Inflation

[Mad Mike]

We are at 2.84% and renewed early in 2022 to get that rate....but that is moot as we are paying it off on Friday

Why pay it off? Toss the loose change into a decent dividend stock, earn at least 5%, use the dividend to pay monthly mortgage, the rest for a new bike.

 

[Mad Mike]

Great job. I wouldnt reno as unless you are happy to pay the full amount for the enjoyment, it's expensive as in that situation, you don't get anymore when you sell for redevelopment. If the current developer doesn't work put, talk to your neighbours about a package sale and start calling others. Expect about 10% over fair market value for your efforts.

We paid off our first house in ten years. After the cost and hassle of selling took a bigger jump than I originally planned for second house. Bigger loan, bigger expenses and kids costing more and second house will be close to 25 years (barring cash infusion).

Expect more than a 10% premium if you’re opening an MDU development opportunity.

In my hood, a regular lot 60’ wide infil takes a 4300sq’. A pie 60’ pie corner lot pulls at least 40% premium as it will take a 6500sq’ house. Same for side by side 60s as they redevelop into 3x40 and sell for about the same as a 60’ lot.

 

[backmarkerducati]

Why pay it off? Toss the loose change into a decent dividend stock, earn at least 5%, use the dividend to pay monthly mortgage, the rest for a new bike.

We ran the numbers multiple, multiple ways. On the surface that sounds good and logical (get 5% and pay 2.84%), common idea and advice, we so looked at it, ran the numbers... then the bank started to recommended it until they ran the numbers with taxes... short answer, after tax there is an upside but it is not so compelling. The other game changer the decreased expenses per month (by paying it off) opens up other things like increased pension and ESAP that pay off more than double any potential after tax gains investing the sum. Not enough room in anything tax sheltered to avoid the taxes. We ran GIC (worst tax wise), we ran dividend paying stocks (can be better tax wise, but more risk), eligible, non-eligible, DRIP, different rates, etc.

Taxes are the rub.

 

[Scuba Steve]

We ran the numbers multiple, multiple ways. On the surface that sounds good and logical (get 5% and pay 2.84%), common idea and advice, we so looked at it, ran the numbers... then the bank started to recommended it until they ran the numbers with taxes... short answer, after tax there is an upside but it is not so compelling. The other game changer the decreased expenses per month (by paying it off) opens up other things like increased pension and ESAP that pay off more than double any potential after tax gains investing the sum. Not enough room in anything tax sheltered to avoid the taxes. We ran GIC (worst tax wise), we ran dividend paying stocks (can be better tax wise, but more risk), eligible, non-eligible, DRIP, different rates, etc.

Taxes are the rub.

Yes the 50 percent they take back makes it hard to justify when 1000 post tax is the same as 2000 pre tax

Sent from the future

 

[backmarkerducati]

Yes the 50 percent they take back makes it hard to justify when 1000 post tax is the same as 2000 pre tax

Sent from the future

Worse yet is when the investment gives you 2000 pre tax, 1000 after tax, but mortgage interest cost 1100!

Taking taxes into consideration is pretty important.

 

[sburns]

Nerco'ing this

It's still with us, or at least they are nickel/diming lower cost items.
$3 for a case of water now.

 

[nobbie48]

Nerco'ing this

It's still with us, or at least they are nickel/diming lower cost items.
$3 for a case of water now.

After having a few kidney stones I hydrate. Thanks to an insulated stainless bottle I only buy a case or two of bottled a year.

 

[sburns]

After having a few kidney stones I hydrate. Thanks to an insulated stainless bottle I only buy a case or two of bottled a year.

So tap water?

 

[nobbie48]

So tap water?

Run through a Brita filter. A lot of bottled water is just filtered.

Spring water is subjective. Years ago my late step father went to a spring on Mississauga Road south of Dundas to get his. Back then there was a horse farm up the hill so he was basically getting filtered horse piss.

 

[shanekingsley]

Run through a Brita filter. A lot of bottled water is just filtered.

Spring water is subjective. Years ago my late step father went to a spring on Mississauga Road south of Dundas to get his. Back then there was a horse farm up the hill so he was basically getting filtered horse piss.

