# How do you start investing?



## lisalisa (Jul 11, 2011)

Hi, 

I'm new here. My name is Lisa and I live in Vancouver... I recently was given a $100,000 in inheritance from my grandparents. I am in my early 20's and currently rent a small basement suite. I recently looked into buying a condo and was told I qualified for $290,000 (minus the down payment). Vancouver is not an a easy place to buy real estate, so I'm hoping that this inheritance would allow me to buy a decent starter condo. I'm looking to buy under $350,000, but would prefer to find something as low as I can so I have more to invest. 

Is this the right way to look at the situation? Or should I care more about my future real estate purchase? For me, I'm just looking for something comfortable with a good resale value. What else should I get into? I do have low risk investments from my RRSP... 

Thanks for your time on helping me! Sorry if the questions are really basic... I'm super green to this, but with the way the market is, I'm hoping to gain as much insight as possible.


----------



## rd_aaron (Jun 24, 2011)

Whatever you do, don't buy real estate. Vancouver is the most overpriced city in North America right now. Real estate can't go much higher as people can't afford the outrageous prices (average single family home is something like 12x annual family income). If mortgage rates go up (they will) and the value of your property goes down, you'll be under water in a hurry.

My suggestion: Take your $100k to a financial advisor and have them manage it for you.


----------



## Andre112 (Apr 27, 2011)

I don't know about your income, but locking yourself in a mortgage payment isn't a pleasant thing to do, especially if it takes out a big chunk of your income. Sure, paying mortgage is building equity but there are sacrifices to be made and things to be cut our from you life. First step is make sure that you can still live an acceptable life while paying mortgage.

I bought a home 3 years ago and currently have 130K of mortgage. This is how I feel about owning a home.

If you don't buy a house and keep renting, the money can be used for other investments and generate income or growth. There are charts of renting vs buying you can find online to help you decide as well.


----------



## Causalien (Apr 4, 2009)

Definitely don't go for a house, especially in Vancouver.
Lock it in something for 5%. Basically, wait for a year before you do anything about it. 

Use some type of stock simulator to try and invest. This will take time and patience. It's like getting a university degree.

Or, you can just spend it all like most people.


----------



## Sherlock (Apr 18, 2010)

With today's low interest rates I would not put a 100k downpayment on a condo. Instead your money invested in a safe well diversified balanced portfolio could generate you a return much higher than the low interest rates you'd be paying with a VRM or even a 5 year fixed. I would put the minimum downpayment required to avoid mortgage insurance and invest the rest. Actually I wouldn't buy real estate in Vancouver at all right now since it's in a bubble.


----------



## dentist101 (Feb 11, 2011)

i'm a new investor here too 

what i've learned over the past 6 months or so is that we're in a very strange (and potentially dangerous) situation with real estate in canada. interest rates going up for sure, housing at it's record highest peak in history, and an maxed-out-on-credit country makes alot of people think that real estate is a terrible investment right now (read garth turner's blog "the greater fool", along with tons of other blogs out there dedicated to current real estate). 

the posters on here are mostly pretty sharp people. you'll get varying views on what to do, but they all have a bit of wisdom in them. get as much advice as you can, weigh your personal situation, and be cautious if possible. don't make a rash decision. you're young, and that is a considerable amount of $$$. don't listen to your friends and don't look at what everyone else has done. it's possible that alot of people could be in for a shock (remember what's happening in the usa). while you're wondering what to do, research....talk to an advisor (or two, or three...), go to banks and see what they offer. look into how to start a diversified, well-balanced portfolio. 

but, whatever you do, don't compound your current situation by simply following the herd and buying real estate. ESPECIALLY IN VANCOUVER!

good luck!


----------



## financialnoob (Feb 26, 2011)

There's no real one single right way to move forward. Some of the things that should be factored in are what you're currently doing, where you want to be, and what your life goals are. Depending on goals and time frames, that can greatly impact how you proceed.


----------



## Belguy (May 24, 2010)

Find yourself a fee-only financial advisor who charges you for his or her time but who does not receive compensation of any form from the investments that he or she recommends to you.


----------



## MoreMiles (Apr 20, 2011)

dentist101 said:


> but, whatever you do, don't compound your current situation by simply following the herd and buying real estate. ESPECIALLY IN VANCOUVER!
> 
> good luck!


