The TSX NEX is Filled With Trash

The TSX NEX is Filled With Trash

tsx nex

My rule of thumb is this.

If the glove don’t fit, you must acquit!! 

Topical, Nelson, Real topical.

When it comes to investing, large companies are almost always priced efficiently. There are thousands of analysts spending tens of thousands of collective hours poring over the latest earnings release from Suncor Energy. The chance of you or I discovering something important hidden in a footnote on page 57 is pretty much nil.

The smaller the company, the better chance you have to identify some sort of mispricing. Big investing firms aren’t going to follow some tiny obscure company that only does a few million per year in business. There are countless opportunities hidden among these stocks. I did quite well investing in MRRM, for example, making a little more than 50% in just under a year. When I bought it, it had a market cap of $7 million.

Many of the smaller companies in Canada hang out on the TSX Venture Exchange. The vast majority of stocks on the exchange are either in the energy or mining space, as hopeful entrepreneurs scrounge up enough outside investor cash to get a company worth a few million. They get a listing on the Venture exchange, and hopefully put their dream plans in motion.

There’s a bit of a wild west mentality over on the Venture exchange. Insiders regularly take fat six-figure salaries to be in charge of companies that have no revenue and little hope of ever making money. Many of these companies play fast and hard with accounting rules. And most are constantly raising money to keep afloat.

Trying to find good investments on the Venture exchange is the investor equivalent of turd mining. You’ll find some gems, but you’ll have to wade through a lot of stinky stuff to find it.

Knowing this about the Venture exchange, this chart probably makes a lot of sense.

tsx venture 2011-16

Yes, kids, that is a 78% decline over the last five years for the TSX Venture Composite Index. Gold stocks were riding high in 2011, which didn’t end well. Energy helped give it a little support, but that died off in 2015. The Venture exchange is so out of favor you can’t even buy an ETF that covers it. The two that were in existence quietly went away.

Here’s a list of the top holdings of the index. Yes, at least one is a marijuana grower. See if you can guess which one!

venture top 10

 

Besides the marijuana grower (that’s Canopy), we have a couple of tech companies long on ideas and short on cash, a company trying to mine gold in Peru, and a few energy companies. Storm, the largest of the bunch, has a market cap of $370 million, and apparently no desire to graduate to the TSX.

Basically, to encourage companies to list at all, the TSX Venture Exchange has more relaxed rules. Fees are also less for Venture companies. So as you can imagine, the more, uh, questionable stuff ends up on the Venture exchange, while the actual businesses graduate as quickly as possible to the main exchange.

In a world where Dragon’s Den, Shark Tank, and various other forms of venture capital are a thing, apparently having two exchanges wasn’t good enough for the folks at the TSX. Other alternative exchanges were popping up, as big banks realized they didn’t really need the TSX taking a small cut of every trade.

So the TSX decided to launch a new tier of trading, focused on the stocks that didn’t qualify to trade on the TSX or TSX Venture exchange. It’s called the TSX NEX, and it’s something you should never touch.

Most of the companies on the NEX have been either kicked off or have voluntarily given up their TSX/Venture status. Often this happens because a company doesn’t bother to release earnings results. Because hey, when I’m looking for investment opportunities, I’m attracted to companies that can’t be bothered to tell investors what’s happening.

Most companies end up on the NEX for a period of time and then quietly get suspended or delisted. There are approximately 410 companies listed in the company directory, and approximately 180 are suspended. There are others that have halted trading for whatever reason.

Interestingly enough, I actually own a stock that trades on the NEX Exchange, Automodular. That sucker is up nicely for me, gaining about 50 cents per share all told. I recently tried to sell at $2.70 but couldn’t get anyone to buy. The company looks to be liquidating, we’re just waiting for the results from the a lawsuit it filed against General Motors.

I’d recommend most investors ignore the TSX Venture entirely. It’s filled with crappy mining stocks that will never see the light of day. The amount of effort to find the good stuff in there probably isn’t worth it for the average person.

