New posts

How much do you know about financial independence?

Sept. 14, 2016, 7:48 p.m.
Posts: 18069
Joined: Oct. 28, 2003

0.fuckall% on my savings account. That's why there's only three months of spending wasting away there in case I get laid off.

Sept. 15, 2016, 8:47 a.m.
Posts: 15089
Joined: Nov. 20, 2002

I don't really understand why it seems so hard for people (not directed at you in particular) to see that housing and stocks can collapse and erase phoney wealth created by bubbles when this shit has happened repeatedly in very recent times, but it's sure going to happen again. And when it does, people like you may be doing just fine (I genuinely hope so), but plenty will lose whatever gains they have made and be left holding the debt bag. And then the people with their money in a 0.15% GIC will probably look like geniuses.

I've been spouting doom n gloom for years! So we can definatly agree on housing and stocks collapsing and bubbles the big question is always … when?

Been golden for [HTML_REMOVED] 11 yrs now so I'm a special flower

Sept. 15, 2016, 9:15 a.m.
Posts: 955
Joined: Oct. 23, 2006

I've been spouting doom n gloom for years! So we can definatly agree on housing and stocks collapsing and bubbles the big question is always … when?

Been golden for [HTML_REMOVED] 11 yrs now so I'm a special flower

Ditto. I've been negative on RE for about 8 years ago. But I've adjusted my outlook along the way and bought and sold one house and built another knowing full well it may take a dive. I am trying to sell right now, but I think I waited 3 months too long. I think the chickens are on their way home to roost. Plan was to get out of RE and wait for the stock market to dive and then go all in. But that's the risk when investing into obvious bubbles and thinking you can get out in time. If there's no pickup soon I could be in for a much longer term commitment than I intended. Not so bad though, as I like it here and can stay if I need to, and you need somewhere to live. I could be totally and utterly wrong (again) anyway, and if I do sell I'll have to decide if I think sitting in cash and losing to inflation, or keep feeding this bubble is the right call (thanks to near zero rates! Bam!)

I think the big difference now to 8 years ago is when I was spouting doom and gloom back then the general feedback was disagreement which is why I changed tack. Now when I say it people tend to agree. I think that says something. And the virtual complete lack of sales in August and so far in Sept speaks louder than that. Will I look like a genius or a fool? The next few months will determine appearances. But reality is I will either be a lucky fool or an unlucky one.

Sept. 15, 2016, 10:16 a.m.
Posts: 227
Joined: Aug. 4, 2009

well at the end of it all I own the house and I live in it,in fact I would own everything I got, you would be suprised how many old fucks live like that, you would be suprised how little $ you need when you own everything …50% of yearly wage is fine

buddy sold out to a multinational and mostly retired except for his directorship at the CU so he don't dig holes anymore and besides he is broadly diversifyed in owning other things which is btw a key principal and so … we ski a lot

I sold out to move towns [HTML_REMOVED] chase tail so in the process I caught the high point/missed a severe RE downturn up here, I left ALL the money in cash cuz I was stoned/drunk/forget to reinvest so in the process I missed the stockmarket crash

So I'm either a fucking financial genius or financial geniusdom has become really just that random

Not everyone is in your position. Younger people such as my self haven't worked for decades to build up equity. Housing, throughout BC even, is quite expensive so its difficult to enter, if even wise at this point.

and Heckler, yes I have investments because I know savings accounts basically do nothing. However, to earn an equivalent return on your money that you would have 10 years ago with higher interest rates, one needs to make riskier and riskier investments, in what would be considered quite a volatile market.

I agree with what Kram is saying.

Sept. 15, 2016, 10:30 a.m.
Posts: 15089
Joined: Nov. 20, 2002

saving is not just a bank account but nothing that is guarantied is really paying much% by the standards of yesteryear but at least it IS guarrantied cuz I'm too old to do it again, a lot of greedy old people stayed in equities for high returns so they lost their shit in the last stock market crash and had to start working again

yeah well a lot of time and some of the time RE went down, I recovered by making some lucky decisions, sometimes it was going left when everyone else was going right so to speak

a lot of younger people in Vangroovy have never seen a boom n bust RE cycle so its easier to think it just goes on forever

I probably shouldn't recommend sex drugs n booze but it sure worked for me

Sept. 15, 2016, 1:02 p.m.
Posts: 18069
Joined: Oct. 28, 2003

I was young with only $100 in the bank at the end of each month at one time too.

The rate of earning (interest) has very little impact when compared to your savings rate. My savings account might have been making 2.5% back in the day - I dont really know, because my rate of saving also was very low at that time.

Sept. 15, 2016, 2:08 p.m.
Posts: 955
Joined: Oct. 23, 2006

I probably shouldn't recommend sex drugs n booze but it sure worked for me

Everything in moderation.
Including moderation.

Sept. 26, 2016, 7:17 a.m.
Posts: 18069
Joined: Oct. 28, 2003

Free download of David Chiltons the Wealthy Barber Returns. No strings attached. An entertaining read about spending vs saving, and what drives consumption habit.

https://www.tangerine.ca/en/landing-page/wealthybarberreturns/index.html

Available till end of this year only.

Sept. 26, 2016, 11:08 a.m.
Posts: 809
Joined: Dec. 22, 2002

Free download of David Chiltons the Wealthy Barber Returns. No strings attached. An entertaining read about spending vs saving, and what drives consumption habit.

https://www.tangerine.ca/en/landing-page/wealthybarberreturns/index.html

Available till end of this year only.