I grew up around there and we only drank that water all through the 80's, so after the horse farm. I remember that when they developed the area just south of it to build McMansions, the spring water become polluted and they had to shut it down.

There's a spring that people use up in Elmvale which I always see tons of people filling up their jugs.

 

[GreyGhost]

I grew up around there and we only drank that water all through the 80's, so after the horse farm. I remember that when they developed the area just south of it to build McMansions, the spring water become polluted and they had to shut it down.

There's a spring that people use up in Elmvale which I always see tons of people filling up their jugs.

On the water safety front, my parents have a dug well. When I grew up, regular water testing wasn't common. After I left home, they got the water tested for some reason. High fecal coliform, high something else. Now they have UV and filters and . . . in the line. Imo, the water was better before and it never made us sick.

 

[sburns]

There is a spring at Lakeridge Ski Resort (well right at Lake Ridge and Chalk Lake Rd) I've stopped to fill up there, see people doing it all the time.

 

[nobbie48]

On the water safety front, my parents have a dug well. When I grew up, regular water testing wasn't common. After I left home, they got the water tested for some reason. High fecal coliform, high something else. Now they have UV and filters and . . . in the line. Imo, the water was better before and it never made us sick.

Peterborough utilities got a complaint from a home owner about the taste of the city water.

An investigation revealed that the previous owner had put in an under counter filter system and the new owner wasn't aware of it. That resulted in the filter turning into a swamp.

 

[mimico_polak]

0.5% rate drop in the US…Canadian inflation down to 2% (apparently closer to 1% if you don’t count mortgage rates)…

Looks like things are dropping much faster than many anticipated.

Wonder what BoC will do in Oct and December.

My mortgage payments have gone down about $130/month with the 0.75% drop to date.

 

[nobbie48]

One big snack company just bought out another and will control 28% of the market. Will the snack aisle of the supermarket become too expensive? Stock up on your Halloween stuff.

 

[crankcall]

The snack aisle is already out of control, $3.99 for a large bag of ripple chips ? That’s half of a potato in there , in a .03 cent foil bag. The cost get it to the store costs more than the product.


Sent from my iPhone using GTAMotorcycle.com

 

[MacDoc]

My Snickers bar feels half the size tho same price.

12% smaller by weight and physically but bigger packaging with the flared ends. Buck a bar is okay - usually have 1/2 bar a day.

 

[sburns]

Prescription drug prices have price gouged, par for the price increase bandwagon. Or at least mine have, doubled in price. Yes doubled, and only recently as I just purchased them back in June. Not generic, pharmacist said the big companies have raised all prices, not much the gov can do since they just threaten them with not making available other products. Generic prices have also seen increases but they are price fixed increases.

Ya glad we have a gov looking out for Canadians and not worrying about the dog and pony show.

 

[nobbie48]

Worse yet is when the investment gives you 2000 pre tax, 1000 after tax, but mortgage interest cost 1100!

Taking taxes into consideration is pretty important.

Years ago we had a 13% mortgage while our dependent daughter had tons of money in Canada Savings Bonds, gifts from a generous grandmother. We had to pay tax on our daughter's interest but couldn't deduct the interest on our mortgage. We explained the situation to her and she cashed in the bonds and loaned us the money to pay down the mortgage. We repaid her with interest later.

A friend was a worry wart and kept a $20,000 contingency fund that cost him tax on the interest. At he same time he had a mortgage and unlike the USA, we don't get interest credits. He was advised to put the $20,000 towards his mortgage and take out a HELOC. Double win.

 

[GreyGhost]

Years ago we had a 13% mortgage while our dependent daughter had tons of money in Canada Savings Bonds, gifts from a generous grandmother. We had to pay tax on our daughter's interest but couldn't deduct the interest on our mortgage. We explained the situation to her and she cashed in the bonds and loaned us the money to pay down the mortgage. We repaid her with interest later.

A friend was a worry wart and kept a $20,000 contingency fund that cost him tax on the interest. At he same time he had a mortgage and unlike the USA, we don't get interest credits. He was advised to put the $20,000 towards his mortgage and take out a HELOC. Double win.

That's basically our plan. Kids had a decent amount of money from gifts over the years. I put it in their RESP so it is growing instead of deflating. Keeping much cash these days gives you a painful lesson in inflation and taxation.