I’d especially recommend investors stay the hell away from anything trading on the NEX Exchange. Fortunately, they’ve made it easy, requiring every ticker symbol on NEX to end in .h. So if it says .h, that means stay the Hell away.

The Best Ever?

You guys know that I like to make fun of stupid people on here. I try to focus mainly on the financial decisions, but come the hell on. That kind of stupidity has a way of moving beyond the financial stuff, and into the most important parts of grey matter.

But I discovered an article earlier today that was so bad and so terrible in every way that I just had to drop everything and make fun of it. Yes, that even included my pants. TMI? TOO BAD I’M ON A ROLE NO STOPPING NOW.

It’s called The National Lust For Home Equity Lines of Credit: Should We Worry?, and it’s possibly the greatest thing I have ever read. I literally cannot wait to get started.

Murad Ali and Arsheen Haji live large thanks to easy access to their home equity lines of credit, joining the many Canadians succumbing to the same temptation.

Ah, yes. The ol’ ‘borrow to consume using your HELOC.’ We’ve seen this before, but certainly not to this extent, as you’ll see.

For the Toronto-area couple, it all started back in 2009 with a lavish $78,000 wedding.

Rather than spend $78,000 on a wedding, how about I do something else. Let’s have a blog party. I’ll go buy like $1500 in booze, some chips, and maybe rent a swanky hall for a couple g’s more. And then, I’ll go to the bank, get $75,000 in 20s, and slowly burn them while y’all watch and drink craft beer. Make sure to take lots of selfies, because obvs.

I’m accomplishing the same thing, really.

Then came numerous overseas vacations.

Check off another box in the “crap millenials waste cash on checklist.”

When touring Egypt, Ali bought four souvenir papyrus scrolls for $6,000. In Italy, Haji picked up a $7,000 Chanel bag.

Why buy one, when you can buy four, amirite Ali? When it comes to spending money, that man is not here to screw around. And apparently he’s taught his lady well too.

After the birth of their daughter, the couple moved into a newly built home and spent more than $100,000 on upgrades, including a custom kitchen, hardwood floors and a high-tech fireplace.

What kind of people move into a “newly built” home and say “you know what? This place is GARBAGE. Let’s get our guys in here and spend another six figures on this dump?”

So how exactly did these guys afford all this stuff, anyway? Are they independently wealthy? Inheritance from a long-lost uncle? Did they win the lottery?

Nah.

The wedding, trips and high-end purchases were made possible with cash from two home equity lines of credit secured against a couple of investment condos the family owns. The debt from those loans now totals $370,000.

JESUS H CHRIST WHAT IN THE ACTUAL HELL?

Can somebody please tell me this is a parody piece before I have a stroke? Please? I’m actually begging you right now. I don’t want to die.

They also recently got an unsecured $30,000 line of credit to buy solar panels for their new house.

OF FUCKING COURSE THEY DID.

“Hey, we’re, like, at least 400 g’s in the hole. You wanna get solar panels? It’ll save us pennies per year.”

(Doesn’t respond, too busy masturbating over her Chanel bag)

“We are addicted for sure. Who wouldn’t be addicted to something so easy [to get]?” says 35-year-old Ali about the free-flowing lines of credit that have enabled him to splurge on the finer things in life.

Does Ali realize these loans have to be paid back? Because I’m not sure he does.

“It’s easy, accessible cash at a very cheap price. The banks make it so easy for you to obtain it,” says the software engineer.

Not mentioned: the part where he went down to the bank and was told to sign on the dotted line or else they’d blow his brains out.

Wait. I’m being told that didn’t actually happen.

 

Ali is now considering borrowing more money against the equity in his new home.

WHERE’S A GUN? TELL ME WHERE I CAN GET A GUN BECAUSE I SWEAR TO GOD I NEED TO GO SHOOT SOMETHING.

He admits he’s antsy about adding to his debt when the family already has a substantial mortgage on their 5,000-square-foot house.

A 5,000 square-foot house for three people, by the way. That’s a lot of space for the couple’s baby to crawl around. Hell, maybe that’s the whole plan. Just let the baby get lost somewhere so it doesn’t get burdened with all that debt.

