Most days here at the ol’ FU machine, we do the same old thing. I talk about finance stuff and you kids pull up your proverbial chairs and gather round, just waiting to be wowed by the wonderful pageantry that is Nelson.
Either that or you’re dicking around at work in an attempt to forget about your crippling existence for a little while. Got a little real there, didn’t it?
A blog is kind of like a hot dog factory. You never know about the background, likely for good reason. All you get to see is the delicious tube-shaped product when it’s finished and you’re about to stick a six inch dog in your mouth. Be gentle with it. Anyone who puts it all in at once is just showing off.
So let’s do something a little different today. Let’s take a closer look at how I make the magic happen. Allow me to take you for a personalized tour of the hot dog factory, Nelson’s desk.
Picture it up, yo
Oh God Nelson that’s disgusting. An energy drink?
Relax, it’s empty.
I don’t think you really understand my criticism.
So let’s start at the beginning. This high quality office you see actually costs me money.
The story goes something like this. I got back from South Korea and was deciding whether I’d take writing seriously or get a job and continue writing on the side. After applying for all of one job that semi-interested me, the choice was pretty clear. Typos and all, Nelly was going to double down and become a true professional writeer.
That typo is intentional. I’m not that big of a hack.
I quickly realized writing at home wasn’t going to do it for me. It was depressing not leaving the house for days at a time. I missed human interaction. My wife made me cook dinner. And most importantly, I really needed to put on pants and go to work. The psychological boost of leaving the house is a huge deal for me.
I started going to coffee shops and grocery stores to write, but that got old quickly. I’d run into people I knew or they’d just be too damn noisy. Coffee shop internet will do in a pinch, but it’s not really that good.
So I decided to rent an office. After viewing a half dozen different offices, I chose the one in the picture above for a few different reasons, including:
- It’s located in a mall, which gives me a physical location for private mortgage clients to pay me
- I liked the free option for opening up a retail store, although after more than a year here I still can’t think of anything I’d want to open
- The rent is a terrific deal for what I’m getting
- There are other people around who I can talk to
- Snacks and energy drinks are close by
My desk basically sits in the corner of a retail space that’s approximately 400 square feet in total area. I use maybe 100 square feet. There’s another ~200 square feet in the back, too.
Here’s the view from the other side.
As you can see, there’s plenty of room for me to stretch my legs. I’ve thought about opening a co-working space with my extra area, but my landlord isn’t really in favor of subletting and I am cripplingly lazy. I’m also not exactly sure how much demand there would be. Solopreneurs don’t really end up in my boring small town.
Anyhoo, onto the desk itself.
Let’s start with the two monitor setup. If you’re a writer, it’s an absolute godsend. You can research on one monitor while keeping the other open to your work. It makes everything go that much faster and smoother.
Ron Swanson currently guards one of the monitors, and Bender will soon be guarding the other. I left him at home. He’ll be standing right where the Subway cup is.
The MacBook pro exists for two reasons. I use it almost exclusively for email and tweeting, and every now and again I’ll drag if off with me when I do somewhere. I will need to replace the cord soon for the second time, which I don’t intend on doing. It will get replaced by a PC laptop sometime soon, probably in 2017.
My papers are always a bit of a mess. On the left is the least high-tech system ever for keeping track of stuff I want to write about. The large notebook has ideas for Motley Fool and other investing topics I want to cover, while the smaller one has all the ideas for this here blog.
I own the Texas Instruments BA II Plus Financial Calculator which is the only calculator any serious finance type needs. You can figure out things like depreciation, amortization, and compound interest on it, although I usually just use online calculators for a lot of those things. Still, it was only $30.
Off to the right is a printer and file cabinet, which actually get used. More than once. I went with the printer that could scan stuff because that’s nice to have every now and again.
You might have noticed the pair of shoes under the desk. They’re off most of the day. The only time I really put them on is when I go somewhere. The rest of the time I walk around in my socks.
And finally, let’s talk about the chair. I spent $170 on that chair (regular price, $249) and it was the best money I ever spent. If my ass could talk, it would probably just say things about my bidet and that chair over and over again.
As evidenced by the previous pictures, I don’t have much up on the wall. In fact, my wall only has two things on it, my business licence and my pictures.
The two bottom pictures are of my wife. I decided to take these pictures out because the last thing I need is to be yelled at. The other two pictures are of my cat, who only yells at me in cat language. Besides, cats don’t use the internet.