With all respect, you live in Prairies as suggested in your signature line. So you may not know about Vancouver. It's all about China. Rich Chinese immigrants do not pick a prairie province to move to. They pick Vancouver.

There is a dramatic increase in rich-poor gaps in China. The lucky ones in China have found "special" ways of making millions if not billions! Rich ones get extremely rich. Some of those money-making techniques are questionable. Many rich people want to pay to get a second citizenship in case of things falling apart.

Canada is the top choice. It used to cost about $400,000 to qualify for investment immigration. Right now, the minimum asset is $1.6 million! 

http://www.cic.gc.ca/english/immigrate/business/investors/index.asp

and

http://www.artoncapital.com/a/arton...or-program-re-opens-on-december-1st-2010.html

Yet there are still too many Chinese businesspeople applying! They had to close the program temporarily because of the demands. The minimum will soon raise to $2 million. Most people cannot imagine that kind of asset! Well, in this case, there is not enough immigration space for those multi-millionaire to join Canadian citizenship.

These people have a massive amount of cash that need to be spent. They need to make their cash balance less traceable. So what do they do? They buy real estate investments.

So Vancouver and Toronto real estate was raised because of these foreign asset. Think about it! Would anyone in regular working salary qualify for a mortgage of $1 million to buy a house? You need to have an income of $300,000 per year to qualify.

Why Vancouver you asked? It is only a 10 hour-flight instead of 20 hours to the east coast. The husband stays in China to operate his business and the wife and kids live in Canada to qualify for their citizenship. They get the citizenship after doing 3 years of "immigration house arrest". They keep flying, nicknamed "spaceman" during the period of immigration. Then they move back to China like those from Hong Kong in the 1997 moving back in early 2000's. Now it is China mainland's turn.

So the value of house in Vancouver does not depend on the mortgage interest rate any more! All those were bought in foreign cash. It makes no difference if the mortgage rate is 10% in Vancouver. The market would only crash if those immigrants decide to shift their assets elsewhere.

My opinion for Vancouver real estate... ignore interest rate. Look at inflow-outflow of foreign purchases. Go to some open houses and see it in action with your own eyes.


----------



## Sherlock (Apr 18, 2010)

So basically what you're saying is that all the Chinese people moving to Vancouver are criminals who stole money and need to hide it?


----------



## Argonaut (Dec 7, 2010)

I say that the number of rich Chinese people moving to Vancouver is irrelevant. The question is, would you be getting fair value for real estate in the lower mainland compared to other things you could acquire? I'd rather have $100,000 invested in good dividend paying stocks, earning $4000-$5000 per year in income. Once the principal grows to a cool million, you're set for life.


----------



## dentist101 (Feb 11, 2011)

"With all respect, you live in Prairies as suggested in your signature line. So you may not know about Vancouver. It's all about China. Rich Chinese immigrants do not pick a prairie province to move to. They pick Vancouver"

@ moremilies - ok, so i need to live there to see how ridiculous vancouver is getting? just because i'm in the prairies doesn't mean that i don't understand fundementals. so, lemme get this straight...chinese investment alone is going to keep the real estate market going all by itself is what you're saying. the fact that homes there cost 12x income and interest rates have no where else to go but up, doesn't really mean anything, because the chinese are going to infinitely pump $$$ into vancouver real estate. wow, keep up with that theory, and lemme know how great RE is in a few years! things don't stay up forever. what goes up must come down. fundementals rule out over time. real estate in vancouver is not funded by chinese $$$, it's funded by cheap debt and greed! just like in toronto and just like the states 3 years ago. when things don't add up, you gotta take a step back and look at the whole picture. i'm pretty sure that the government will not be letting things go on like this forever (like you said, chinese investment rules are getting tighter), if that is even what is holding up these retarded prices.

i'm a 34 year old dentist with no debt, living well within my means, and i can't afford to buy a house in vancouver (wait, i could afford it....if i wanted to become house-poor)....i think there must be something wrong with that picture. when did $1 million become so little amount of money? fundementals aren't there to just make small-talk about, they actually mean something. 

go ahead and believe that vancouver is going to be different that everywhere else. i think it's gonna dive. greed and entitlement attitude is gonna kick alot of people in the a#$!


