Ceciltron posted:

It can be done, but won't be easy. My dad had a similar strategy in the 90s. He paid off a 25 year mortgage in 7 years. The secretary at the bank called him "Mr. Lump Sum".

Good luck!

EoRaptor posted:

The problem with early payoff now is that, if/when the housing market pops all the cash you put into a single asset disappears. With interest rates low, it would be better to diversify investments and carry the mortgage at its low rate. You can then decide later if cashing out investments to pay off the house is needed, or abandoning the house and taking the credit hit is going to provide more value.

On a very simplified level, it's foolish to pay back someone who is giving you money for less than the cost of inflation. They are, essentially, paying you to take that money and you should always keep this in mind. You won't see rates that low, of course, because banks take that cut for themselves, but you can still get very close to money being 'free'.

Running With Spoons posted:

Now, you can pay back the mortgage more slowly thinking you can get a better return on your cash by buying stocks rather than paying back your 3% mortgage/debt.
I think you should pay back your mortgage before investing much in bonds, especially government bonds.

EoRaptor posted:

You can then decide later if cashing out investments to pay off the house is needed, or abandoning the house and taking the credit hit is going to provide more value.

EoRaptor posted:

The problem with early payoff now is that, if/when the housing market pops all the cash you put into a single asset disappears. With interest rates low, it would be better to diversify investments and carry the mortgage at its low rate.

Cultural Imperial posted:

I'm just gonna leave this here.

Cultural Imperial posted:

LemonDrizzle posted:

Credit just got cheaper, so people can borrow more with lower monthly payments, so...

I am just waiting to see what CI does when the BoC starts deploying unconventional monetary policy.

Rime posted:

I hope we get a feeding frenzy, followed by people selling themselves into slavery in five years when interest rates spike to 10%+ and they can't afford to eat.

Rime posted:

I hope we get a feeding frenzy, followed by people selling themselves into slavery in five years when interest rates spike to 10%+ and they can't afford to eat.

etalian posted:

It's basically a fiscal plan inspired by the peggle ironicat:


The only cure for a credit bubble, is even cheaper credit and more irresponsible debt loading

quote:

Not content with the return of thousands of Hong Kong emigrants who have poured out of Vancouver since the handover, the SAR government now wants their kids, too.

The announcement by Chief Executive Leung Chun-ying in last week’s policy address that the overseas children of Hong Kong permanent residents would be able to apply for one-year visas to allow them to look for work in the SAR has the potential to escalate the westward flow. But will it?

Reverse migration is a phenomenon that has already seen the Hong Kong-born population in greater Vancouver fall by 14 per cent, from 86,215 in 1996 to 73,770 in 2011. Yet the exodus has been far more extreme than what census data suggests, since there were around 20,500 arrivals in Vancouver from Hong Kong in the same period.

In other words, about 33,000 Hongkongers departed Vancouver in those 15 years (including deaths). What’s more, arrivals are now a mere trickle - in 2013, there were only 383 new Hong Kong immigrants for all of British Columbia.

UBC professor Daniel Hiebert has been studying the flows between Hong Kong and Vancouver for years. “There are many places that have these kinds of plans now,” he said of the visa scheme. “It’s becoming more common for countries to work through their diaspora populations as a source of newcomers, particularly countries facing demographic issues [such as a low birth rate].”

Hiebert said it was “probably Japan” that first tried to tap into this group, seeking to attract ethnic Japanese whose ancestors had emigrated, mainly to Latin America. But the idea failed in many ways, primarily because such migrants often found it difficult to assimilate into a Japanese society with which they were unfamiliar and from which they felt “very detached”. “It was tough to integrate that population, and quite a few decided to move back to Brazil or wherever else they came from,” he said.

Hiebert noted that in the Japanese case, many of these migrants’ ancestors had left their homeland generations ago, so the situation was not exactly analogous to the Hong Kong government’s plan.

But similar cultural factors could come into play. Hiebert said a relative lack in proficiency in Cantonese could deter some children of emigrants from taking up the visa offer, as could a preference for Vancouver’s laid-back, outdoorsy lifestyle compared to that of high-density, high-intensity Hong Kong.

