OT: OT Thread Part 6: still got a new name faster than Seattle's team

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yukoner88

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Dec 16, 2009
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Down with Propane or down with Charcoal? Maybe protest against excessive lighter fluid usage?

I once lit myself on fire using too much lighter fluid to get a charcoal bbq going. Scared the crap out of an elderly couple running out onto the street frantically waving my arm around with my forearm as at was on fire
 
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doulos

Registered User
Oct 4, 2007
7,725
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It is hardly a new situation where people purchasing homes had to fight tooth and nail to make payments. This has been going on for decades or even centuries. It is still better to have equity into something that you own and if you get a fixed rate mortgage in time you will be paying less for your mortgage than you would a similar rental and by the end you will be much better off than renting. It sucks for your friends and I wish them the best on keeping their home, this is all too common in tough financial times.

You're right, people have made bad choices financially since the idea of finances became a thing!

The math on rent vs own is quite complicated though and there are many more situations where renting makes more sense than one might think. Once you add in property tax, home repairs, home insurance, the math gets murkier, and yes, you have money invested into something, but if you rent you could invest the extra money into simple index funds and earn a stable return as well.

Buying makes sense in certain markets, but there are lots of markets, where real estate isn't going to go berserk, where renting and using the extra to invest in other things, makes a lot more sense financially.

Now, there are reasons why someone might want to buy vs rent that are not financial of course (the freedom to do whatever you want with your property, and the stability of knowing that someone isn't going to sell the places and leave you in a situation where you need to move etc), but that's a different discussion.

It sounds like most of us in the discussion seem to agree that most of us suck with managing our money, which is why I am really ok with the stress test and think it could go even further along in protecting people from themselves.
 

Bryanbryoil

Pray For Ukraine
Sep 13, 2004
85,954
34,073
I once lit myself on fire using too much lighter fluid to get a charcoal bbq going. Scared the crap out of an elderly couple running out onto the street frantically waving my arm around with my forearm as at was on fire

There you have it, no to lighter fluid!
 

Bryanbryoil

Pray For Ukraine
Sep 13, 2004
85,954
34,073
You're right, people have made bad choices financially since the idea of finances became a thing!

The math on rent vs own is quite complicated though and there are many more situations where renting makes more sense than one might think. Once you add in property tax, home repairs, home insurance, the math gets murkier, and yes, you have money invested into something, but if you rent you could invest the extra money into simple index funds and earn a stable return as well.

Buying makes sense in certain markets, but there are lots of markets, where real estate isn't going to go berserk, where renting and using the extra to invest in other things, makes a lot more sense financially.

Now, there are reasons why someone might want to buy vs rent that are not financial of course (the freedom to do whatever you want with your property, and the stability of knowing that someone isn't going to sell the places and leave you in a situation where you need to move etc), but that's a different discussion.

It sounds like most of us in the discussion seem to agree that most of us suck with managing our money, which is why I am really ok with the stress test and think it could go even further along in protecting people from themselves.

I can't speak for where you live, but my grandparents bought their home for around $60K in the late 1960's. Today it's worth at least 10X that. Add to that that they haven't paid a cent of rent in 20+ years and haven't had any major repairs needed and I'd say that they came out pretty well having both come from poverty growing up to owning their own home and having some money in the bank.

Renting sucks IMO because moving sucks IMO. Now it's one thing if you can't afford to buy anything decent, as it's better to rent than buy an old condo that needs tons of repairs, special assessments, condo fees, etc. as a big special assessment could really screw over an owner that's barely scraping by.

I have never played the stock market but have family that do. Index funds sound very interesting based on doing a few minutes of reading about them. I assume that you've had success in them? Do you have to go through a broker to buy them?
 

doulos

Registered User
Oct 4, 2007
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I can't speak for where you live, but my grandparents bought their home for around $60K in the late 1960's. Today it's worth at least 10X that. Add to that that they haven't paid a cent of rent in 20+ years and haven't had any major repairs needed and I'd say that they came out pretty well having both come from poverty growing up to owning their own home and having some money in the bank.

Renting sucks IMO because moving sucks IMO. Now it's one thing if you can't afford to buy anything decent, as it's better to rent than buy an old condo that needs tons of repairs, special assessments, condo fees, etc. as a big special assessment could really screw over an owner that's barely scraping by.