For me, the value of this thread isn't to debate saving vs consumption, but more importantly to make sure the savers are doing so w/o getting hosed. The spenders are over in the Gear forum and shopping for new carbon, so why they high-horse Mint tips etc here?

The real debate is between the folks like Chilton and the more capitalistic folks betting on volatility, using leverage and taking on RE debt etc. For past 8-10yr+, there's been a huge opportunity cost of being that risk monger conservative bear that calls for the bubble burst. They've left a ton of money on the table. So much so, that even if there's a 20% correction in the coming year(s), the non-bears will still be ahead on returns as compared to the renters trying bonds and long term deposits.

Giving advise like Chilton is really a period-piece. The idea of a REIT ETF wasn't around during the time he penned the Barber, so I don't fault him.

Of course, it can get out of hand (think:Synthetic Credit Default Swap)….so our task is to not repeat the past when the S[HTML_REMOVED]P is at record highs.

So what's your strategy? Are you a value investor? Do you short certain sectors or are against any derivative investment products? Are you doing any currency hedging based on where you think the loonie is headed?

NSMBA member.

Sept. 26, 2016, 1:37 p.m.
Posts: 18069
Joined: Oct. 28, 2003

So what's your strategy? Are you a value investor? Do you short certain sectors or are against any derivative investment products? Are you doing any currency hedging based on where you think the loonie is headed?

OK, here's my history and the future:

Used to contribute 5% of income per year to high load mutual funds (2.8% MER, 5% DSC moving 10% over to 0% FEL every year - implying that we hold them for 10 years to be no-load). Had no idea what we were buying, and just signed on the dotted line annually when our "financial advisor" asked us to, because one day we might be 65. Turns out the "oil and gas fund" wasn't such a great idea, but luckily I ditched it before it really crashed hard. Doh!

This is the reason I started this thread after I spent a year learning about our mistakes and what to do about it.

I created our first net worth statement in 2014. That was an eye opener. I now have an annual income statement plan till we are 99 years old.

A significant portion of NW is in NV real estate, which has done well, obviously (~159% increase since purchase). 20% down in 2003, and spent 40-60% of annual gross income on mortgage alone, depending on the year. Significant number of bonuses and annual increased to payments reduced a 20 year mortgage to 13 years and we happily burned it in Feb 2016.

Since then, 65% of our net income goes to tax free/deferred accounts, invested in low cost index ETFs with as broad a market I could find on the TSX. 30% Canada bonds, 25% Canada, 25% US Total market, 17% EAFE and 3% EM. I fully believe in average returns, with broad all-cap diversification to smooth the bumps. No hedging, not market timing, no sectoring. Since mid 2014, investments have increased 73% in total value, but that's mostly from contributions, with moderate gains. In two years, I have never pressed "sell", only "buy". Contributions buy the lowest asset allocation, although I am having challenges with multiple accounts and trying to balance his/her taxable future income with asset allocation and minimum number of holdings.

My next step is to switch our US and EM holdings from TSX to NYSE to reduce taxes from Uncle Sam.

The goal is to be able to take a significant reduction in pay 5-7 years from now with a fun job, and 9-10 years from now be able withdraw 4% per year for life, maintain today's disposable income level for life, with the option of part time fun work when needed.

We made the mistake of buying two new vehicles ([HTML_REMOVED]$25k each) ten years ago, but we still drive them, with no plans to replace, and also have a 35 year old van that's our secondary residence.

So, who's next up? Let's hear your strategy.

Sept. 26, 2016, 2:11 p.m.
Posts: 16679
Joined: Nov. 20, 2002

reduced a 20 year mortgage to 13 years and we happily burned it in Feb 2016.

Well done … Congrats!!!

When one person suffers from a delusion, it is called insanity.

When many people suffer from a delusion, it is called religion.

Sept. 26, 2016, 2:32 p.m.
Posts: 11904
Joined: June 4, 2008

If you completely remove real estate from your calculations what is the result?

Sept. 26, 2016, 3:46 p.m.
Posts: 18069
Joined: Oct. 28, 2003

Instead of being a homeowner, I'd be bitching about the state of Vancouver.

Sept. 26, 2016, 5:10 p.m.
Posts: 11904
Joined: June 4, 2008

When analyzing data it's important to spot outliers. Especially if everything you rest upon is based on simple linear regression.

As soon as I shifted my strategy to only investing in instruments that yielded 100% returns was I pleased with my results.

Sept. 26, 2016, 6:31 p.m.
Posts: 809
Joined: Dec. 22, 2002

A significant portion of NW is in NV real estate, which has done well, obviously (~159% increase since purchase). 20% down in 2003, and spent 40-60% of annual gross income on mortgage alone, depending on the year. Significant number of bonuses and annual increased to payments reduced a 20 year mortgage to 13 years and we happily burned it in Feb 2016.

Just curious about the decision to put the 40-60% into mortgage. Were you feeling you couldn't beat your lending rates in the S[HTML_REMOVED]P or just had philosophic issue with carry debt? I mean, its awesome that your wages were that much higher than your spending, but at that point, you've got some tough decisions on how to invest especially after the TFSA's came online.

NSMBA member.

Forum jump: