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Old 05-21-2019, 06:32 AM   #141
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Originally Posted by bizaro86 View Post
Every time I go to my bank (usually only if I need a draft or to modify a mortgage) they try to sell me one of two things:

A personal unsecured loan at a rate approximately double the rate they can see I have on my unused HELOC

A mutual fund that will structurally underperform due to institutional imperatives in management and high fees.

I think both would be equally hazardous to my financial health.
Lol, yeah well Iím not suggesting that people should go to the bank and it would be a good choice. I mean, Iím obviously biased in where I think people can get useful advice. But the truth is that for someone just starting out there are worse places than a bank. The important thing is to start saving, and while there are better or worse choice to begin this, saving somewhere is really the first step. Once you have a decent amount saved though, you can always move it elsewhere.
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Old 05-21-2019, 07:02 AM   #142
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The world is going to be a very different place in 30 years.
That's my line of thinking. In 25-30 years we're going to be hooped anyway. I have a LIRA and RRSP tucked away for retirement (and a DB where I'm currently at). I figure by the time I'll be looking at retiring we'll either be paying exorbitant amounts of tax to support basic income, "fight" climate change, or whatever the flavor of the day is then, and what I do now isn't going to make a bit of difference. Or we get hit with a worldwide health crisis and see a Spanish-flu style epidemic, and what I do now still doesn't make much of a difference.

Anyone who's 20-40 years away from retirement now, I absolutely do not see enjoying the same standard of retirement as today (retire at 55, buy an RV, snowbird 6 months a year, etc). So I'm very much of the mentality to travel, ski, bike, hike, whatever now while I enjoy it and can do it. While I won't go into debt to enjoy life now (outside of the usual mortgage/car payment), I'm not going to back-load my finances either.
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Old 05-21-2019, 08:12 AM   #143
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Funny - 4 years ago my wife and I were DINKS renting a good condo for CHEAP.

Now we have 2 kids, and are in a large house that costs almost double what the condo did - still saving ~60% of our take home however, and on track to hit our stretch target in the next couple years.

Have enough now to not worry about work/paychecks, and by 40 will have enough to last us till we die - will still keep working however, as it will get BORING to have nothing to do with kids in school
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Old 05-21-2019, 08:23 AM   #144
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That's my line of thinking. In 25-30 years we're going to be hooped anyway. I have a LIRA and RRSP tucked away for retirement (and a DB where I'm currently at). I figure by the time I'll be looking at retiring we'll either be paying exorbitant amounts of tax to support basic income, "fight" climate change, or whatever the flavor of the day is then, and what I do now isn't going to make a bit of difference. Or we get hit with a worldwide health crisis and see a Spanish-flu style epidemic, and what I do now still doesn't make much of a difference.

Anyone who's 20-40 years away from retirement now, I absolutely do not see enjoying the same standard of retirement as today (retire at 55, buy an RV, snowbird 6 months a year, etc). So I'm very much of the mentality to travel, ski, bike, hike, whatever now while I enjoy it and can do it. While I won't go into debt to enjoy life now (outside of the usual mortgage/car payment), I'm not going to back-load my finances either.
Ugh, as a pathological saver this is something I really struggle with.

I get genuine pleasure from deferred gratification when it comes to money, and often would rather look at taking a position in quality businesses than buying junk I don't really need. Still enjoy life and spend when it's appropriate, but really enjoy investing.

The problem is I see the same long term story, where the effort I'm putting into my finances now will simply be taxed away at rates we can only imagine to feed those who can't/won't properly secure their future. As someone who's not mentally wired to yolo money out the window, it's pretty frustrating to think about. I say all this as someone who honestly believes that healthy taxation is critical to maintaining our social fabric, just sucks to be saving and planning to feed and house those who are leveraged to the eyeballs with side by sides and toy haulers.

Quick edit, as there was no shade throwing intended in that post. I think the position you're taking is honestly the rational one given the likely outcomes, but as someone who's wired to "back load my finances" it's a troubling situation.