I have never played the stock market but have family that do. Index funds sound very interesting based on doing a few minutes of reading about them. I assume that you've had success in them? Do you have to go through a broker to buy them?

The experience of our grandparents buying a home that they could afford, likely with one good income earner, living in it for 50 years, then making bank when then sold, is very common. But not attainable or realistic for most people in most markets these days. For many of these homes (in top markets particularly) you're either looking at a multi-generational family, or two really high earning professionals, who can afford these homes. I also find it surprising that they have not had any major repairs in 50 years, but perhaps it's what you mean by major. A rough estimate for expenses on home maintenance is 1% of the home value, though of course there are certain factors that will move that number around.

Yes, moving when you are a renter sucks, just like moving when you are a homeowner. You pay a premium to not have to move as much as a homeowner, but many people are moving quite a bit as well, seeing many of their hoped for gains in real estate getting chewed up my realtor fees and moving expenses. Most renters have smaller spaces and pay less when they move because they don't have as much stuff (and of course pay no realtor fees). You would have to move a considerable number of times compared to a homeowner to spend as much money. Being a homeowner might be more convenient, but you are paying a premium for it.

I am not saying it's always better to rent vs buy, or vice versa. Just that there are a lot of hidden factors in both cases that people don't consider. Most people compare rent to a mortgage payment and nod their head when the real estate agent says "And when you own a home you're investing that money in yourself!" as if it's that simple. The 1960s were 50 years ago. It's just not comparable any more.

Index funds are just a dead easy way to invest without ever trying to time the market. I won't go into why I prefer it as investing tends to bring out the nasty in people, but feel free to take a look at Couch Potato investing if you want to know what it's about.
 

Bryanbryoil

Pray For Ukraine
Sep 13, 2004
85,954
34,073
The experience of our grandparents buying a home that they could afford, likely with one good income earner, living in it for 50 years, then making bank when then sold, is very common. But not attainable or realistic for most people in most markets these days. For many of these homes (in top markets particularly) you're either looking at a multi-generational family, or two really high earning professionals, who can afford these homes. I also find it surprising that they have not had any major repairs in 50 years, but perhaps it's what you mean by major. A rough estimate for expenses on home maintenance is 1% of the home value, though of course there are certain factors that will move that number around.

Yes, moving when you are a renter sucks, just like moving when you are a homeowner. You pay a premium to not have to move as much as a homeowner, but many people are moving quite a bit as well, seeing many of their hoped for gains in real estate getting chewed up my realtor fees and moving expenses. Most renters have smaller spaces and pay less when they move because they don't have as much stuff (and of course pay no realtor fees). You would have to move a considerable number of times compared to a homeowner to spend as much money. Being a homeowner might be more convenient, but you are paying a premium for it.

I am not saying it's always better to rent vs buy, or vice versa. Just that there are a lot of hidden factors in both cases that people don't consider. Most people compare rent to a mortgage payment and nod their head when the real estate agent says "And when you own a home you're investing that money in yourself!" as if it's that simple. The 1960s were 50 years ago. It's just not comparable any more.

Index funds are just a dead easy way to invest without ever trying to time the market. I won't go into why I prefer it as investing tends to bring out the nasty in people, but feel free to take a look at Couch Potato investing if you want to know what it's about.

The cost of a home here has soared over the last 20 years, so you don't need to just look at the 60's until now for a good comparable. The average home here has probably gone up 300% in that time. When you are in a desirable location the prices really don't go down by much or some times at all even when the economy hits the skids.

Thanks for the tip, I'll look into it when I have time. Naturally if you make enough bank in investments you could always buy later if you so desire.
 

doulos

Registered User
Oct 4, 2007
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Housing costs are the issue though. You need to be a multigenerational family or a high earning DINK to get into a lot of these homes. Not feasible at all for huge numbers of people any more. Not like the old days where dad worked at the factory, mom stayed at home with the kids, and they could afford a home.
 
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yukoner88

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Dec 16, 2009
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The bubble might burst in a few areas though and that could bring some price corrections to the housing markets.

