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September 19, 2017 | The Better Way

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.

Why does T2 think it’s okay to gut TFSAs, create a new tax bracket and whack business owners? Because, politically, it is. The federal Libs are out to destroy the NDP (currently trying to pick a leader), so they can suck off the soft socialists and rule Canada forever.

It’s a plan. So far, it’s working. Step One is to create class warfare. The steerage section of this pathetic blog will attest to how great that’s going. Drenched in debt, laden with house and swimming in their own bad decisions, the deplorables among us believe the way they can get more is to ensure everyone else has less. And why not? It’s exactly the message of Bill Morneau.

“Too many people still feel as though the system is stacked against them. They work hard. When it comes to paying their taxes, they pay on time and in full. But there is a sense that some may be getting a better deal than others. It’s time for the next steps in our plan to bolster the confidence Canadians have in their Government and in their economy. And it starts by making sure that we all pay our fair share of taxes—with no exceptions.”

When asked what a ‘fair’ tax is, the answer’s always the same – one that somebody else pays. If they have more than you, it’s ever fairer. Now that home ownership has risen to 70%, people have borrowed $1.3 trillion in mortgages, and the savings rate has plunged, our leaders know the time is right to cause division and stoke envy. After spending nine years in the House of Commons and the backrooms on Parliament Hill, I know. Power comes first. Responsibility second.

But, despair not. This blog is here to empower you, not induce suicidal thoughts. That’s what Costco and Drake are for. So instead of thinking you can build yourself up by knocking someone else down (the Lib-NDP-Screwed-Millennial way), why not just advance? One great way of doing that is to invest.

On Tuesday the Fruit People, formerly known as Orange Guy’s Shorts, released the results of a survey showing just how beaten down most Canadians have become. Incredibly (it says) only 4% of Canadians have ever seriously considered opening an investment account. Why? Not because they fear losses, but rather since 70% of all these dispirited beavers believe they don’t have enough money to invest.

And here’s another report proving what a mess children make of people’s brains. Just out, it shows 53% of parents think their adult kids are dependent on them. Almost 40% will hand over house money to their spawn or finance college even when it means kissing off retirement.  “According to the results,” says the Financial Planning Standards Council, “assisting their ‘big kids’ with post-secondary costs will postpone the retirement of 45% of respondents and prevent 46% from paying off their debt.” By the way, guys (at 44%) are way more willing to put their kids into real estate than women (32%). So much for the nesting myth.

So why would having offspring – which people have apparently done for some time – be putting a “financial strain” on almost half of all parents? Why can’t people manage to have a job, raise a family and still have enough loot saved after six decades of life to stop working?

You already know.

Years ago when I was traveling the country speaking on behalf of financial dudes, banks and fund companies, the gigs took me everywhere. Glittery ballrooms. Church basements. One night I walked into a hall in a remote, dusty burg in southern Saskatchewan to talk to a few hundred dour-looking locals. The advisor sponsoring the event told me how much money she looked after. A staggering amount. “Huh?” I said, meaningfully. And she explained – in a place where real estate was cheap and debt sparse, people gave their money to her (after buying some new cows, of course). No retirement crisis there.

The cost of a one-strategy strategy is incalculable. Debt’s off the chart. House prices inflated. Families stressed. And if property values don’t hold, millions of wrinklies will be pooched. People who have relied on real estate only to build net worth must liquidate it at some point to survive. What a crap shoot that can be – as we’re learning. Without balance, diversification or (often) liquidity, risk ignites.

The sooner you stop fawning over house, believing politicians or caving to your kids, the better the outcome. Tomorrow, a small refresher course on the better way.

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September 19th, 2017

Posted In: The Greater Fool

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