----------



## donald (Apr 18, 2011)

Vancouver was voted as the best city to live in(2011)in the world,its a international city,vancouver is different,immagration,economy,landscape,ect.

Hong kong is the new wave that is entering,1 million dollars in terms of the wealthy is not very much,i dont think you would lose your shirt if you bought in downtown vancouver.

Vancouver is where the "money'' is now in canada,there business climate is unmatched too,vancouver is not like alberta,toronto,ect...there a different situation in terms of immigration trends,there is also a fair amount of ex pats in vancouver.

They might have a soft patch but i doubt real estate will drop very much in the next decade,if there is one city in canada that will hold up it will def be vancouver.


----------



## MoreMiles (Apr 20, 2011)

dentist101 said:


> when did $1 million become so little amount of money? fundementals aren't there to just make small-talk about, they actually mean something.


Since QE1 and QE2... haven't you heard? The rich has become a lot richer. $1 million is nothing any more. It's called inflation.

Anyone with a detached house in Richmond (Vancouver) or Richmond Hill (Toronto) is a millionnaire. There are hundreds if not thousands of them out there.

This was written a couple of months ago... after the QE2 became full force.

http://www.cbsnews.com/stories/2011/03/15/business/main20043280.shtml

The definition of "rich" is $7.5 million. So most people are only in middle class.

Many private investment firms do not even take clients unless they have $10 million in asset. You can call Goldman Sachs Canada, Toronto office, ask them... the first question they will reply, "sir, do you have $10 million dollar to invest?" Don't believe me? Call them... http://www2.goldmansachs.com/worldwide/canada/index.html


----------



## Causalien (Apr 4, 2009)

For Vancouver RE watch China. Even though the percentage of HAM are so little compared to the local's with their huge debt load, sentiment needs to be taken into consideration as well. 

here are many facets in this deal that have yet surface to proper news channels. You can only know for sure if you do business with HAM. If anything, the Chinese are very good at math and there's just no way of completely blocking them from their desire to throw money at you... if they desire so.

Vancouver is only at the 2nd year of the mass immigration, so many problems have yet to surface. We'll be hearing more at the 5 year mark I believe.


----------



## dentist101 (Feb 11, 2011)

"Since QE1 and QE2... haven't you heard? The rich has become a lot richer. $1 million is nothing any more. It's called inflation.
Anyone with a detached house in Richmond (Vancouver) or Richmond Hill (Toronto) is a millionnaire. There are hundreds if not thousands of them out there"

@moremiles - i get what you're trying to say about the expanding gap between the rich and the poor in the usa (and possibly here as well), but QE1 and QE2 was 4 years AFTER housing started to get retarded in canada (~2005). these stimulus packages just floated alot of $$$ into the hands of the rich, i agree. what i'm talking about has EVERYTHING to do with easy credit...the fact that anyone with a pulse can leverage themselves to the max, get granite countertops in a nice home, get a 30-40 year mortgage, and push up housing so that the average guy needs to give his left nut to have a house anymore. the desparity between income and home prices pisses me off to the max. if i didn't mind debt, i would be ok with it, but i don't. i realize that debt is not a good thing at all, especially due to the possible global volatility coming in the near future. 

and it's not only vancouver that i am talking about, although it is so grossly obvious in vancouver that it's a perfect example. even saskatoon and regina are way overpriced right now. i'm not sure what financial situation you're in, but you almost sound proud of the fact that housing is where it's at. 

you mentioned that there are tons of "millionaires" out there in the toronto area, due to the valuation on their house. first of all, i don't consider someone a millionaire unless they can liquidate that net worth. alot of people can brag that they are millionaires, but let's see what happens if/when real estate dives (it has before, and it will again). Cash is king baby! show me someone with 7-figues liquid, and i will be impressed. so bloody what if your house is supposedly worth a million. that doesn't impress goldman sachs canada either, unless you take out a HELOC and invest with them. yes, i agree that there are a lot of wealthy people out there, but take a look at the usa and see where net worth has gone since 2008 ---> down about 25% almost completely on real estate. Vancouver is a different situation because of a bunch of factors, i will agree with that, but it is not immune to reality and fundementals. time will tell, i guess.


----------



## Abha (Jun 26, 2011)

Dentist has a point. When I worked in private banking we would consider someone a HNWI (High Net Worth Individual) if their assets exceeded a certain monetary amount exclusive of primary residence.


