pay off a sub-3% mortgage. Why? Bad idea. So, there you have it. Option 1 wins. But you knew that.

And the last patient of the day is Nathan. Finally a normal person…

Not just saying this because of the MSU obligation, but I do love your blog posts – please keep doing what you do. You’ve helped me immensely. I don’t think the wife likes what you’re saying…. But we’ll turn her around eventually.

I do have a question for you. My wife, 2 kids, and I are planning to relocate from the big smoke to Halifax (low costs!) and are planning to buy a house there. Given the low interest rates and favourable prices, why not? We are not planning to overextend and are able to put 20% down without doing any serious damage to our finances. My question is should we put down the 20%? Given the low interest rate environment, wondering if we might be better off leaving our sheckles at play in the market. I get that we’d have to pay mortgage default insurance. Too aggressive?

Nope. Smart. You get it. Halifax is a great place to live – affordable, progressive, historic, great big sea, better climate than the GTA. What costs $1.5 million in the GTA goes for a third that price in HRM. And no 401. Or Doug Ford. Teachers’ strikes. Or Drake. All good.

As for the downpayment, save your cash and invest it. Mortgages are cheap and flexible. The CMHC premium can be folded into the loan. Local housing appreciation is relatively glacial, which means your net worth will likely grow faster if the bulk of it’s in a portfolio, instead of a house. You can always make a lump sum payment when the mortgage renews, so why not grow the money more rapidly over the next five years in liquid assets?

She will eventually love you. Use lobster.



I have no kids. Forty-nine years ago I married Dorothy to be with her. Not to have a family. She was good with that. If you get through this life with one true, forever friend, she once told me, you’re lucky. I got mine.

Why do most people have children?

Historically, it made great sense.  Farming families needed hands and backs. Having children was like creating loyal employees you didn’t need to pay.

Tribes and cohesive societies needed to thrive, protect their turf, survive. Numbers were critical. Children give us a way of passing on culture, values and purpose.

Religions need fresh adherents. Size matters to the faith leadership. So organized religion has always made motherhood and parenting godly.

Mostly though, people have kids just because they want to. They replicate and relive their own experiences as children. They’re wired to reproduce. Nature is all about the propagation of a species. In case you were not so inclined, the divine powers made sex. It’s fun.  And guess where that leads you?

Of course people love their offspring. Sacrifice for them. Turn parenting into a life-long job. It gives many their sole or greatest sense of meaning and accomplishment. Not a week passes I am not astonished at the lengths parents will go to in order to cushion their offspring from the realities of life.  Look at the legions of young adults at home these days. It’s historic. We coddle and protect our spawn even when they’re far from youth.

Children are expensive. Zero to 18 costs about a quarter million, all in, studies show. But it’s not just daycare, clothes, food, sports, toys, programs, bail and schooling. Many maternity leaves are unpaid. Lots of new moms decide nurturing their child trumps a paycheque. People buy houses when they have families, even if the kids don’t care. They load up on needless insurance out of hormonal guilt. They eschew mobility and job opportunities because they don’t want a six-year-old to leave her friends. They eat into retirement savings to keep a 28-year-old cocooned at home. The economic sacrifices are endless.

On a larger plane, human reproduction has forever changed the earth. When I was born there were a little over two billion people. Now we’re pushing eight billion. My parents had four kids, which was normal. Now the fertility rate is 1.6 per woman, and the average family is 2.5 people. As women have become universally educated, more critical to the economy and equal in all regards, motherhood has waned. This is most evident in the developed world. As a vibrant middle class explodes in developing nations, the same trend emerges. The fertility rate in China now equals ours, and births are falling by two million a year.

So humans evolve. Now that we’re all talking about climate change, living in a world where half the animals have perished over the course of my marriage, that must be good. Eight billion cannot become twelve or sixteen without dystopian consequences. Why would anyone wish to birth children into a dying world? Perhaps we have turned that corner. If so, it will be an improving global standard of living, more education and economic opportunity that does it.

By the way in Canada we have a negative birth rate. The population would be steadily declining, were it not for immigration. Look at government policies. We pay people – actually quite a lot – to have children. The child benefit has helped remove millions from the tax roles. Kids are as good for the economy as they are tough on family assets.

In fact the decision to have a son or daughter is probably the most profound financial one people ever make. It ripples through every aspect of daily, professional and matrimonial life, and lasts decades. And yet it’s the one that’s most emotional, least logical and often taken as granted. Like breathing.

If you have a family, consider this advice from a guy with no skin in the game: plan for it. Utilize the tax-free growth of an RESP. Collect the free grant money. Don’t go out and load up on the wrong kind of insurance. Don’t buy real estate you can’t afford because of junior. The kid can be a happy renter. Try not to helicopter. Don’t forget your own financial well-being and retirement savings. Ask adultlets at home to pay rent, or the utilities. Good training. Only fair. Move if your family will be stronger financially. Kids adapt. Realize that having a big educational nestegg for your child is worth more than annual trips to Mexico. Teach them what schools don’t. Ethics and (of course) finances.

There. You’re all set.

By the way, Dorothy told me I’d be a complete moron if I wrote this blog. “I’m trying,” she said, “to save you from yourself.”

What’s your best friend for?