Homeless in Toronto: Part Deux

Open House

Topic: Human Interest

Geoffrey J. Gouinlock CFA

May 1, 2018

Image used with permission: iStock/jsmith


Print & Share

Print

Homeless in Toronto: Part Deux

About this time last year, I wrote an article about the sale of our family home of 26 years and our decision to step away from the madness of the Toronto housing market and rent for a while (Crisis, What Crisis? Homeless in Toronto).

How smart I felt as the calendar rolled forward. In the opinion of many, we had monetized our home at the high. And although we weren’t moving explicitly because we thought we could trade the housing market, I was perfectly prepared to accept the congratulations from hither and yon who deemed us to be either lucky or far-sighted. Making the situation even better, Anne and I quickly rented a wonderful, updated home in the centre of the city where we could bide our time and wait for the housing market to crumble.

We sold in May and moved in August, entrusting the capital we withdrew to the best investment manager I know. They’re independent, service-oriented, smart and great value. We’ve been uncertain how much smaller a home we were looking for, and also a bit unclear in what neighbourhood we’d like to settle. But with time we knew the answer would present itself. Let me tell you, Saturday morning coffee tastes great as you collect your dividends and scan the papers, not looking at the slim listings, but instead reading the many stories of woe about declining home sales activity and weaker pricing. It was hard not to feel a bit self-satisfied at the decision we’d made.

Unfortunately, there was only one problem. In a most genteel, but direct, email our landlord notified us they were coming back from living abroad and wanted their house back. We need to be out in August. There’s an adage in the investment business that says, “You have to sell when you can, not when you want to.” I guess that’s the case in the real estate market as well!

So now we scan the papers looking at the slim listings wondering, do we buy or rent again? While it looks like prices are a little lower than when we sold, there’s nothing yet we’ve seen that we’d be excited about buying. And more worryingly, we’re not the only couple at this stage of life looking at rentals. Time isn’t really on our side. While I thought this spring would have weekends at the golf course, I expect now that we’ll be on the “Open House” circuit. Life can be so cruel.

In actual fact we’ll be fine. We have a good realtor working for us. My wife Anne is resourceful. And if worse comes to worst, we’ll be renting a nice place that we’re paying too much for. We’ll run up what politely gets called ‘friction costs’ and then amortize them over our future tenure at the home we eventually settle into.

Ironically, my tale of woe is remarkably similar to the discussions we have with clients. Sometimes there are disruptive surprises that upset a carefully crafted plan. Too often individuals underestimate their need for liquidity and have to sell at an inauspicious time in the market. Likewise, people expect that they can work for some fixed period of their choosing and sometimes sickness or job loss rears its head at a most inconvenient time. Its an easy mistake to make, as I’m discovering!

As you map out your own strategy for future financial independence. It’s best to have a plan, and its best to incorporate some allowance for unforeseen disruption. Use realistic return expectations and don’t fall into the trap of thinking you’ll be able to work forever. Returns and your ability to work are outside your control. While I may have lost any qualification to offer real estate advice, I can introduce you to my favourite investment manager that incorporates great planning into their service offering. GJG

More Like This...

See another CRM2 blog post that may be of interest to you.

CRM2: The Nexus Approach to our CRM2 Reports

Topic:
CRM2
Excerpt:
With changing securities regulations coming into effect, investment firms are now required to provide individual investors with specific additional in

More Like This...

See another Foundations & Endowments blog post that may be of interest to you.

Charitable Giving Made Easier

Topic:
Foundations & Endowments
Excerpt:
Giving to charities and supporting our community are important to us at Nexus. We donate a portion of our management fees back to the charities and

More Like This...

See another Human Interest blog post that may be of interest to you.

The Case for Openness – An Open and Shut Case?

Topic:
Human Interest
Excerpt:
From time immemorial, mankind has been open. Open to new ideas, open to trade, and open to migration – the three critical ingredients for progress.

More Like This...

See another Inside Nexus blog post that may be of interest to you.

Embracing the Golden Years: A Journey of Reflection and Wisdom

Topic:
Human Interest, Inside Nexus
Excerpt:
It was an otherwise slow mid-afternoon trading session on the “old” floor of the Toronto Stock Exchange at 234 Bay St. The dog days of summer had

More Like This...

See another Investments blog post that may be of interest to you.

From Vineyards to Portfolios: Cultivating Long-Term Wealth

Topic:
Investments
Excerpt:
My wife and I have been stymied so far this summer in getting to the Niagara region for our annual weekend of cycling through the vineyards and

More Like This...

See another Pearls of Wisdom blog post that may be of interest to you.

“Work, Work, Work, Work, Work, Work”

Topic:
Pearls of Wisdom
Excerpt:
This has been a busy year. I’ve had lots happening on the home front (a wedding!) and lots going on at the office (too long to list!) Managing work

More Like This...

See another Tax Planning blog post that may be of interest to you.

Saving in my Professional Corporation – It’s a Great Idea!

Topic:
Tax Planning
Excerpt:
The ability for professionals in Canada to incorporate their practice has existed for some time. Doctors, dentists, lawyers, accountants, and other

More Like This...

See another Wealth Planning blog post that may be of interest to you.

Dentists Get Their Financial Check-Up: Nexus attends the 2022 Ontario Dental Conference

Topic:
Wealth Planning
Excerpt:
In early May, we had the opportunity to attend the Ontario Dental Association’s (ODA) Annual Spring Meeting (ASM) in Toronto. Now in its 157th year,

On a Side Note…

See another CRM2 Nexus Notes Quarterly article that may be of interest to you.

No posts found.

On a Side Note…

See another Foundations & Endowments Nexus Notes Quarterly article that may be of interest to you.

Charitable Giving Made Easier

Topic:
Foundations & Endowments
Excerpt:
Giving to charities and supporting our community are important to us at Nexus. We donate a portion of our management fees back to the charities and

On a Side Note…

See another Human Interest Nexus Notes Quarterly article that may be of interest to you.

Worth 1,000 Words

Topic:
Human Interest
Excerpt:
A little humour makes the world a better place.

On a Side Note…

See another Inside Nexus Nexus Notes Quarterly article that may be of interest to you.

Where Have All the Boutiques Gone?

Topic:
Inside Nexus
Excerpt:
Many small, once independently managed, firms have fallen into the clutches of larger organizations such as banks, institutional money managers and

On a Side Note…

See another Investments Nexus Notes Quarterly article that may be of interest to you.

Don’t Worry, Be Happy

Topic:
Investments
Excerpt:
A recent article by David Brooks in The Atlantic magazine argues that, despite the heavy shroud of pessimism that envelopes most of our current

On a Side Note…

See another Pearls of Wisdom Nexus Notes Quarterly article that may be of interest to you.

Pearls of Wisdom

Topic:
Pearls of Wisdom
Excerpt:
Reading is one of the principal occupations in our profession. As we digest a wide range of material, interesting ideas and surprising facts – some

On a Side Note…

See another Tax Planning Nexus Notes Quarterly article that may be of interest to you.

A Nexus Feature on: First Home Savings Accounts (FHSA)

Topic:
Tax Planning
Excerpt:
The FHSA is a registered plan to help Canadians save for their first home and could play a role in either your or your adult child’s overall wealth

On a Side Note…

See another Wealth Planning Nexus Notes Quarterly article that may be of interest to you.

From The Editor: Planning for Long-Term Care

Topic:
Wealth Planning, Living to 100
Excerpt:
As part of our Living to 100 series, Nexus hosted a client event in June featuring guest speaker Karen Henderson, an expert in long-term care planning