But the place is still largely unfurnished and he’s yearning to install a $40,000 glass railing for the staircase.

If only there was a way to have avoided buying a house that was so big that you didn’t have enough furniture for it BEFORE YOU BOUGHT THE GODDAMN THING.

Here’s a list of things I would spend $40,000 on before I used it for a glass railing for my stairs:

1. Anything

“Without the glass railing, the look of my stairs is not doing it justice,” he says.

There’s your problem right there. Shitty stairs. The rest of your life is peachy keen.

Right now, the couple could probably afford the extra loan payment. Currently, both he and Haji, a business analyst, can cover the bills and still have money left over for savings.

This might be the greatest sentence I’ve ever read. Sure, they’re going backwards each month, but they’re putting money away, dammit! Doesn’t that count for anything, HATERS?

Props to Haji though, for getting people to pay her to analyze their business while clearly having the math skills of a nine-year old. I honestly wish I was confident enough in my own abilities to pull off something like that.

 

While Ali and Haji like to spend, they believe they’re behaving responsibly and say they’re aware of potential pitfalls. That’s why they’re still undecided about another loan.

 

 

“Hey, we’re prudent. We’re going to wait a couple of weeks before spending on our next bullshit material thing we don’t need. Responsibility is hard work.”

If you get a line on this [house] and God forbid something happens to me or [my wife] and we are unable to sustain our lifestyle or stream of income that we have, then we would be in trouble and that may lead to us losing this house,” says Ali.

It “may” lead to them losing the home. Wow.

Ali, buddy, lean in close. I have a secret to tell you.

If anything happens to you or Mrs. Ali, you’re fucked. So unbelievably fucked.

And that’s why some rooms in the family’s home remain empty.

SUCH SACRIFICE. WHERE’S DEAD GHANDI I’M GONNA CALL HIM AND LET HIM KNOW ABOUT THE SACRIFICE.

Ali shows CBC News his large, mostly barren master bedroom and talks about his grand plans to furnish it — sometime in the future.

“Without the credit line, it’s slow,” he laments.

Even starving children think Ali is in a pretty tough spot. “Here” said Timmy, aged 4, with no hands or feet. “Have my last dollar. I was saving it for prosthetics, but I want you to have it instead.”

But things could always change. The couple says just last week the bank called, inquiring if the family was interested in another loan.

But I thought Canada didn’t have irresponsible bankers?

The Much More Important Lesson From Royal Bank’s Hiking of Bank Fees

The Much More Important Lesson From Royal Bank’s Hiking of Bank Fees

Not pictured: Satan

Not pictured: Satan

Last week, Twitter was all, uh, atwitter, about Royal Bank increasing its bank fees. Some of the changes which go into effect on June 1st include:

  • If you use up your free monthly debits (raised from 10 to 12), you’ll have to pay a fee to pay your mortgage, car loan, or any other loan automatically taken out of your account. That fee is from $2-$5 per transaction
  • If you have a kids or student account, this fee is $1
  • Seniors now have to be 65 to qualify for discounted banking packages. The previous age was 60

Related: See how Vanessa holds a mutual fund with a 2.46% annual fee to get free banking.

Basically, these fees mostly affect the $4 per month account, which people have been using and then getting for free by having two of a credit card, mortgage, or investments with the bank. That’s exactly why Vanessa ended up buying that mutual fund with a 2.46% MER, to save that monthly fee.

Here’s what gets me about this whole thing. It’s really easy to maintain free banking, even by staying at Royal Bank. All you need to do is stay under the minimum of 12 transactions per month by putting everything on your credit card, and paying it off at the end of the month. It’s easy, and you’ll earn rewards from your credit card at the same time.

But instead, we get comments like this, from an anonymous Globe and Mail reader:

There are some very uncharacteristic yet refreshing waves of discontent appearing amongst the usually calm waters representing the Canadian investor.