----------



## MoreMiles (Apr 20, 2011)

@dentist - I agree with you that easy money has become a major problem in today's economy. It really penalizes the savers. With 0.5% saving interest, they are forcing everyone to place their assets in stock and real estate markets. It encourages people to borrow beyond their means.

In the case of an inflation, your $500,000 mortgage is not that expensive any more. If a cup of coffee like Starbucks can cost $10... then you have two choices, either absorb this inflation yourself or let the bank take it. Cash is probably not King here. You lose 5% of buying power (I don't believe the 2% government number) every year. *Since your debt does not go up with inflation, it is to your advantage to incur this debt so the bank pays for such inflation in my opinion.*

I get discouraged when I see these house and land owners, selling their house for millions of dollars, more than any one can make in the same time frame.

If I bought a big house in 1980 in Vancouver and never worked again since, I would probably have more money today when compared to working full time without a house in the same time frame! 

Then there is the Chinese immigrant factor raising the price as I have mentioned previously. So I think Vancouver price is just the beginning. Look at Hong Kong and China, they had to add extra transfer taxes to stop real estate investors.


----------



## MoreMiles (Apr 20, 2011)

Sherlock said:


> So basically what you're saying is that all the Chinese people moving to Vancouver are criminals who stole money and need to hide it?


Not necessarily criminals... but people who get their business contracts because of insider info / bribery, etc. It's like Berkshire Hathaway Sokol insider scandal. It's not "illegal" but very unethical.

Have you visited Walmart, seeing those "made in China" items? Now think about the business owners of those product factories! For every product there, you would have probably 5-10 rich Chinese executives (CEO, CFO, COO) making millions in ONE DAY. Now take all the number of products (ie, thousands) and multiply by the number of Chinese business owners. 

Even the Americans are talking about bail-outs from China to help Europe and everyone else. Their growth has simply been too massive in the last few years!

Now where do these people want to move? Europe? No... Canada of course. Where? Vancouver. They wire-transfer money in 8 digits! Then buy houses in cash. You get the idea.

Some reference:
http://www.hellovancity.com/2010/06...ouse-hunting-on-vancouver-vacation-itinerary/

http://vancouverspaces.com/03/vancouver-realestate-housesforsale/


----------



## Causalien (Apr 4, 2009)

LOL,

You can't wire money out of China. It's illegal.

You can however, use one of the black markets and suffer a huge conversion rate that's probably higher than 20% over spot and that is the only way. You do not want the legal route even though USD to RMB has begun trading, because then, the government can and will track your money. It also tells all the thugs and gang bosses that you are about to flee the country. Which means a hit will be contracted on your head.

On the funny side, if you are into making some quick bucks. Marriage contracts to bring over a mainlander nets you $30000. Obviously, if you have nothing to lose, it's a good deal. I don't suggest anyone with any equity to try it.

Please get these facts straights people so you can make better financial decisions.


----------



## maltson (Jul 12, 2011)

All these responses seem to have deviated from the original question that the OP asked. While there will be endless debate about the influence of the chinese investors, if they really are coming in and acquiring $2 mil in assets I doubt they are going and buying 8-10 individual units in the the price range that the OP was thinking of buying, they buy upscale apt, townhouses etc. Thus I wold contend that the people who are buying in the 200-350,000 range are not cash investors but younger people with very serious mortgages (relative to their earning potential) who could be very exposed if things don't go their way. Having said that if you look at real estate forums, people have been warning about the imminent collapse of this bubble for 5 years, and yet house prices have continued to rise.

And so to the OP: You won't find definitive full-proof solutions. You need to look at what's best for your situation. For instance do you currently pay rent? If so how does it compare to how much you would be paying per month on the rest of your mortgage including strata fees and land taxes? How quickly can you reduce the interest, meaning how much can you afford to pay per month above your interest payments without crippling yourself financially? And how would that be affected by changing interest rates? How long would you realistically want to live in that apartment. Your young, so what happens if you get a job offer in another city or even country? If you think to rent it out after a period, be aware of the tax implications. 

