This blog

Just who’s this blog for, anyway?

Days ago I wrote a boring piece about how to sue non-registered investment accounts (it’s hard to make them sexy), prompting a few comments in this vein: ‘who the hell has enough money to fill their RRSP or a TFSA, let alone use one of those?’ And from Vancouver (where else?) came this: “The blog post reads like a guy who is trying to dig further into the pockets of current investors. Now that you’ve maxxed out you sheltered account, just give me the rest! Commission, commission, commission…”

In my day job I don’t collect commission, of course. It’s banned at Turner Investments as a total conflict of interest. (If your advisor’s taking money from some company whose products are in your portfolio, then who can you trust?)

But that’s not the point. Let’s ask it again – who’s this site for? Why do I come here six days a week to leave 750 pathetic words? In that vein, I read with interest this comment posted yesterday from a guy in Nanaimo:

“Been reading this blog for a very long time. I agree with most of the advice given here. However, I have often wondered given the fact that so many Canadians do not have savings nor pensions and buy a single asset and live pay check to pay check. Why you insist on a balanced portfolio and rent. Who can afford that? Should your advice not be for the millions in trouble rather than the few with balanced portfolios?

On another note I do find this blog disheartening at times, you keep,saying the world has faced many crises in the past and we have survived. And yet you continue to write about a housing melt down. I think one post you indicated up to 30% of Canadians will be underwater as housing declines. And you wrote 60 or 70% of Canadians live pay check to pay check.
In conclusion can this really end well? The world has more debt then anytime in history. We have no collective savings, the housing market in Canada has more debt than our GDP. And yet you call us vain in worrying about today and focus on long term?

I am not saying run out and buy gold nor keep thousands in the mattress but the debt can never be paid off without a default or run away inflation.

Every newsletter I read except yours predicts a recession in a year maybe delayed because of the election how deep no one can predict, but will throwing money out of a helicopter save us next time?”

Doug Rowat answered this correctly by stating corrections are brief and bull markets are long. History is certainly a guide, showing us that investors who think short-term, rush into rising assets, bail out in a storm or fail to be balanced and diversified usually get squished. The lesson we preach here maybe be pedantic and hectoring but, dammit, it’s correct. Recessions are forgettable interludes in the sweep of a lifetime. Don’t get bent out of shape, or ever think it’s different this time. It isn’t.

The larger question is the nature of this blog. Elitist? First worldish? Written for the 1%ers?

Maybe so, at times. Guilty as charged. In order to successfully invest money, after all, you’ve gotta have some. To use RRSPs for tax-shifting, to earn dividends or capital gains, stuff TFSAs with the best assets, or slice taxes and income-split with a non-reg account, yeah, it takes capital. And Nanaimo dude’s right – most people don’t have any. The stats oft quoted here don’t change much. Half of us would be screwed if we missed one paycheque. A third of folks 60ish have zero retirement savings. Household debt is off the charts and still rising since the majority of Canadians are borrowing from the future and living beyond their means.

But stop to think. Why is that?

One reason is real estate. That’s why it’s so often a topic here. Canadians have adopted a one-asset investment/financial/retirement strategy laden with risk. They leverage themselves incredibly to buy what they cannot really afford. They fall for the cult of ownership, when renting might be a far better option. People think paying off a mortgage is the Holy Grail even when that means retiring without enough cash flow to live on. It’s an obsession. Housing is a drug. And many people should never own any. A property correction – destined to come – will be an ugly event for countless families who put all their eggs in a single basket.

Second, money illiteracy. They don’t teach kids how to finance a life. Parents pass on their own loser bad habits. TNL@TB preys on naiveté and misplaced trust. Mutual fund, RESP and insurance salesguys (the ones who thrive on commission) sell high-cost products and slip away into the void. This blog tries to open eyes, lay out options, and does it for free.

Third, most people confuse investing with gambling. It’s fatal. They get a few extra bucks, flip a few stocks, get crushed and never invest again. They know nothing about balance, diversification, exchange-traded funds, or investment vehicles like real estate trusts, corporate bonds or preferred shares. Tax knowledge is even more abysmal. And, sadly, Millennials – the most uber-schooled gen ever – are total rubes. The two assets of choice for moisters are GICs and condos. Say no more.

So there’s a reason this blog does what it does. It isn’t to rationalize bad behaviour, or just give tummy rubs for showing up. Sure, some rich people come here, leave insufferable, entitled comments and pretend they’re geniuses. But ignore that. They still put on their pants one leg at a time.

The point here is to help those who want it. Who need it. Nobody made you click. But you did. So roll over.