Personally I am loving the sudden backbone exhibited by shareholders on the say-on-pay issue. Gone are the days when the AGM is stacked with insiders, fund managers and other biased fart-catchers. Gone are the days when entrenched major shareholders and pension funds simply rim the bum of the Board and endorse whatever it recommends.

And now banking fees are under the microscope. Well … it is about time. Banks today are being paid by their customers more and more for doing less and less. This is a fact and it is beyond dispute.

Not gonna lie guys, I’m pretty impressed he properly hyphenated the fart-catchers bit.

I’ve talked before how it’s stupid to care about bank fees. Rather than getting pissed off about losing a few bucks a month, I’d recommend everyone get busy earnin’ so they’re in a position where they don’t care about a lousy bank fee. So let’s not talk about bank fees anymore.

Instead, let’s talk about RBC is inadvertently teaching us something really important about marketing and business with these new fees.

Worst customers

Because we haven’t had one of them in a while, let me tell you a story about my days selling chips. This one is about my worst customer.

He ran a small convenience store an a village of about 200 people. The chip display was immediately across from the cash register, so he’d look at it, every single day. If he ran out of hickory sticks early, he’d complain constantly the next time I was there. So I’d give him extra hickory sticks, and then he’d run out of something else. He responded by asking for extras of everything, even though a full 20% of items were in danger of going outdated. (I was allowed 1% of sales as outdates) Since everything was a guaranteed sale, he didn’t care about outdates at all. So we’d argue about it, constantly.

It got to the point where going there was a chore. Wal-Mart sold $3-$4k worth of chips every week, with almost no headaches. This guy sold $100. When I left, I heard that the next driver fired him as a customer. In hindsight, I probably should have done the same thing.

Anyway, the point is this. Every business has crummy customers. To deal with them, you have a couple of choices. You can either a) suck it up or b) fire them.

By raising their fees, Royal Bank is telling all their worse customers to hit the road without actually telling them.

Anyone with a brain and an internet connection knows that Canada has several banks with very little in the way of fees. They offer a trade-off of no fees for reduced service. Most financially savvy people are okay with this, so that’s the direction they go.

But for some people, this isn’t good enough. They want the benefits of having a branch they can drop into to complain, without paying to do so. I can see why people want this; but I can also see how these are money-losing customers from the bank’s perspective.

Each time they increase fees, a certain amount of freeloaders head on over to Tangerine or PC Financial. Many other potential freeloaders complain, but stick around. What a great way to fire your worst customers without actually doing it.

The other nice thing about this is from the other banks’ perspective. Now they’re free to raise fees, conveniently offering the excuse that they’re just doing it because of RBC.

If you’re the kind of customer who has had a meeting with someone in a bank somewhere about free banking, you are a bad bank customer (especially if you have a credit card you pay off each month and no mortgage). I won’t begrudge you for wanting to get something for free, but at least understand that there’s a reason behind this that isn’t just OMG ROYAL BANK IS GOUGING US SOMEONE CALL ELLEN ROSEMAN.

And better yet, if you think the banks are really screwing over customers, maybe you should buy shares. Seems to me like a company that charges outrageous fees should be a pretty good investment.

Aberdeen International: Who Said Investing Had To Be Boring?

Normally when it comes to the world of investing, YOUR BOY Nelly follows a similar pattern.

  1. Finds undervalued stock
  2. Does research, including writing down my thoughts for y’all
  3. Buys some, but also keeps some dry powder just in case it drops more
  4. Patiently twiddles thumbs until it goes up
  5. Sell when it hits the target price

Step 4 is the hard part, since it often takes years before a stock starts to go up. Remember Reitmans, the stock I’ve been talking about since May of 2013? It was basically dead money for a year and a half before surging more than 25% in December alone. The company’s results have continued to just be okay, so I’m not exactly sure why the surge happened. Maybe people are bullish because of oil hitting the skids, giving the ladies more disposable income? I dunno.

The point is that the waiting is supposed to be boring. There really isn’t much you can do in the meantime besides just keeping an eye on it, so you move onto other things, like hopefully reading this blog and clicking on all the ads. Nelly needs to get paid to keep referring to himself in the 3rd person, yo.