I don't say all this to try and daunt you, I recently went through a very similar decision and realized there are so many what ifs involved. I found setting up a fairly straightforward spreadsheet that can quickly calculate interest payments, based on current or future interest rates, changes in the amount owed depending on what you pay per month and your down-payment. Also it was worth adding a column based on what that money would become if it was left earning 5% instead of being invested in a house. Be aware that leaving it to earn interest can incur taxes where as paying of a mortgage doesn't. But this spread sheet can can give you a better idea of how investing in a property would affect your situation specifically. It helped me. and you have time to consider all options don't rush one way or another too quickly

Anyway sorry for being long winded, I hope this helps.


----------



## Abha (Jun 26, 2011)

Causalien said:


> LOL,
> 
> You can't wire money out of China. It's illegal.
> 
> ...


Is this true? I certainly hope not. What about the financial institutions that are in China but HQ'ed elsewhere?

I know the Chinese have an oppressive regime but I didn't know it was this bad.


----------



## Causalien (Apr 4, 2009)

Dunno. They just started getting a foothold last year. Suffering I am guessing since USD RMB only just started trading. Even BAC have to combine forces with CCB instead of opening their own branch.

The way to do business in China is, you partner up with someone there. They get a cup of your tea and if they don't like you, they can just basically steal all your equipment over night, move across the street and steal all your workers.


----------



## Square Root (Jan 30, 2010)

i tend to agree with the dentist. Even if the Vancouver market is propped up by wealthy Chinese, they aren't stupid. If they think prices are dropping or will drop, they will stop buying for a while. Prices will really drop fast then. It has happened before and will again. i heard the TD bank is now predicting the Vancouver market will drop by up to 15% over the next 2 years. seems reasonable to me.


----------



## dentist101 (Feb 11, 2011)

@moremiles - ok, i can understand your arguement, and can respect it, but i'm not really sure that i agree with the logic of using the bank's $$$ to let them take the inflationary hit. i'm a saver, and i do realize that this is not a great time to invest conservatively. but i do still believe that things will fluctuate, and that basic frugal living, saving, and balanced investing (not having huge mortgage compared to your income) is still the best way to go. you almost make it seem like being a saver and avoiding consumer debt is for suckers. i understand the power of inflation, but when we are talking about Real Estate specifically, i'm not sure that inflation is really the issue. inflation has grown at a normal rate over the past decade (if you don't include RE prices). real estate has gone buck-wild, not following any real pattern or fundementals (ie. supply and demand), basically IMHO due to cheap $$$. this is why i'm leary of RE currently, as well as a bit irritated that i "missed the RE boat", so to speak. 
we have to remember that we are experiencing a one in a lifetime RE market currently. we're at record highs all over canada. we are also at record low interest rates. it's a very interesting (and kinda scary) time to be an investor. 
my only advice to the OP is that she take her time to understand that this MAY be an abnormal time with the RE market. she has the opportunity at her age to get quite far ahead if she makes some sound decisions. she also has a chance to put herself into a pickle if, for instance, she over-extends herself and gets underwater if RE decides to dive. i'm no expert, and the debate can quite heated when it comes to RE in vancouver, but i just think that it's risky, that's all. what do alot of successful investors say - "do the opposite of what the herd is doing"....and the herd is going into debt and buying housing like there's no tomorrow. just my 2 cents.


----------



## Abha (Jun 26, 2011)

This is directed to Dentist.

Just curious how you and your peers are faring in this economy? Has business been affected significantly?

Just curious.


----------



## dentist101 (Feb 11, 2011)

@abha - as far as i know, things haven't missed a beat. i work short-term contracts as a locum dentist, and the demand for my services is great. there is still a very good patient:dentist ratio in most places, third party insurance is still going strong, and most dentists can still make a fantastic living simply doing bread and butter things (ie. fillings, extractions..). we are in no where near the situation like the usa. if i quit my contract today, i could have 20 opportunities by next week, as long as i'm not picky where i'm going. of course, cities are far more competitive than smaller centers, but things are still good. there have also been statistics that the boomer dentists will leave a big hole to fill (no pun intended), and we won't be saturated for a while. 

i don't "sell" dentistry, so there will always be a demand for my services. if associate positions ever got scarce, then i would simply buy my own practice in a smaller center and settle down there. not to brag, but this is a very, very good profession from a freedom, lifestyle and business aspect. i stumbled upon it, by good luck not good planning.

on a different topic of how many dentists are treating our profession as a liscence to print $$$, putting business principles over patient needs, and acting as a corporate entity rather than a caring health care provider.....no comment! ha!