Let’s talk more about the picture of Warren Buffett, which I got at the Berkshire Hathaway annual meeting for a buck. Warren looks down on me, making sure I don’t make any dumb decisions with my capital. Charlie Munger is on the other side, and periodically I might turn it around so Charlie is looking down on me.
Best dollar ever.
And that’s really about it. It’s not the most glamorous desk, but hey, it sure beats one of those standing desks. Nobody likes those things.
Let me begin this article by reminding you kids that I think Canada has a massive real estate bubble and it should be something that concerns us. Back in 2012 I even went as far as shorting Canada’s banks (using options) as a way to bet on this. This investment didn’t go well.
And if you read my stuff over at Motley Fool, I’ve probably written at least a dozen articles in the past year alone pointing out various concerns about the market. I firmly believe anybody investing in Toronto or Vancouver real estate is setting themselves to lose a metric assload of money. That’s more than an imperial assload, btw.
I also that we should be doing things to attempt to pop this bubble, and to their credit, governments have been trying. Mortgage insurance has become more and more strict as the years have passed, although many still believe it’s far too lax. Certain cities have set up land transfer taxes to make buying all the more expensive. And apparently even banks are getting in on the act, slowing lending to markets they feel are overvalued.
Oh, the restraint.
And yet, even though all those changes were implemented to make it harder for folks to buy property, the two big markets are like my rockin’ dance moves, refusing to quit. What gives? What was happening?
For many observers, the blame rested at the feet of one group of people, and that’s the damn immigrants. They felt the same way Moe Szyslak felt about the immigrants. Take it away, Moe.
Oh man Frinkiac is my favorite thing ever.
So they reacted in a very predictable way. After years and years of getting upset that rich Chinese and Middle Eastern folks were showing up and making houses unaffordable, British Columbia passed a special 15% foreign buyer’s tax on any property in the province not purchased by Canadian citizens.
The many problems with the foreign buyer’s tax
For an issue that governments have apparently been studying for years and years, the B.C. government sure did botch the passing of this bill.
The biggest mistake made was making the bill effective immediately. When the foreign buyer’s tax was passed, it was passed with no implementation period. That means even if a foreign national bought a house three months before and was set to close on it in a couple days after the bill passed, these folks would be forced to pay the foreign buyer’s tax.
Put yourself in that person’s shoes for a minute. You decide to make a decision that involves spending the better part of a million bucks. Everything is going fine and then all of a sudden some bureaucrats sign a bill and you’re looking at an extra hundred grand that you have to pay. You’d raise all sorts of hell, and rightfully so.
It’s not that governments can’t change the rules, because of course they can. But they have to change the rules in a fair way. That includes not making people who entered into a transaction in good faith pay tens or hundreds of thousands in a tax they never agreed to.
A seller can’t go back and demand extra cash from a buyer in the middle of a transaction. They’re bound to that contract. Governments should follow the same rules.
Why are we targeting foreigners?
I’ve heard all the arguments, and they all have a variation of the same theme. Foreign money pouring into Canada is the reason why house prices are so high. Vancouver is dominated by Chinese money, while Toronto has been a haven for Middle Eastern oil cash.
There’s a certain amount of truth to that, I’ll admit. I’ve been to both Vancouver and Toronto, and it doesn’t take a genius to see how multi-cultural both of those places are. It’s obvious foreign money is propping up real estate markets in those two cities.
But at the same time, Canadians are playing a huge role in prices in those cities as well. So many otherwise smart people are putting all their eggs in the real estate basket, buying a place before they feel priced out of the market forever. Low interest rates are helping landlords buy up supply that gets rented out for peanuts. And population growth to both centers is robust as tens of thousands of Canadians move to the largest centers each year.
In other words, foreign buyers are the tipping point, but we’ve done most of the heavy lifting ourselves.
One of the great things about Canada is we have a free economy. Americans, Brits, Chinese, or anyone else is free to invest in our market, own a company, or buy real estate with very few limitations. Hell, you can even buy your way into Canada (Quebec only, but still) for the low cost of $800,000 and a net worth of $1.6 million.
We roll out the welcome mat for foreigners when its convenient for us and make them the scapegoat when we decide they’ve taken advantage of the rules. We’re happy to accept their money when it suits us and then we slam the door shut (and disparage the crap out of them) when they have the audacity to want to invest in our country.