Sometimes, things are a little more exciting, like with the case of Aberdeen International (TSX:AAB), a lowly company with a $14M market cap that invests in private and publicly traded securities of precious resource stocks. Shares currently trade at $0.14.

If you’ve been reading this blog for any longer than a couple of minutes, you’ll know those investments are probably very undervalued by the market. You’d be right. The company has a book value of more than $31M, putting the shares at a 55% discount assuming the value of the company’s private investments is what management says.

There’s strike one. Unlike with Jaguar Financial, it’s not so easy to value the assets. With that company, you’re getting BlackBerry shares at less than 40 cents on the dollar, plus an additional 30% of the company’s assets for free. Aberdeen has lots of private investments, which we really don’t know how to value. We’re stuck taking management’s word for it.

Plus, Aberdeen’s management is paid well for a company with such a dismal track record. Since peaking in 2011 at $1.00 per share, 85% of shareholder value has been eroded. That’s not entirely management’s fault because the gold sector has been terrible, but it seems silly to reward these guys with stock options during such a dismal performance.

That’s exactly what’s been going on, at least according to Ryan Morris of Meson Capital, a San Francisco-based hedge fund that specializes in activist investing. According to Morris, Aberdeen International has bought back $9M in shares over the last year and has rewarded them back to management in easy to achieve stock options.

So Morris took a 5% position in the company and immediately started pushing for change.

Management ran more scared than a six-year old in a haunted house. Even though the company was sitting on more than $3 million in cash as of the last filings, management decided it needed to raise an additional $2 million by issuing 10 million shares each attached with a warrant to buy an additional share at 30 cents. Essentially, management issued a bunch of shares that had the effect of destroying a full 3 cents per share of book value.

Management claims it raised cash to do some buyin’ of some undervalued gold stocks. Morris doesn’t buy it, saying that 100% of the shares were purchased either by Aberdeen’s management or by sympathetic parties. Morris contends that the whole reason for the share issue was to put more shares in the hands of senior managers.

It gets better. When Morris got word of the private placement, he claims to have contacted the company on several occasions with a better deal. Management denies this, saying that Morris wanted in on the original deal and when he didn’t get his way, he backdated a tender offer to give the company the better price. According to Aberdeen, the offer was never officially on the table and so they closed it. This is interesting, you’d think they’d wait a couple of days if they were serious about maximizing shareholder value.

Morris has since accumulated enough votes to be able to call a special meeting of shareholders, which takes place February 3rd in Toronto. (If I lived in Toronto, I know what I’d be doing that day) He’s looking to replace the entire board of directors with his own guys, and although he hasn’t said it publicly, I’m assuming he’s going to liquidate Aberdeen’s investments and pay out shareholders. Or maybe he’ll control it and start his own mini Berkshire Hathaway with it.

Morris went on the offensive, creating FreeAberdeen.ca (maybe the .com was taken?) which outlines his problems with the company’s management. Management has fired back with their own document that outlines how awesome they are. Both are pretty entertaining if you’re interested in this kind of stuff.

Now that management know their jobs are on the line, they went ahead and added a very important clause in their employment contracts. The four main guys at Aberdeen International will now get rewarded more than $6 million in payments if shareholders punt the existing board of directors, under something called a “change of control” clause. This is in addition to the more than $13 million in compensation they’ve collected since the beginning of 2011.

There are already rumblings shareholders were getting fed up. During the last shareholders meeting, most directors only received 80-85% of the shares in their favor, which is a pretty big vote of non-confidence. It’s obvious Morris has researched this one carefully.

Even though Morris has been successful in getting the votes of the new shares to not count at the meeting, I’m still avoiding this stock. Upper management already owns 15% of the stock, and who knows how much is owned by parties sympathetic to management. The bad guys only need 35% of the remaining 85% to win, and remember that if somebody doesn’t vote then those shares automatically vote yes. I’m not sure Morris is going to win this fight. If he loses, the last thing I want is to be stuck with the current management team.

