I'm thinking mostly 0.25 increases for a total of around 2% rise. If BOC decides to shock the market in an attempt to alter behaviour, maybe 0.5% somewhere along the line to act as the ice bucket challenge.
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So.....recession time!?
- Thread starter mimico_polak
- Start date
We all had it easier LOL , and the next Gen will have it easier . It’s all the poor schmoes in the middle dukeing it out.
I like to know a number , if I have 5 yrs at xx , I sleep at night . That’s my limiting factor on a LOC , it can go up .
Some of you have predicted many are living the life on LOC money. Yes , yes they are . Pools holidays pontoon boats you name it . And a small correction will really hurt some of these folks
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I like to know a number , if I have 5 yrs at xx , I sleep at night . That’s my limiting factor on a LOC , it can go up .
Some of you have predicted many are living the life on LOC money. Yes , yes they are . Pools holidays pontoon boats you name it . And a small correction will really hurt some of these folks
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When I got my mortgage for 11.75% the house was 30,000$. I described it as a tar paper shack wrapped with vinyl in an ethnic neigbourhood. (streetview attached - same house only it was green w/o gnomes) Sold it 2 years later for 42K in part to fund a backpacking trip through Europe.
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Good deal for those that are waiting to buy a pontoon boat. Liquidating your pool to pay off part of the LOC is much harder.
11% on my mortgage on a $150000 home was 57% of my gross income at the time
A $1500000 home today was out of my price range back then and would have been likely in the $400 000 to $450 000 range. And interest would have been close to 200% of my gross income.
I am a cautious investor because like a ton of Canadians I am not diversified enough with a huge part of my equity being my house.
If I lost all my other investments I would still have my house and have the potential of slowly rebuilding some of my other equities.
If I lost my house, the income from my other equities wouldn't let me buy my house back in today's market. You can buy or sell a few shares of XYZ Inc at a time within your comfort zone. With real estate it tends to be an all or nothing proposition and the "brokerage fees" are brutal.
Some people are cautious by nature others by necessity. One also has to get a true feel for their investment savvy. Reading a book by Warren Buffett doesn't make you Warren Buffett.
People under 35 years old may have heard their parents talk about the 2008 meltdowns or the 20+% mortgages of the early 1980's but they themselves never actually got the punch in the face. As a kid, I had neighbours that went through the depression of 1929 and it shook them to the bones. We have been so prosperous for so long that one has to wonder about another massive correction.
Covid 19 is an example of an out of the blue economic earthquake. I started a thread just under two years ago and it's amusing to read the earlier comments. Coronavirus "Don't get your shorts in a knot"
What is also very interesting is that the economic sky didn't fall, for everyone that is. The rich got richer. The poor got poorer and the middle muddled along.
How is the next ball going to bounce? Will it affect everyone, just you or everyone except you?
IMO the most important factor is how the individuals involved handle set backs. If you lost everything do you shake it off and start rebuilding, crawl under a rock or into a bottle? How does your spouse think and how would they react?
sburns
Well-known member
I didn't really have a much of a point, I wasn't trying to be critical either.
But when people drop a single number in a more complex situation, it needs some clarification to fill in the picture.
POWERMAN
Well-known member
I'd like to know as well since my property hunting has been going to @#$%& lately.`
Most houses that are listed for $450k-$600k end up selling for $825k+ easy after a bidding war.
Even shitholes where one cannot live in - broken down and disastrous inside, sell for some where around 600k.
And this was in Hamilton for the past 3 weeks.
Either there are a lot of renovators with deep pockets or people seem to have a LOT of money (in cold hard cash) to throw at properties that dont even command such pricing!
Expanded my search to Brantford, Waterloo and Cambridge - these places seem to be catching upto Hamilton levels now.
I may have to start looking at London or Windsor as things weren't looking good last night on MLS...sigh
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I, like many others am overweight in residential real estate. I have avoided investing in real estate outside of my principal residence in an attempt to maintain some balance. Recently I picked up a chunk of PRV to add exposure to industrial and commercial real estate. Also added ENB as I had no utility exposure (other than a small amount within some index funds). ENB was purchased with borrowed money. Dividends will be funneled back to LOC.
Meltdowns are where you can get ahead. 2008 let me buy aapl at <$10/share (split adjusted). I picked up a bunch of LSPD this time. It is nowhere near as safe a bet but hopefully it pays off.
We had a somewhat similar path but fighting some changes in spending today could be counter productive.
How much did you spend on cell phones and internet?
A Luddite family today probably spends $500 -$600 a year on a basic land line, family of four. TV by antenna.
A "modern" family will have four cell phones, internet, cable etc, and with replacement phones the yearly family cost is four or five times higher.
