Tag Archives: Garth Turner

Renting Cool? No Way!

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rent-or-buySo it’s been no surprise that my wife and I have decided to rent, we’ve been renting the last year since we moved out of our condo that has continued to drop in price since we sold.  I’ve been keeping an eye on the old location and it’s hurting.  It was a smart decision and based off checking out the market, listening to people we trust and checking out a lot of people who are in tune with the housing market like Garth Turner. Check out his latest blog post about renting and how people that tell you “you need to be a man and own”, or “renting your throwing your money away”. http://www.greaterfool.ca/2011/07/03/renters/

Maybe renting isn’t for everyone however with the way the economy is headed, interest rates that will rise, you’ll see more and more people starting to rent.  Garth has a great example in there that may change our mind, or not.  Check it out, get all the info and come up with your own opinion but don’t be blind to it. 

I like some of what Gath says in his blog.

“If the goal is to become financially independent and build net worth, renting can beat the pants off owning.” – Just proves it’s not only World Wide Dreambuilders that teaches this success principal.

“…Most importantly, a renter would have lived in an identical (maybe better) house while building net worth and taking no risk on a seriously wobbly housing market. Zero debt. Total liquidity. Unfettered mobility. Net worth would be greater, not less. Options enhanced.”

Garth also refers to a few links that may give you some other insight.  I agree 100% with this link – http://www.moneyville.ca/article/1015893–why-i-sold-my-house-and-rent-instead

And then for the older people – http://www.theglobeandmail.com/news/politics/budget/personal-finance/why-renting-can-be-the-right-choice-for-aging-boomers/article2077874/

My wife and I are very happy renting for the time being, it’s allowed us to be 100% debt free, has given us a heck of a lot more flexibility in so many ways, has allowed us to donate more of our income to charities, and because of being debt free has allowed us to put money back into savings at a MUCH faster rate then what we had before.  Lastly like Garth said we are not tied to a “wobbly hosing market” which means when we decide to move to Kelowna, we can do so without the headache of selling something that may or may not sell.

I’m not saying that everyone has to rent, but if your in debt up to your ears and want to start moving towards financial independence, you may want to think again.  Don’t take my word for it, there are many others stating the same. Thoughts? Comments? It’s open for on topic discussion.

Doom and Gloom? Nope Just More Household Debt!

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DebtSurprise surprise, yet another article on household debt at an all time high. $1.5 Trillion to be exact. Just more evidence that people are still not getting the hint.  Why are people not getting the hint? The allure of cheap interest rates (Which will not last), uneducated people along with that instant gratification are what I think to blame. 

I won’t go into the full details of the article as it’s pretty much the same if not worse as I’ve blogged about before.  Go check out the article over at CTV News.  I also read Gath’s blog which I read all the time where he talks about how home prices in the US just passed the Great Depression in terms of collapsing values. Don’t think that will at least affect Canada? Give your head a shake.  There may be pockets in Canada where housing “may” be looking good, but that won’t last and you really REALLY need to get educated on where things are going.  That doesn’t mean listening to your real estate agent.  You need to check out blogs like Garth’s or people like Harry S Dent who are actually in tune with the markets and in a lot of cases are in agreement with many economists around the world with how we are in a Global Recession.  But again do your own research.

Anyway I’m curious how long people will expect to live with huge debt loads, huge mortgages they can barley afford (just watch when the interest rates go up and how many people ditch), and feeling of entitlement to having what they want when they want.  People need to shift their mentality to long term thinking and figure out where they will be when they retire at that special age of 65. Oh wait, that’s IF you can even retire at 65.  So many people carry debt loads right into their retirement, so much for that pile of cash at the end of the rainbow you were hoping for.

I’m not saying you need to build an Amway business, I don’t need to convince people to do what we do and never will, but you better have a good plan B and start making it your plan A.  Your job at the old factory or wherever you work isn’t going to give you the retirement bliss your hoping for, and neither will that tiny tiny pension plan you have “building up”.  You need to take your retirement (whatever that looks like for you) into your hands now and start making chances so you go into retirement without debt, heck start living today without debt.  Just get smart about it.

I’m sure next month or the month after we will see yet another news article on debt and how it’s higher or something like that, you need to ask yourself what are you going to do today to provide for the future?

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Gas Price Frustration

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GasFrustrationI find it funny how people are frustrated with the price of gas going up.  It’s not new news, gas prices have been going up ever since I was alive.  I remember prices around $0.35 cents a litre however we will never see that price ever again.  Just like eventually we will never see sub $1.00 / litre prices.  Its a fact of life and no matter how many emails go out asking people to boycott the price of gas, it will never change the fact gas prices are going up and will continue to go up.

This recent frustration comes as gas prices in Edmonton just went up over $1.20 / litre and everyone is up in arms.  They are frustrated and I believe for most (not all) people they are frustrated because they are busted financially and have debts that need repaying causing them to have no room in their budget to take into account the additional hike in price.  I was asked today how debt has anything to do with the frustration of gas prices going up.  It’s very relevant because people who have debt and are busted with other commitments are going to be frustrated when things go up and affect their budget.  Someone who doesn’t have debt has a lot less frustration (yes it’s okay to be frustrated) because there are no other debt commitments pulling them from side to side.  Lastly there are those who have no debt and have low income and yes for those people it will be tough and frustration is truly understandable, however there are many opportunities out there to better your situation, that’s my opinion.

How do I know? Well we are going to be debt free in a few weeks here and I know our frustration level have gone down to the point I honestly don’t care how high it goes, we will make changes in our lifestyle and look at ways of increasing our means if need be to afford the gas.  When you don’t have debt you have other options.  Honestly it’s not like this news is new, I’ve been mentioning since September interest rates will go up, prices will rise, and so have others such as the government and people like Garth Turner.  People who choose not to listen and take their debt seriously will be the people who complain and are frustrated the most.  Stop complaining and start putting a plan of action together and kill that debt!

Comments Welcome for relevant conversation.

Great Blog

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Deflation I was recently told to check out this blog by Garth Turner who really has his finger on the pulse of the Canadian economy and real estate.  A few other things as well however I try to follow more economy and real estate.  Check out his blog here (http://www.greaterfool.ca)

I was checking out his latest article titled Deflated where he talks mainly about how the economy is shifting from a leveraging world to a deleveraging world.  Honestly this is something that should have happened much earlier in my opinion but people just couldn’t stop spending and still had that instant gratification mentality.  Well that’s about to change I think as people who are wanting to pay back debt are going to have a much harder time in a deflating world.  Check out the blog for more details.

A few key points I wanted to bring out in “What should you do in a deflating world?”:

  • Think hard before buying anything. Houses, cars and iPhones will be cheaper in six months. This is not the advice Ottawa or the Bank of Canada want me to give, but there it is.
  • Pay down debt. In a deleveraging world it just gets harder to lose.
  • Be liquid. Stocks, bonds, funds, cash — liquid. Houses, Porsches, cottages, locked-in GICs, condos — illiquid.
  • Deflation plus liquidity equals party. Deflation plus debt equals divorce.

Since November of ‘09 I’ve followed quite a bit of this advice which was given to me by my coach and mentor in life and I have to say it’s paid it’s self over MANY times.  I could not be happier that I’ve sold my condo (which I’ve seen prices have dropped $20K since I sold) and paid down my debts especially in how the market is and how it’s going to continue to get worse.  I highly suggest you look at your financial portfolio and what your debt situation is like and start making smarter decisions.  A lot of you are already in great positions but sometimes we can use a fine tune or tweak.  Just don’t use the financial advisors at Lindsay’s work! LOL

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