And yet, with more and more anti-children guys like me out there, Canada is going have to rely heavily on immigration to grow our economy and pay for our massive social obligations.
It comes down to this. Canada has done all sorts of things to make buying houses easy for the average family. Mortgage default insurance is (relatively) cheap and banks regularly give 25-year old borrowers loans of 20 times their original investment with nobody batting an eye. Millions of Canadians feel they have a right to buy an affordable home in our most popular markets.
And yet when foreigners want a piece of the same action, we think it’s okay to slap a foreign buyer’s tax on them and only them.
Ultimately, I do not believe putting restrictions on foreign cash is a way for an economy to get ahead. If we want to cool down certain housing markets, we should do so by putting the same rules in place for everybody.
Us here at Financial Uproar (me and my 52 helper monkeys) are no fans of retiring super early.
There are a number of reasons why. First, I LURVE money, and want to make more of it. I see no reason to stop doing so early. I’ll just go do something else if I get bored.
I also think taking our hardest-working and most motivated employees from the workforce in their prime working years isn’t good for anyone. Somebody with FU money is far more likely to stumble upon something truly remarkable than the guy who is 14 different kinds of screwed if he gets fired. The wealthy guy can afford to take a few risks; to try and create something worth creating. The poor guy is going to play it more safe than a Mormon on prom night. ZING HE’S STILL GOT IT.
But, alas, no matter how much I shout, y’all don’t care. I know very reasonable people who insist on hanging up their proverbial skates right when their working lives are about to get really interesting. HOW DARE THEY DON’T LISTEN TO ME. I ought to murder them all…with love. And axes.
While most of us don’t have the desire to permanently stop working in our 30s, I think many of us would like the freedom to change jobs, take a year or two off, or be able to start a business without worry. I know I went from working for the man to self-employed, and it was terrifying. Let’s not talk about how many times I wet myself.
So rather than retiring early, allow me to propose another option.
I can’t take much credit for the originality of this idea. Tim Ferriss came up with it before me, and he probably ripped it off of somebody else. I’m pretty sure the first guy who came up with the idea was Benjamin Franklin, but keep in mind my research skills are about as through as a 7th grader throwing together a last-minute homework assignment.
The concept is simple. When working, save your ass off. Create that huge savings rate everyone is always talking about. And then when you inevitably get tired of your job, quit it without hesitation. I’d recommend not playing your boss’s head like a bongo drum on the way out the door, but hey. I’m not your mother.
At that point, you’re free to do whatever you want. Fancy a trip to the French Alps? Go ahead, Captain Pretentious. Want to start your own business? Feel free to work really hard before throwing up your hands and getting a real job. Wife about to have a family? Cool beans. Somebody’s going to have to get yelled at.
And so on.
The whole key is what happens next. After taking a few months or even a year or two to recharge your batteries, it’s time to get back to work.
This arrangement offers the best of both worlds. It allows someone to have the advantages of spending some of their prime years traveling, learning a new craft, or one of the million other things folks who retire in their 30s end up doing. And then it makes sure they get back to work before their resume turns to dust and they become unemployable.
Imagine you were an early retiree who wrapped up your working career at 35 during the top of a long bull market. You have $1 million in the bank. Suddenly, stocks are down 40%, and you’re only looking at a nest egg of $600,000. The whole plan looks shot.
So you decide to go back to work. But the combination of a poor job market and the giant gap in your resume make you all but unemployable. What’s an early retiree to do?
I’m sure plenty of these retiring early folks have planned for such contingencies. Still, backup plans are good. I’ve always found work comes easy when I’m not exactly looking. The opposite is true when I’d really like to find something.
Let me tell you a secret
Come close. I’m going to tell you kids something that’ll blow your collective minds.
There’s no such thing as people who retire in their 30s.
Every last one of them has something that keeps them busy. Some build an online presence. Others build houses. Some freelance. And some take care of the house/kids. The point is all of them end up working in some sort of capacity again. The work might not be paid, or very glamorous, but they do it.
When you’re financially independent, you can make the decision to switch from a very demanding career to an easier one. You can take a break from working. Or you can travel. You can do anything you desire, including retiring.
The point? Get financially independent and then let the rest take care of itself. Once you get to that point, all sorts of options open up. I’m a fan of taking time off between jobs myself, but hey. Whatever floats your boat.