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ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

August 15, 2016 | Obsession

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

DOG DOOR

“Another one?” she said, as we walked Bandit the hound through the park, listening to my cell ring. “Turn it off.”

I didn’t, of course, knowing Dorothy understands I’m completely devoid of any personal balance. That’s for people who hate their jobs. And Millennials, of course.

But this was a day full of them. Calls from juiced twenty and thirty-somethings from Vancouver to Calgary and Halifax, all wanting me to take their little piles of money and turn them into heaping big piles so, like Firecracker and Wanderer, they could stop working long before any gray hair appeared or the first tat started to sag.

Being relentless little media hounds, tireless self-promoters and reasonably irritating juvenile 1%ers, F&W are former blog dogs who have ascended into stardom. After saving madly, living on air, and investing their five hundred grand (with me), these guys ended up claiming to be the nation’s youngest retired millionaires. They quit their bank jobs, traveled the world, wrote a book, got bored and started a Millennial Revolution site which has now been discovered by reporters tired of writing stories about unrequited house horniness.

The fact Firecracker and Wanderer have eschewed real estate in favour of an early idleness, and are actually of Asian (!) heritage, has turned a lot of newsroom cranks. Without a doubt, you’ll be hearing more of them, as you did yesterday when the CBC ran this story, then did a video piece on the national news.

K&B

But back to Bandit, the park and my phone.

It rang a lot. All kinds of people from all kinds of places were in touch with me because (of course) I can double people’s money without any risk while they sleep. Piece of cake. Missing from the media report was the fevered level of saving these two crazed beavers exhibited as I worked with them, the way they Hoovered up every scrap of cash from every source and jammed them into their portfolio ETFs, the insane budgeting they engaged in and the fact they lived on less than the average lichen. Yes, their portfolio did well. Yes, they never pulled back in corrections or got greedy during surges. But it was the totality of the obsession with becoming millionaires at age 30ish that actually got them there.

My callers? Not so much. The liquid assets among 35-year-olds who have been working for seven or eight years is breathtaking. There aren’t any. Instead, all the cash has gone into lifestyle, a soul-sucking condo, or repaying student debt. The kids basically have no idea what an RRSP is, or an ETF, and equate a TFSA with a high-interest savings account at the bank. Investing in a financial portfolio seems to be the fall-back, defeatist position after you’ve failed to live up to your mom’s house lust. In a society drenched in real estate porn, the message of these two rock star iconoclasts, that money – not property – is true wealth, is somehow revolutionary. Weird. But there it is.

Well, as nauseating as Firecracker and Wanderer can be, it’s exactly the message that needs to be broadcast. In an age of peak house, shoveling your cash into a dead-end condo or staggering under an epic mortgage for a slanty semi held together with bug spit, is not a strategy. It’s a financial death sentence. Once markets turn (and they are) real estate can become illiquid and depreciating while the debt placed upon them doesn’t shrink by a single dollar.

So, no, I don’t create millionaires out of latte-sucking entitled kids craving retirement and work-life balance. Stop calling.

$ $ $

Now that we all know Vancouver is pooched, here’s the latest update from housing analyst Ross Kay, brought to you without edit or comment. Looks like the dude called this one.

“Our call that August would be the month where negative sales would be recorded for Vancouver and that that decline could set off the chain of events that would years later be cited as the Tipping Point for Canada`s Housing Bubble popping has arrived.  It looks like we were on point after CREA`s press release today.

“I am not going to go into a long discussion on Peak Price and why it happens two times in every Trading Cycle other than to explain in Vancouver Peak Price was recorded for Trade Up Buyers in February of this year. Canada reached its peak for Trade Ups in May and odds are Toronto hit its in that same month.  Vancouver in the days since, as of Mid-August, is now off a staggering 26.4% but everyone in Vancouver believes home prices rose in July because that is what CREA told everyone and they all believe it.

“Fortunes are lost and won in a single Trading Cycle and Vancouver is already showing how much damage can be done in only 5 months.  Sadly for those who listen to CREA it will take another 7 months before you hear the real truth and by that time much of the damage will already be done.

“I encourage every homeowner in British Columbia and Ontario to seek out some honest advice on their home owning situation.  That advice cannot come from a real estate agent.  Sure I am biased but then again no one else told you Vancouver would be reported negative in August, in the same month when CREA said sales were up a staggering 17% year over year.”

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August 15th, 2016

Posted In: The Greater Fool

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