Nick So, a 29-year-old marketing strategist, moved to Vancouver from Hong Kong with his parents in 1990 when he was just four years old. He holds no Hong Kong residency, and thus could apply to the new scheme.

But the downside issues raised by Hiebert all resonate for So. He said he spoke Cantonese, but was not confident he spoke it well enough “to be successful in business. I’m not sure if there would be a language barrier, because my Chinese isn’t super-fluent.”

So said he and his girlfriend enjoyed a “kind of low key” lifestyle, and he liked his current job. “On a day-to-day basis, I think the hustle and bustle of Hong Kong might be too much for us,” he said.

Another downside consideration for So – one that was also raised by Hiebert - was the cost of housing in Hong Kong, the only city in the world with worse affordability than Vancouver.

Hiebert said he suspected that the bulk of the migratory flow from Vancouver to Hong Kong was over. “There may still be something left in the reverse flow, but I cannot see it happening at a colossal scale,” he said.

Yet the Canadian-born children of Hong Kong emigrants - as well as what he called the “1.5 generation” who left Hong Kong as very young children – continued to “scan the opportunities available for them, both here [in Vancouver] and there [in Hong Kong]”. “Typically, that group of people still has family networks in Hong Kong. Uncles, aunts, second-cousins, whatever. So they’ve got places to crash for a while, they can look around and survey the scene,” he said.

“Don’t forget that very large numbers of the Hong Kong diaspora in Vancouver travel back and forth regularly, you’ve got non-stop flights that are quite affordable, even on a student budget…and if you have relatives you can stay with, then life is quite easy, to make that jump over there. Either way, people will very quickly decide whether the pace of Hong Kong and the economy of Hong Kong appeals to them.”
Hiebert said that even if some Vancouverites do take up the visa offer, it may not have huge, long-term implications. “Maybe the plan works as intended. But with a highly fluid population you’ve got to worry about retention as well as attraction…these kind of policies are never massive, crashing successes.”

EoRaptor posted:

The actual ironic part of that statement is that, if the government pushed interest rates and the dollar down and drove inflation up along with actively driving salaries up through minimum wage hikes, you could actually inflate your way out of the housing crisis*.

Imports would be destroyed, but your exports (resources, manufacturing and services) might do pretty well.

It would require the government to acknowledge that the finance sector does not, in fact, drive the economy, so I don't think this is going to happen at all, but it is possible.

*You'd also need much stricter capital flight controls.

jet sanchEz posted:

My girlfriend paid off her condo in 6 years doing this as well, hard to achieve for many people as you have to live within your means.

Cultural Imperial posted:

Yeah I don't understand how people can live with themselves paying off bubble prices.

Not my loving problem.

quote:

People spend more when their friends and neighbors spend more. This isn't some fantastic new discovery made by a young economist. It's a dynamic we've known about basically forever. Many have called it "keeping up with the Joneses." But I've never liked that expression, because it summons images of insecure people trying to appear wealthier than they are. Peer influences would in fact be just as strong in a world completely free of jealousy and envy. And rising inequality has made those influences much stronger.

The median new house in the US is now 50 percent larger than it was in 1980, even though the median income has grown only slightly in real terms. Houses are growing faster than incomes because of a process I call "expenditure cascades."

Here's how it works. People at the top begin building bigger houses simply because they have more money. Perhaps it's now the custom for them to have their daughters' wedding receptions at home, so a ballroom is now part of what defines adequate living space. Those houses shift the frame of reference for the near-wealthy — who travel in the same social circles — so they, too, build bigger.

But as the near-wealthy begin adding granite countertops and vaulted ceilings, they shift the frames of reference that define adequate for upper-middle class families. And so they begin going into debt to keep pace. And so it goes, all the way down the income ladder. More spending by the people who can afford it at the top ultimately creates pressure for more spending by people who can't afford it at the bottom.

quote:

We spend too much on houses and parties because as individuals we have no incentive to take account of how our spending affects others. The tax system offers a simple, unintrusive way to change our incentives. We could abandon the current progressive income tax in favor of a much more steeply progressive consumption tax.

