This has been a pet peeve of mine since I first noticed it. I think I can understand why people in government feel they need to talk like that but wonder if the non challenge is by design or laziness/stupidity. I am equally frustrated by the early adopter parrots who take this type of speak off of the television and into the work place.
Are we on the cusp of a recession ?
- Thread starter chiller
- Start date
This has been a pet peeve of mine since I first noticed it. I think I can understand why people in government feel they need to talk like that but wonder if the non challenge is by design or laziness/stupidity. I am equally frustrated by the early adopter parrots who take this type of speak off of the television and into the work place.
MarcosSantiago
Well-known member
But you see, that's the point about believing. Deutsche Bank has no obvious reason for fear mongering in Canada. It comes down to ... A.) They are right, or B.) They are wrong.
How can you believe anything they say? Well, Deutsche Bank posted the numbers, and they did not pull out these numbers out of a hat. Sure, they are doing assumptions and predictions, they could be wrong. Take a look at Household debt to income ratio... mortgage credit growth ... number of dwellings under construction... etc.
http://business.financialpost.com/2...starting-with-a-63-overvalued-housing-market/
Bizzaro times.
Friend just listed a house on Hamilton Mtn. Older / run down place. Asking price: $189,000. Selling price (bidding war ensued) $229,000.
Well some people once retired downsize... They don't need the 4 bedroom house cause kids are gone and the house is too big and they can make a decent profit out of the sale. (ie look at high park, port credit, etc)
On another note, when you think of it, its kinda nuts... because when you compare the salary of one job back then and the current salary of the same job, you might see a difference of ...say.. 3-4x higher wages. But when you look at the value of housing, were talking anywhere between 7-12x increase
SO it might be more difficult for the new gen to purchase within their means just through that logic and get rid of said mortgages.
Good point re downsizing.
My kids are part of the new gen. It's sad to hear their wages. One's a university grad.
I was digging thru a box of crap yesterday. I came across an old pay stub of mine, from 1982.
I was making roughly the same / hr that both my kids make, combined. I worked in a factory.
Without assistance, neither of them will ever know what a mortgage is.
Both are in relationships. All all employed. (I hesitated saying "gainfully employed.....lol)
-D-
Banned
It's raining, no crap, we can see that. Tell us something useful.
People will just sit there and agree, yes I see that, you so smart for telling me the obvious. You must be good leader.
We are really becoming a dumb down society.
Sit back and listen to what ppl talk about...useless trivial mundane mind numbing crap BUT to them it is thought provoking and world changing.
On another note, did you guys see the tv promo for the new show Knife fight or some crap like that.
They sell it to you as some underground after hours serious COOKING SHOW with a bunch of dorks oooing and ahhhing over some guy setting a pan on fire...ooohhh
oh look we all have tattoos too
stuff cracks me up
Dresden
Well-known member
Big numbers and fear monger-ing sells newspapers. 63% lolwut.jpg
10 years ago the expat community was non-existent. Take a walk along queen street now and you will see how many foreign nationals are here working/living/renting.
MarcosSantiago
Well-known member
But I am not selling newspapers!!!
What a tough crowd. :confused2:
Let me put it this way: if there is one entity in this country that has zero interest in spreading fear or panic, it has to be the Bank of Canada. But what did it say one month ago?
"Housing market overvalued by as much as 30%, BoC says"
http://www.theglobeandmail.com/repo...-overvalued-by-as-much-as-30/article22021768/
There you have it. 30% is a smaller number.
Even a guy like me with very average iq can't help but notice what's going on. It's overwhelming. We have a guy at work that won't say boo to anybody unless directly engaged. I thought he was a bit slow upstairs. Turns out quite the opposite. It must be brutal for a guy like that watching the parade go by.
-D-
Banned
Overvalued (partially speculatory) housing prices does not equal a recession.
Low (partially speculatory) oil prices does not equal a recession.
Target closing stores does not equal a recession.
It sucks for the people directly involved with any of these events, but it does not add up to recession for the country as a whole.
Oil prices will go up again. It may have been unsustainably high at $100 per barrel, but it's unsustainably low at $45 per barrel.
Speculation is rampant; today's bounce in oil prices may have been a short-squeeze ... but that's a result of speculation that it was going further down.
Low (partially speculatory) oil prices does not equal a recession.
Target closing stores does not equal a recession.
It sucks for the people directly involved with any of these events, but it does not add up to recession for the country as a whole.