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Old 05-21-2019, 08:32 AM   #145
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Quick edit, as there was no shade throwing intended in that post.
Never thought there was but thanks for the edit. I was raised to be fairly financially prudent, which is the only reason I have any retirement savings to begin with - and I'm definitely not going to spend any of it now. It's why I'm aggressively paying my mortgage down and didn't go close to what the bank offered for a maximum mortgage in the first place. But seeing where we're heading over the past 5 years, and watching a few family members not be able to enjoy retirement at all, has rapidly changed my tune to somewhere in the centre.
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Old 05-21-2019, 09:09 AM   #146
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Is housing the best investment?

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Old 05-21-2019, 09:46 AM   #147
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Lol, yeah well Iím not suggesting that people should go to the bank and it would be a good choice. I mean, Iím obviously biased in where I think people can get useful advice. But the truth is that for someone just starting out there are worse places than a bank. The important thing is to start saving, and while there are better or worse choice to begin this, saving somewhere is really the first step. Once you have a decent amount saved though, you can always move it elsewhere.
Oh for sure, wasn't intending that post as a jab at you at all, and I found you very easy/straightforward/low-pressure to deal with when we bought our life insurance from you.

Just included the quote so it didn't seem like a total non-sequitur when I went on my "banks doing upselling" rant.
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Old 05-21-2019, 11:00 AM   #148
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I'm 38. I put 10% of my paycheque to an rrsp that my company then matches another 6%.

I could have paid off my house next year (10 years), but instead chose to use the money on 2 rental properties instead, and hopefully have my house paid off in 15 years. I know some here are arguing buying properties as maybe not the best investment in their minds, but I find it's what's working so far for me. I get rental income to pay off the mortgages on those properties, and then hopefully down the road I get some good equity from them, both from the rental income paying off the principle and the appreciation of the property several years later. Yes, there is work involved in getting and maintaining tenants, but there's no such thing as easy money. Everything takes work, so I don't mind it.

Edit: Just wanted to add, I think I'm saving ok for retirement. Unless something drastically changes, I don't expect to retired before 65 or even 70. And really, I'm not much of a traveler, so I probably won't be spending as much as normal people on travelling. I like travelling to an extent, I just don't get as much enjoyment out of it as most people seem to. I find the cost-to-enjoyment ratio of travelling to be lower than say if I spent that money on other things. But I'm just weird that way.

Lol, and I just re-read my posts from 4 years ago. I'm not saying I'm frugal or anything, I do spend money. I just expect myself to live till I'm 90 and want to make sure I'm not one of those guys who is old and struggling to get by. That kinda freaks me out. I don't know how reliable OAS and GIS will be in 30 years.

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Old 05-21-2019, 12:46 PM   #149
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is it worth it to have mortgage insurance?
I'm thinking no as I keep hearing it's a rip off, and people should cancel it and just get life insurance which likely will cost less.
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Old 05-21-2019, 01:10 PM   #150
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is it worth it to have mortgage insurance?
I'm thinking no as I keep hearing it's a rip off, and people should cancel it and just get life insurance which likely will cost less.

If your down payment was less than 20% aren't you required to have it by the CMHC?
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Old 05-21-2019, 01:13 PM   #151
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If your down payment was less than 20% aren't you required to have it by the CMHC?
I assume he is referring to the insurance you can buy that will pay for your mortgage if you were to die.

Generally I don't think its worth it but there are probably some cases it makes sense.
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Old 05-21-2019, 01:32 PM   #152
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I guess it depends. If your dependent(s) aren't working, then it could be a huge strain on them if something happens to you.

I've never looked into mortgage insurance since I'm by myself, and if anything happens to me, my estate can just sell all my assets and the money goes to my relatives.
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Old 05-21-2019, 01:50 PM   #153
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I assume he is referring to the insurance you can buy that will pay for your mortgage if you were to die.