----------



## lisalisa (Jul 11, 2011)

maltson said:


> All these responses seem to have deviated from the original question that the OP asked. While there will be endless debate about the influence of the chinese investors, if they really are coming in and acquiring $2 mil in assets I doubt they are going and buying 8-10 individual units in the the price range that the OP was thinking of buying, they buy upscale apt, townhouses etc. Thus I wold contend that the people who are buying in the 200-350,000 range are not cash investors but younger people with very serious mortgages (relative to their earning potential) who could be very exposed if things don't go their way. Having said that if you look at real estate forums, people have been warning about the imminent collapse of this bubble for 5 years, and yet house prices have continued to rise.
> 
> And so to the OP: You won't find definitive full-proof solutions. You need to look at what's best for your situation. For instance do you currently pay rent? If so how does it compare to how much you would be paying per month on the rest of your mortgage including strata fees and land taxes? How quickly can you reduce the interest, meaning how much can you afford to pay per month above your interest payments without crippling yourself financially? And how would that be affected by changing interest rates? How long would you realistically want to live in that apartment. Your young, so what happens if you get a job offer in another city or even country? If you think to rent it out after a period, be aware of the tax implications.
> 
> ...


I currently live in a "basement suite" paying minimal rent to my parents. It's not private by any means and I'm looking to venture off on my own now. 

I started working right away after high school and was able to pay off my education (went correspondence and night classes) and save a little money. In just a few years, I was able to save a bit over $20,000 and with this additional inheritance... I want to make sure I am making the right financial decisions. 

I'm debating between my "wants" to get out of my parents basement vs. whether it is realistic. I recognized that my driving force is because I feel I want some independence, but I definitely am not tempted to the point of making bad decisions. 

In the next year or so, my parents will need to downsize because of some extended family drama. This leaves me in a position of having to move... I looked at rent and rent is comparable to a mortgage payment. Living in Vancouver can cost up to $1500/one bedroom condo. I would much rather be paying off my own mortgage rather than someone else. 

If I were to purchase a place, I would purchases it well below my qualifying price. I currently make a decent salary in the $60,000 range. I also do PT work (I write and consult in marketing) which could range from $1000-$1500/month extra income. But projects come and go, so I don't rely on my PT income. 

I was told that I qualified for $290,000 minus the down payment. I would likely look just outside of Vancouver (if I cant find anything in my price range). I believe my monthly payments (without strata fees and property taxes) would be $1100. I wanted to accelerate my payments, but that could mean an additional $100 every 2 weeks which I'm not sure I want to do that. The kind of places I'd be comfortable purchasing would have a -$2000/year property tax since it won't be anything over $320,000. 

With my $100,000 inheritance, I'd use less than 30% for the downpayment and invest the rest. If an emergency happens, I have about $20,000 saved in my savings and hopefully the $70,000 or so left that I have invested will grow. 

I don't have debt. I own my car... and really don't have many expenses outside of my cell phone.


----------



## Smoothie (Jul 11, 2011)

Lisalisa

You have a huge gift from someone. It can take many years of work to accumulate $100K. Use it wisely.

I second the wise poster who suggests you take your money to a financial adviser and have it invested. Rent, work, save and wait. Do not accumulate debt. Read and learn. Enjoy your twenties, and pretend the money ain't there. 

Make sure you get an ironclad prenup if you hook up with someone - that's your money, not anyone elses. 

Try a model portfolio from the Canadian Couch Potato site if you want to do it on your own. 

Read Garth Turner's blog at www.greaterfool.ca to understand where Vancouver real estate is going - or at least get a good sense of the argument. Many people will tell you that it's the worst possible place to put $100K right now.