Oil prices will go up again. It may have been unsustainably high at $100 per barrel, but it's unsustainably low at $45 per barrel.
Speculation is rampant; today's bounce in oil prices may have been a short-squeeze ... but that's a result of speculation that it was going further down.
Your mistake over the last 20 years has been precisely that you've been without a mortgage. For 20 years you've essentially missed out on borrowing money at extremely low interest rates- free money, which you haven't taken advantage of. Had you leveraged the value of your paid-off home 20 years ago to keep buying houses you'd be sitting on a serious retirement fund right now.
You can go out today and borrow half a mil from the bank at 2.6%... that's retarded. It's literally free money, and has been since you paid off your house.
^ There is a risk versus comfort-level balance to be found.
Having a loan simultaneously with being invested is called being "leveraged", and while it is capable of amplifying your up-side, it is also capable of amplifying your down-side in case your investment goes the wrong way ... or even worse, if your investment goes the wrong way simultaneously with the value of your house going the wrong way simultaneously with interest rates going the wrong way (and an increase in interest rates does tend to drive the housing market down by reducing the affordability factor).
I don't like that situation, either, and I paid off debts before investing anything outside of RRSP. Personally, as of right now, an increase in interest rates will mean precisely nothing whatsoever to me. Irregular cash flow (which I have), is also not a problem any more.
Having a loan simultaneously with being invested is called being "leveraged", and while it is capable of amplifying your up-side, it is also capable of amplifying your down-side in case your investment goes the wrong way ... or even worse, if your investment goes the wrong way simultaneously with the value of your house going the wrong way simultaneously with interest rates going the wrong way (and an increase in interest rates does tend to drive the housing market down by reducing the affordability factor).
I don't like that situation, either, and I paid off debts before investing anything outside of RRSP. Personally, as of right now, an increase in interest rates will mean precisely nothing whatsoever to me. Irregular cash flow (which I have), is also not a problem any more.
Yup, watching opportunities slip away because want to keep life simple.
Risk aversion. Not right or wrong in itself, but it certainly won't make anyone rich, ever. Personal choice.
In Gary's case he wouldn't have even needed to leverage his existing home- maybe just a bit for a small downpayment. Had the interest rates gone up and/or housing crashed, he'd still have a paid-off roof over his head. Obviously now, in 20/20 hindsight, he missed an incredible opportunity.
If you don't mind the leverage, the other thing is to (1) pay off the mortgage, (2) obtain a secured line of credit, (3) use that to invest and nothing else.
Mortgage interest is not tax deductible, but borrowing money to invest is. And then you are not stuck with the prescribed payment schedule.
Even if the investment comes out a wash with the interest on the loan, you still come out ahead if you make the right investments. The interest expense is fully deductible. Dividends and capital gains are taxed at a lower rate. It's really only meaningful if you are already in a high tax bracket ... The rich get richer, but that's nothing new ... and it's usually because they're smarter at managing their money ...
Mortgage interest is not tax deductible, but borrowing money to invest is. And then you are not stuck with the prescribed payment schedule.
Even if the investment comes out a wash with the interest on the loan, you still come out ahead if you make the right investments. The interest expense is fully deductible. Dividends and capital gains are taxed at a lower rate. It's really only meaningful if you are already in a high tax bracket ... The rich get richer, but that's nothing new ... and it's usually because they're smarter at managing their money ...
The plan I'm looking at is almost zero risk as far as I can tell. My house was basically paid for by student renters. I can move into a cheap Hamilton condo and have it paid for by student renters. Line of credit would pay for it, no mortgage. Of course I would not lose access to my back yard shop, basement, attic and sealed off living room which is m/c storage. I'd rather play than build a personal empire. I have enough. But it's tempting because Joneses.
Hindsight is 20/20 and that sounds like work.
I retired 20 yrs ago too.
You certainly don't need hindsight to know a good deal... 2.6% is one such deal
I can only wish to be in a position where my current house was paid off. I'd have another 2 on the go in a flash.Id say that's a fairly decent sized risk there in your plan. What happens when your students decide to stop paying you the rent, or damage the property? Any money made will then go into repairs or keeping up the payments.
dont get me wrong I rent out some property and really enjoy the experience but as far as risk goes I'd say it's not that low. My buddy also rents out and his tenant sent him a letter on the 1st saying that he's broke so now won't be paying at all....and thinks it's ok because he explained his broke situation so now his conscience is clear.....thankfully hes going to get them kicked out and has his hearing next week.