Generally I don't think its worth it but there are probably some cases it makes sense.
You can get better premiums and coverage on Life Insurance, than the mortgage insurance products offered by lenders.
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Old 05-21-2019, 02:07 PM   #154
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is it worth it to have mortgage insurance?
I'm thinking no as I keep hearing it's a rip off, and people should cancel it and just get life insurance which likely will cost less.
My recollection was that the major banks offer this mortgage insurance pretty cheap and its no questions asked ... and no limitations on payout. I think this is good value if you have a large mortgage.
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Old 05-21-2019, 02:12 PM   #155
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As long as I don't get fired, and my DB pension doesn't implode, I should be fine. All of my own investment money goes towards maxing out my kids' RESPs, and I don't have anything left over for TFSAs, so hopefully my pension works out...
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Old 05-21-2019, 02:26 PM   #156
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is it worth it to have mortgage insurance?
I'm thinking no as I keep hearing it's a rip off, and people should cancel it and just get life insurance which likely will cost less.
My dad had mortgage insurance. He got cancer and died. The mortgage insurance saved my mother.
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Old 05-21-2019, 02:32 PM   #157
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My understanding is that Mortgage insurance covers the mortgage only.

As the mortgage is paid off, the benefit reduces.

Life insurance is a set amount for the entire term.

Take the life insurance, pay off mortgage and keep the rest.

Currently, I'm worth more dead than I am alive...
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Old 05-21-2019, 02:41 PM   #158
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Mortgage insurance is generally a bad deal. I can explain the full reasons for this, but near the top of the list is the idea that you’re basically insuring the lender as opposed to you and your family. A close second though is that a significant amount of claims are declined by mortgage insurers due to the underwriting at the time of the claim. So in layman’s terms, someone dies and then they decide whether they would have insured them. I know that sounds insane, but that’s how it works.

It’s far better to have your own, stand-alone life insurance policy. The costs are similar in most cases, but the coverage is far stronger and actually goes where you prefer and can be used as your beneficiaries see fit.
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Old 05-21-2019, 02:45 PM   #159
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My understanding is that Mortgage insurance covers the mortgage only.

As the mortgage is paid off, the benefit reduces.

Life insurance is a set amount for the entire term.

Take the life insurance, pay off mortgage and keep the rest.

Correct. I believe they are typically first to die policies that are expensive and never get cheaper despite the benefit value of your mortgage dropping. We just went through the process of changing to a life insurance policy that is half the cost of our mortgage insurance through our lender and actually pays out under much wider terms and leaves you with money left over as well.

As far as actual retirement saving goes, there is no one size fits all answer. You have to consider you and your spouses lifestyle goals, age, any type of pension you may have, CPP/OAS entitlements, property values and even inheritance. You want to prepare for everything, but at the same time, many many people die and never come close to using their savings because they followed a plan that didn't fit their wants and desires in retirement.
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Old 05-21-2019, 02:58 PM   #160
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Mortgage insurance is generally a bad deal. I can explain the full reasons for this, but near the top of the list is the idea that you’re basically insuring the lender as opposed to you and your family. A close second though is that a significant amount of claims are declined by mortgage insurers due to the underwriting at the time of the claim. So in layman’s terms, someone dies and then they decide whether they would have insured them. I know that sounds insane, but that’s how it works.

It’s far better to have your own, stand-alone life insurance policy. The costs are similar in most cases, but the coverage is far stronger and actually goes where you prefer and can be used as your beneficiaries see fit.
This is the correct answer. Main benefit of life insurance is that it is done on your terms rather than what the bank lays out.

My 2 cents: I purchased a house a while back and got roped into the bank mortgage insurance. I kept paying it for a year into the mortgage. After marriage, I purchased life insurance and called my bank and cancelled the mortgage insurance. The good thing was that it dropped my monthly mortgage payments a bit. I continued paying the old amount with mortgage insurance included with any amounts that would have gone to the insurance, now going towards paying down the mortgage a bit quicker.
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