Rogers is trying to start a bank. Based on their current practices, here’s what I expect:
The money that was in your account last month is gone. Deal with it.
You want a bank account? Please choose between the 24 month and 36 month options. With our 36 month option, your debit card is FREE.
You’ve decided that Rogers Bank isn’t for you? An early termination fee of 30% of your balance applies.
You’d like to have the same plan as your friend? We’re sorry, but that plan isn’t available anymore. If it were, you still wouldn’t qualify because of some arbitrary condition. But our other, less attractive plans are available.
Travelling abroad? We’re excited to offer our new Travel Packs, giving you 80% off our posted rates. Debit transactions are now just $27.50/transaction when travelling abroad! The savings just keep piling up!
Your Rogers Bank account comes with a $1,000 monthly purchase limit. Should you exceed your limit, an overage fee of $2.00 for every $1.00 spent above $1,000 will apply. Please refer to the formula below to calculate your fees.
Ducati Superbike EVO 848 Stealth. Time to increase my life insurance coverage.
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Read the first post in my series Buying A Condo - Fun Facts About Ottawa Real Estate.
Calculating what you can afford is a tough exercise. On one hand, you want the best deal, and on the other, your eyes are bigger than your stomach.
One of the best visualization tools I’ve ever run across is the New York Times’ Rent vs Buy Calculator. I strongly encourage your to try your own scenarios after reading below.
First, I had to decide what I wanted:
This meant that I’d be spending around $350,000 + closing costs. Yikes. Prices have skyrocketed to nearly $500/sqft for a small place in downtown Ottawa.
My current place is a 2 bedroom, 1000sqft apartment for around $975/month. Living in the ghetto has its advantages. It’s also nicer on the inside than on the outside (twss).
The NYT calculator tells me that there’s no way I should stop renting given my current situation. In fact, I’d be substantially better off continuing to rent.
But, I want to increase my standard of living. To get this, I’d have to rent a condo from someone else at around $1600/month.
Again, it’s actually better for me to rent unless I stay in the same place for the next 22 years. Chances are this won’t happen.
Let’s assume for a moment that I hit the real estate jackpot. This means:
To clarify, I don’t believe this will happen. But it outlines the choice one is faced with today.
As you can see, after the second year I’m making money hand over fist. You’d be stupid not to buy. But wait…
What happens if real estate takes a turn for the worse? People already stretching their affordability are mercilessly squeezed by ballooning mortgage payments, or forced to renegotiate into substantially longer terms.
Even a 1% annual market retraction leaves this once sound “investment” at a significant disadvantage over alternatives investment vehicles. Setting aside the rule of thumb that real estate always appreciates, this presents a sobering scenario.
Proceed, with caution. The goal is to increase my standard of living while maximizing wealth. Real Estate may be the first answer, but not necessarily the correct one.
I’m looking to buy a condo in Ottawa. I haven’t purchased one yet, so this is an “as it happens” series of posts.
As a practicing geek, computer scientist, business person, and anal retentive, I have a process:
This post is about the fun facts I’ve learned:
Ask a broker, agent, condo company or anyone else in the industry if you should buy and their answer is always “yes”. Most of my initial conversations have went something like this:
Me: ”I’m thinking it’s time to finally buy a place, but I’m just looking at the moment.”
Rep: ”That’s a brilliant idea. You must be an astronaut you’re so smart. It’s a great way to build equity and wealth. Have you selected a property yet?”
Me: ”No, I’m just developing an understanding of the market.”
Rep: ”Well you should definitely buy a property. This is a beautiful investment property and our amenities are superb. We’re also offering a cash-back incentive so you can start building your equity right away.”
On the surface, the words “equity”, “property”, “amenities”, and “investment” give most people the feeling that they’ve already started down the path to financial world domination. In most situations, that couldn’t be further from the truth.
Interest rates are historically low. They’re also artificially low. The global economy went down the crapper in 2007 when US banks played hot potato with subprime mortgages (mortgages that for all intents and purposes should have never been awarded to people who simply couldn’t afford them). Today the cost of borrowing is next to nothing.
Source: tradingeconomics.com
Interest rates will rise again. When they do, people who took on too much “leverage” will find their “investment” is really a “liability”. My advice would be to take today’s interest rate, increase it by a few points, and use that in your affordability calculations.
Canada’s monetary policy aims to keep inflation at a target rate of 2%. But, the average MLS sale price has increased an average of 7.4% each year for the last 10 years.
There are various attempts at explaining this, including:
Whatever the reason, simple economic theory dictates that real estate cannot continue to outpace cost-of-living salary increases in perpetuity. Assuming that your property will continue to appreciate forever is a fallacy. It has to be, or no one on earth will be able to afford it in the future.
Ottawa presents an interesting dynamic in the real estate market:
Look out for future posts “Calculating Affordability: Rent vs Buy” and “The Best Condo According To Math”.
Eames, Flipboard, “Where Good Ideas Come From”, Reasonable Doubt on vinyl. These are my friends tonight. (Taken with instagram)
It’s not hard. Call your credit card company and have them add a US address to your account. For example:
Hi. I travel quite a bit to the US. My phone carrier requires me to have a US credit card to set up an account. Can you add a second address to my VISA? The primary/mailing address will remain my Canadian address. Thank you!
Then, just sign up on the Netflix US site*.
11 seasons of Law & Order SVU, you are mine.
*requires US VPN. There are lots.
Steve talking about a digital revolution 10 years ago (Taken with instagram)
Ninth row at WWDC! (Taken with instagram)
#WWDC Keynote bumrush (Taken with instagram)