World’s Worst Couple Sucks At Managing Money, Life

Every week, the Globe and Mail features some family in need of financial planning advice.

The submissions are usually pretty straightforward. Retirement questions are common, especially trying to figure out if a couple has enough to make it happen. Younger folks generally ask about buying a house, especially in overvalued markets like Toronto or Vancouver. And so on.

But last week’s submission takes the cake. It is the greatest thing I have ever read. No time for more preamble, there’s a lot of mocking up ahead. (Edit: it has been updated from when I first wrote this)

Eric and Ilsa put lifestyle ahead of financial concerns but it has put them in a bit of a bind. He is 41 and a physician, she is 39 and a dentist.

They have five children, ranging in age from less than a year to 9, all of whom will go to private school. They have substantial earning power – although Ilsa is on mat leave at the moment – but Eric chooses to work for less money than he could.

Ilsa, hey? What is she, a character in Frozen?

Financial Uproar: staying on top of the pop culture references since 1998.

They are living rent free in a relative’s house (they pay taxes, utilities and upkeep) and “regret not having bought a house years ago,” Eric writes in an e-mail. Houses in their Vancouver neighbourhood have doubled in price in the past two years. The house where they live is going up for sale soon, so they need to move quickly.

To review so far, we have a doctor and dentist who are living rent free in a relative’s house, which is about to go up for sale. Sounds like a pretty sweet arrangement to me. What’s the problem again?

Last fall, they bought a building lot for $1.1-million and are planning to build a house large enough for their family and a live-in nanny.

Here we go.

But with a combined income of $360,000 ($450,000 when Ilsa returns to work) and an $800,000 mortgage, can they afford the builder’s $1-million price tag? Who will lend them the money?

If only there was an option to, I dunno, NOT build a million dollar house.

If only.

If only.

“Two professionals should be able to afford a modest house, but we can’t get the numbers to work and would appreciate some help,” Eric writes.

LOL. Modest.

They’re prepared to spend $2 million on a house (remember, the lot was $1.1 million) and they’re using the word modest? Okay, fine. Vancouver’s real estate is nuts. You can still get a pretty decent house for $2 million that’s already completed, but hey, these people need their dream home. Or something.

He earns $200,000 a year working one day a week in a medical clinic. But his real love is teaching, which he does one day a week at a university; this earns him $100,000 a year.

He works two days a week.

“I think I found a solution to your money problems.” — everyone who isn’t a moron.

“I have no pension whatsoever, but like my parents, colleagues and mentors, I love my work and plan to keep going well into my 80s, so retiring is not a big concern, just living,” Eric writes.

“I love my work so much that I drag my ass into it TWICE every week.”

Am I the only guy who would bust my ass doing the medical stuff for like a decade and just retire? The guy’s looking at earnings potential of a million bucks a year, not even including his wife’s income.

A financial planner had a few pieces of advice for the cash-strapped doctors, which surprisingly didn’t just consist of him bashing his head against his desk for 20 minutes.

Eric and Ilsa’s expenses are likely the highest they will be and they have not yet seen the long-term benefit of their education and the income it will generate for the rest of their lives, Mr. MacKenzie says.

They currently make $360,000 per year and one spouse is on maternity leave. I’d say they’re seeing some pretty damn good benefits RIGHT THE HELL NOW.

“It is financially possible for them to do the things that are important to them, although by doing so, they will run a cash flow deficit of $50,000 a year until the children leave home,” Mr. MacKenzie says.

I like how the planner just throws that out there. “Hey, you can keep going on your current path. No biggie, you’ll just go backwards $50k a year, probably forever. NBD.”

Over time, their annual deficits will add up to more than $1-million in additional debt. They can build their home, but they have to make a choice. Either Eric works one more day a week in the clinic, or they run up substantially more debt.

OH NOES ERIC MIGHT HAVE TO WORK THREE DAYS A WEEK WON’T SOMEBODY THINK OF THE CHILDREN LIKE MAYBE THE NANNY.