Just my $0.02


----------



## blin10 (Jun 27, 2011)

dentist101 said:


> @moremiles - ok, i can understand your arguement, and can respect it, but i'm not really sure that i agree with the logic of using the bank's $$$ to let them take the inflationary hit. i'm a saver, and i do realize that this is not a great time to invest conservatively. but i do still believe that things will fluctuate, and that basic frugal living, saving, and balanced investing (not having huge mortgage compared to your income) is still the best way to go. you almost make it seem like being a saver and avoiding consumer debt is for suckers. i understand the power of inflation, but when we are talking about Real Estate specifically, i'm not sure that inflation is really the issue. inflation has grown at a normal rate over the past decade (if you don't include RE prices). real estate has gone buck-wild, not following any real pattern or fundementals (ie. supply and demand), basically IMHO due to cheap $$$. this is why i'm leary of RE currently, as well as a bit irritated that i "missed the RE boat", so to speak.
> *we have to remember that we are experiencing a one in a lifetime RE market currently. we're at record highs all over canada. we are also at record low interest rates.* it's a very interesting (and kinda scary) time to be an investor.
> my only advice to the OP is that she take her time to understand that this MAY be an abnormal time with the RE market. she has the opportunity at her age to get quite far ahead if she makes some sound decisions. she also has a chance to put herself into a pickle if, for instance, she over-extends herself and gets underwater if RE decides to dive. i'm no expert, and the debate can quite heated when it comes to RE in vancouver, but i just think that it's risky, that's all. what do alot of successful investors say - "do the opposite of what the herd is doing"....and the herd is going into debt and buying housing like there's no tomorrow. just my 2 cents.


it's at record high for a reason, look at New York, USA is still in a recession and their housing market is crazy over there.... in my opinion, any big city will always have demand for housing, therefore prices will not fall by a lot... I remember people been talking about housing bubble for a least 5 years and price went higher, now if prices will go down by 10-20% it will still be way above what it was 5 years ago.... and you will NEVER catch bottom or top prices


----------



## Eder (Feb 16, 2011)

Garth Turner is a perma bear trying to capitalize on the uninformed fears. Yes...real estate might go down (correct) in major cities, but he wants you to go buy bullets for the upcoming Armageddon.

He was a conservative but got booted so wanted to run as a Green Party rep but then tossed those politics to join Dion and the Liberals. He failed at this as well, so obviously became a financial adviser.

btw he was very bearish still on May 2009 , and obviously missed all the profits that astute investors made. I feel sorry for his followers but perhaps there will be a bull market in canned food in the future.

In the mean time Alcoa posted bullish results so his tinfoil hat is likely to start costing him more.

(sorry...this guy makes me sick)


----------



## KaeJS (Sep 28, 2010)

Eder said:


> I feel sorry for his followers but perhaps there will be a bull market in canned food in the future.
> 
> In the mean time Alcoa posted bullish results so his tinfoil hat is likely to start costing him more.


All I have to say is... LOL


----------



## Causalien (Apr 4, 2009)

Lisa you are still young so I strongly recommend that you at least invest some of them by yourself to learn the ropes. 20% self directed investing and 80% fort knox type safe interest income would be good. Ask around for what to do with that 80% and come back to this forum to double check whether or not that's sane. 

As for rent vs buy, well, I guess you'll never know how free it feels to be renting until you've been bound by a real estate asset at least once.


----------



## Causalien (Apr 4, 2009)

Eder said:


> Garth Turner is a perma bear trying to capitalize on the uninformed fears. Yes...real estate might go down (correct) in major cities, but he wants you to go buy bullets for the upcoming Armageddon.
> 
> He was a conservative but got booted so wanted to run as a Green Party rep but then tossed those politics to join Dion and the Liberals. He failed at this as well, so obviously became a financial adviser.
> 
> ...


His math was perfect. It echoed with mine, the rest is a lesson in how a bubble progresses. His denial of HAM's presence, I don't agree with. It's probably something that's not well tracked by official stats. 

I had a condo, that increased by 10% per year for 3 years. When I sold, after tax+repairs+maintenance+mortgage+commies I netted zero. I even got on the management board so I could cut costs to the bone. That's when I said good riddance to the worst type of asset I've ever owned in my life.


----------



## Square Root (Jan 30, 2010)

I agree it's better to be paying a mortgage rather than rent. Only downside is when the market corrects(as it probably will) and your downpayment dissappears. On the other hand if you wait a year or two you can get a a better place for the same money. Mortgage rates may be a little higher granted.


----------



## Eder (Feb 16, 2011)

Well anyway I think Garth is wrong again...here's a link to someone actually in the real estate business and not the book writing/screw old people business

http://ca.news.yahoo.com/developer-sees-housing-boom-around-corner-121627022.html


----------