Here's how it would work: people would report their incomes as they do now, and also their annual savings, as many now do for tax-exempt retirement accounts. Their income minus their savings is their annual consumption, and that amount less a large standard deduction would be their taxable consumption. For instance, a family that earned $100,000 and saved $50,000 in a tax year would have annual consumption of $50,000. If the standard deduction was $30,000, the family's taxable consumption would be $20,000.

The tax rate would start out low and would then rise steadily as taxable consumption rises. Under the current income tax, rates can't rise too high without choking off savings and investment. But higher marginal tax rates on consumption actually encourage savings and investment.

quote:

My basic claim, in short, is that a simple change in our tax structure would enable us to put trillions of dollars a year to better uses without requiring painful sacrifices from anyone. On its face, this claim will strike most people as as implausible. Yet my argument in favor of it has few moving parts, and none of the premises on which it rests is controversial in the least. Everyone agrees that most income gains have been going to top earners, which has led them to build bigger houses. No one disputes that, beyond some point, across-the-board increases in mansion size don't make the rich any happier. Nor does anyone dispute that larger houses at the top have shifted the frame of reference that shapes the demands of those just below them, and so on, all the way down the income ladder.

Nor is there any dispute that the resulting financial squeeze on middle-income families has not only made it more difficult for those families to pay their bills, it has also made it more difficult for governments to raise revenue. And that, in turn, has led to a decline in the quality of infrastructure and public services. So despite their higher incomes, the rich are now worse off on balance. Their higher spending on cars and houses has simply raised the bar that defines adequate in those categories, while the corresponding decline in the quality of public goods has had significant negative impact.

The encouraging news is that the profoundly wasteful spending patterns caused by rising income inequality could easily be changed. But that's unlikely to happen until our political conversation begins to focus on inequality's practical consequences.

Cultural Imperial posted:

http://www.reddit.com/r/vancouver/comments/2t5cd5/an_alternative_to_the_hellish_housing_costs_in/

This loving "tiny house movement" cracks me the gently caress up.

Build equity in a 40k outhouse with strata fees. Good job doing the math there hipster mark carney

MickeyFinn posted:

Not that I want to build equity in any housing at the moment, but some of those tiny houses have neat features.

MickeyFinn posted:

Not that I want to build equity in any housing at the moment, but some of those tiny houses have neat features.

Cultural Imperial posted:

I'm guessing that thing is 100sqft. That's $400/sqft. C'mon man

Lexicon posted:

I'm increasingly coming around to the view that it's imprudent not to buy at this point. When it all goes pear shaped, the abstainers are going to look like the proverbial sheep alongside two wolves who are jointly voting on what's for dinner.

No, I'm not buying in. Don't worry

MickeyFinn posted:

Not that I want to build equity in any housing at the moment, but some of those tiny houses have neat features.

Franks Happy Place posted:

This is exactly where bear traps come from FYI.

etalian posted:

what does he do with the pots of poo since it doesn't have a main sewage line?

PC LOAD LETTER posted:

$900/month lot fee + $40K price for a glorified trailer/shack on wheels by a sewage treatment plant vastly overshadows any neat features though.

Lexicon posted:

I increasingly don't think Canada will have a housing correction; instead the medicine will be taken in other ways to ensure that it won't happen.

Lexicon posted:

And if it means beggaring the currency, torpedoing the health system, vastly increasing the debt - you name it, then so be it.

etalian posted:

what does he do with the pots of poo since it doesn't have a main sewage line?

PC LOAD LETTER posted:

Many said the same thing about the US bubble and there was a correction anyways despite drastic steps to stop it. You haven't really gotten to the drastic steps stage yet in Canada, they're still just lowering the interest rate a bit at a time and hoping for the best. Its when they start doing stuff like mortgage moratoriums, 'can-kicking refis' that they know won't work out but keep up hope and a family in the house for a year or 2 longer a la HAMP/HARP that you'll know they're really getting desperate. But all that probably won't happen until the price drops become so obvious even the news and RE agents can't deny it any longer.

on the left posted:

Lol, 40k on a piece of poo poo mobile home and then pay rent for the land. He is literally throwing his money away on both rent for land, and the money spent on a depreciating piece of poo poo structure.

Cultural Imperial posted:

This is your friendly reminder that lots of people got rich as gently caress in 2009, 2001, 1998, 1987 etc, etc