By the way, out of ten possible working days per week, this couple currently works two of them and have a full-time nanny. Yep. Makes total sense.

Eric and Ilsa are fortunate because their parents are willing to put a home equity line of credit on their own home to extend them the $1-million they need to build, and to finance their annual deficit, the planner notes.

This isn’t even a first world problem. It’s a 1% world problem.

I get emails from real people with real problems. And this jackass can’t reign in his spending enough to build a freaking dream home in one of Canada’s most expensive cities? What a stunning lack of self-awareness.

“However, there is a danger in accumulating so much debt because things don’t always work out as expected,” the planner says. “In this case, it is unwise especially when the cash flow problem could be easily solved,” Mr. MacKenzie says.

(Files that statement under the “no shit” category)

“If Eric is willing to work one more day a week in the clinic, they can live within their means and still afford to build the new home using a HELOC with the parents’ home as security,” Mr. MacKenzie says. He would be bringing in $500,000 a year. Once Ilsa returns to work part-time, she hopes to make $150,000 a year. Their first priority once the house is built should be to pay off the mortgage.

Two doctors working part-time with the earning potential to earn $650,000 before tax are feeling pinched.  Wow.

I know his clients aren’t anywhere close to savvy, but hot damn does this planner sound dense. “Duh, you work more. More money is good. Less is bad. Duh.” I bet he charges people $100/hour for that advice, and they gladly pay it.

But Ilsa and Eric face a more immediate risk.

DUN DUN DUN

From their financial situation, I’m betting it’s being able to feed and clothe themselves. If all the restaurants close, they’re screwed!

With five children and a big debt load, they have neither life nor disability insurance. Their long-term financial security is dependent mainly on Eric’s high earning power.

Oh.

That’s actually true. Eric should get his ass some life insurance.

Let’s take a closer look at Eric and Ilsa’s financial picture. First, their assets.

Assets: Cash in bank $6,000; his RRSP $180,000; residential building lot $1.1-million. Total: $1,286,000

For a guy who said about 500 words ago that he doesn’t want to retire, he sure is preparing for it.

Liabilities: Mortgage $800,000 at 2.6 per cent

BAHAHAHAHAHAHAHAHAHA They don’t even own the building lot. They’re gonna owe $2 million by the time they’ve built that house.

Monthly disbursements: Mortgage $3,800; property tax (both properties) $1,000; utilities $490; insurance $90; maintenance, garden $190; transportation $800; groceries $2,000; clothing $520; children’s activities $1,000; tuition $5,400; summer camp $600; child care $2,800; gifts, charitable $320; vacation, travel $2,000; dining, entertainment $200; sports, hobbies $200; miscellaneous (furniture, toys) $400; health insurance $50; cellphones $220; telecom, Internet $80; RRSP $3,000; professional associations $6,000. Total: $31,160

There’s so much hilarity in there I barely know where to begin. $7,200 per year for summer camp? $24,000 per year in groceries? $190 per month for somebody to take care of the garden at the place they don’t even own? $5,400 per month for tuition? My God, imagine what would happen if your kids went to (shudder) public school? That’s where they smoke marijuana and beat the kids with rulers.

I’ve met some doctors over the years who are incredibly good at their specialized field and make an assload of money, but have no idea about spending it. It’s probably a big reason why most end up working until their 80s — they can’t afford not to. It just goes to show that if you spend a decade in school getting a very specific skill, you’ll probably lack in other areas. That’s just common sense.

But at the same time, Eric and Ilsa are especially bad. It’s not just that they’re bad with their money, but the lack of self-awareness is what really gets me. They’re looking to build a $2 million house in one of Canada’s ritziest neighborhoods, and say stupid things like it’s a “modest house.” Piss off, it is not. The average house in Vancouver costs more than $1 million, but certainly not $2 million.

I’m not begrudging anyone’s success, and Eric and Ilsa should be able to afford a $2 million home. It’s not that hard, especially after taking a serious look at their spending. But enough with the ‘woe is me’ stuff. That’s what pisses people off, and rightfully so.