I heard some radio shows discussing this issue last week (I think it was Danielle Smith when I was in Calgary for a couple days) and her guest was saying Sept/Oct has a decent chance of a lot of people defaulting on mortgage loans because their EI n other government benefits run out then.
 

Fixed to Ruin

Come wit it now!
Feb 28, 2007
23,498
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Grande Prairie, AB
The bubble might burst in a few areas though and that could bring some price corrections to the housing markets.

I heard some radio shows discussing this issue last week (I think it was Danielle Smith when I was in Calgary for a couple days) and her guest was saying Sept/Oct has a decent chance of a lot of people defaulting on mortgage loans because their EI n other government benefits run out then.

Just as a guess, if there are still massive unemployment numbers at the end of the summer they will most likely extend those benefits.
 

yukoner88

Registered User
Dec 16, 2009
19,626
23,587
Dawson City, YT
Just as a guess, if there are still massive unemployment numbers at the end of the summer they will most likely extend those benefits.

they will most likely try to do something in an attempt to put off a sudden wave of foreclosures, but for a lot of people on those benefits, it's still only a fraction of what 2 working parents so they are still bleeding from savings and the government(s) can only bleed debt for so long too
 

Oilhawks

Oden's Ride Over Nordland
Nov 24, 2011
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44,415
Looks like Genworth disagrees with CMHC’s direction: Genworth says it has no plans to follow CMHC's mortgage tightening move - BNN Bloomberg

OSFI might still step in to tow the Feds line, but Genworth and Canada Guarantee won’t be following the mortgage tightening moves willingly.

Won’t get back into the anecdotal discussions above so much but will note that my anecdotal experience is that renting and being at the will of the landlord is not something I’d be willing to go back to unless my lifestyle necessitated a Bohemian outlook. Previously owning a condo was not ideal as well due to noise and privacy issues I endured. I agree that home ownership is not suitable everywhere (particularly many parts of the ‘old world’) and for every one. But if you plan to live in a city and set your roots down I don’t see the downside. Sure you have to spend a bit on maintenance but it’s an additional part of a retirement plan via equity instead of paying for someone else’s when renting.
 
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doulos

Registered User
Oct 4, 2007
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Looks like Genworth disagrees with CMHC’s direction: Genworth says it has no plans to follow CMHC's mortgage tightening move - BNN Bloomberg

OSFI might still step in to tow the Feds line, but Genworth and Canada Guarantee won’t be following the mortgage tightening moves willingly.

Won’t get back into the anecdotal discussions above so much but will note that my anecdotal experience is that renting and being at the will of the landlord is not something I’d be willing to go back to unless my lifestyle necessitated a Bohemian outlook. Previously owning a condo was not ideal as well due to noise and privacy issues I endured. I agree that home ownership is not suitable everywhere (particularly many parts of the ‘old world’) and for every one. But if you plan to live in a city and set your roots down I don’t see the downside. Sure you have to spend a bit on maintenance but it’s an additional part of a retirement plan via equity instead of paying for someone else’s when renting.

No doubt renting comes with some headaches. That's why you often have to pay a premium to own a home.
 
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doulos

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Oct 4, 2007
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Can we shut down that coronavirus thread please. I don't see how it leads to positive community here in any way.
 
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bellagiobob

Registered User
Jul 27, 2006
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Can we shut down that coronavirus thread please. I don't see how it leads to positive community here in any way.

Curious why you wouldn't just post this on the thread that you want closed? And why encourage a thread to be closed that you may not want to view, but others might enjoy? Wouldn't a simple solution be to not go to that thread if it bothers you? Or if there are posters there whose opinions bother you, then just put them on ignore. Cleans up the thread nicely.
 

Drivesaitl

Time to Drive
Oct 8, 2017
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Duck hunting
Curious why you wouldn't just post this on the thread that you want closed? And why encourage a thread to be closed that you may not want to view, but others might enjoy? Wouldn't a simple solution be to not go to that thread if it bothers you? Or if there are posters there whose opinions bother you, then just put them on ignore. Cleans up the thread nicely.

hes banned from the thread and trying to get the thread shutdown because he's banned from the thread. Gotta admire the consistency.

The poster in question was posting lots on the threads, when allowed to, which I guess were fine and conducive to community at that time.
 
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