However way back in time a job ad might say "Must have driver's license and car." Today a smart phone, computer knowledge and an internet connection is probably more important. Covid and your kids don't have internet for at home learning???? How's that work? WFH without internet?
One sad factor is that society has become too focused on the perception of wealth and if you look like a peon you will be treated like peon. The guy in the leased Porsche wearing a Savile Row suit bought on credit will all too often be given more consideration than the dumb farmer in overalls. It is ignored that the dumb farmer owns a couple of million in land and another million in machinery and to be successful as a farmer is also a biologist, veterinarian, accountant, herbalist, mechanic, heavy equipment operator and weatherman.
The perception part is the hardest to deal with. Do you buy your kids (Or yourself) the designer clothes and $400 sneakers so they are accepted (Becoming part of the superficial crowd) or do you deny them social contacts that might pave the way for a better future?
bigpoppa
Well-known member
millennials in a nutshell.I lost money gambling on stocks.
Very depressing out there
Cant afford to buy a house, so invest in NFTs, shitcoins, and memestocks.
bigpoppa
Well-known member
Problem is we live in zombie capitalism, corrections are no longer allowed, consequences be damned.
No housing correction allowed, no stock market corrections allowed, no companies allowed to fail (bailouts)
I remember a time when investment came with risk. I feel old.
No housing correction allowed, no stock market corrections allowed, no companies allowed to fail (bailouts)
I remember a time when investment came with risk. I feel old.
D
Deleted member 50930
Guest
Those who got their foot into housing are doing very well.
But now rent is also becoming unaffordable
Sochi
Well-known member
The history repeats itself, every single empire in the human history collapsed eventually, the good news we still have enough time in this one for our lifetime
Best book on the subject:
The History of the Decline and Fall of the Roman Empire - Wikipedia
I think the point was trying to gamble to catch up. Capital preservation and time is a proven strategy. Diamond hands works for a few but wipes out orders of magnitude more. I understand the appeal of winning the lottery but keep the pure gambles (like LSPD which may be years from profitability) to low single digit percentage. If it hits, it becomes a substantial portion of the portfolio, if it collapses, I lick my wounds but am not wiped out.
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bigpoppa
Well-known member
looks interesting, ill take a lookThe history repeats itself, every single empire in the human history collapsed eventually, good news we still have enough time in this one for our lifetime
Best book on the subject:
The History of the Decline and Fall of the Roman Empire - Wikipedia
en.wikipedia.org
although at this point Id say its the american empire thats collapsing.
People are upset about the chinese, but its just history repeating itself, and they're in the driver seat now.
So the question for those that have lived through a recession….are we seeing signs of this incoming? I know I expected the market to tank after COVID, and yowza was I wrong!
I’m too dim to know what to look for. But I do know if enough of the news starts to use the word ‘depression’…fun times ahead.
I’m too dim to know what to look for. But I do know if enough of the news starts to use the word ‘depression’…fun times ahead.
Not sure there were signs before the last one this looks nothing like that. Everything is growing right now last time it just stopped dead.
From a lot of what I see the renovators in Hamilton may have deep pockets but shallow consciences, icing moldy cakes. My daughters place is 4-5 times what she paid a dozen years ago. The curse of Hamilton is that too many people from Toronto are moving there with the intentions of showing them how to run a city. (More like how to ruin a city)
For the numbers you imply you would have to look at east of St Catherines or at Niagara Falls. Job markets could be iffy but Go Transit is IIRC going as far as NF. Grimsby / Beamsville is no longer bargainsville, also in filling with townhouses and high rises.
The Erie shore has some possibilities as long as it isn't waterfront. If you have a long commute but really enjoy your home is the time spent on the road 10 times a week worth it? Only you can answer that. I knew a guy that commuted from Midland and justified it by being able to fish and boat from his own property when he got home. Gas isn't fifty cents a gallon anymore.
What are your assets? Immediate dollars and future potential. Will future potential grow substantially ie go from assistant to manager, apprentice to journeyman etc
Skill sets? Can you renovate and build sweat equity?
Future costs? Kids. Do you or your SO mentally need to take vacations or is a day trip OK?
To the north west KW has taken off so that means commuting from farm towns that are still farm towns. Listowel etc. If you're lucky they become trendy and you hit the jackpot. 30 ish years ago an engineer told me to invest east of Aurora. Try buying in Stouffville today. It's Rosedale north.
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Sochi
Well-known member
What you hear will depends on what "gods" are you praying to - MMT Monetary Theory vs. Austrian Monetary Theory....
I love this guy - Austrian Theory of course - Steve Hanke, professor at John Hopkins University:
"It's all about money supply stupid!" Can't money print yourself out of crisis forever... Capitalism 101...
Steve Hanke - Wikipedia
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