I have a bad habit of looking up our individual stock’s values every few days.  I know it doesn’t really matter, but it’s a habit that is a bit hard to break after being in my buying mode for most of last year.  What is somewhat really stupid about the habit is I know barring a major shift in the companies I own I won’t be selling any of their stocks for possibly decades.  I just enjoy my dividend cheques too much.

So we end up with these odd events like BMO, which we both own, having a good quarter and their stock climbing up almost $10 from where we last bought some.  It looks good on the net worth statements, but it doesn’t do anything for us.  The price doesn’t matter when we have no plans to sell.

So I’m in a spiral of knowing the price  and having it help our net worth statements, but having no intention of selling so I wonder why I look.  I suspect that habit know comes from being a little over concerned with stock prices falling the huge drop in 2008.  I keep watching for a potential double dip in our recover since I can’t shake the feeling that it all seems to be going too well.

The reality is I don’t need to look except for every two months to prepare my net worth statement. If the world really goes to hell for the market I strongly suspect it will be all over the news headlines.  Anything over a couple percent movement on the TSX in a week tends to end up with it’s own headline so I will know to have a look at that point.

Therefore going forward I’m going to try something new and not look at all until the end of the month.  Can I do it?  I don’t know, but it sure will be a fun game to play in the mean time to help me break my habit.

Do you ever tend to beat yourself up over things you should do?  Like:

• I should spend more time with the kids playing in the evening.
• I should write my blog posts the night before rather than the morning of.
• I should move money into my saving account more often than every two months.
• I should read more of that background material I got from my trustee job.
• I should get more done during my day job even if I’m feeling tried.
• I should write on my book more during the weekend…

And the list goes on and on.  I feel guilty over all shorts of stupid things too like how dirty my house gets despite the fact I was barely home that week.  So in the end I’ve decided something important.  Feeling guilty has got none of these things done and it hasn’t made me any happier either so FUCK OFF GUILT! I’m done with feeling guilty.

I’m just one guy with a ton of things in my life and I just can’t do everything.  I admit it.  I can’t possible do everything that I want to do in life.  Hell that’s why I’m planning on retiring early.  I’m got enough stuff going on I can easily fill that extra 2000 hours a year that is my day job for those extra 20 years and still need another decade.

So in the mean time I’m going to stop feeling guilty and realize that I’m doing the best that I can.  It’s not perfect but the kids still kiss me goodnight after we read stories, my wife still wants to go out on date nights and hasn’t filed for divorce, I still get the odd compliment from my boss at my day job and you the readers haven’t all stopped reading this blog at once.  Obviously I’m not doing that bad of a job.

So rather than feeling guilty I’m just going to try to enjoy what I do.  I won’t get everything done but I don’t need to.  I’m going to let the little things slide and just do my best.  Happiness is more important than guilt any day of the week.

So how often do you feel guilty?  What do you do to stop?

People always seem to amaze me once in a while.  In my other job, as a school board trustee, we had a difficult decision last night regarding a school closure and I was surprised that the board actually voted unanimously in favour of a hard choice.  It wasn’t an easy choice, but it was the right one.  This got me thinking about people and their spending habits.  Do people overspend just because it’s the easy choice and they are avoiding a hard choice?

If you really think about it, if you are making good money and you have access to credit, it isn’t a big deal if you overspend in one month.  Then perhaps you have a few odd events in another month and you get some more debt. So slowly over time you get used to spending more than you make and then before you know it your up to $30,000 in debt and wondering where the hell it came from.  Getting into debt is an easy choice.  Staying out of it or even paying it off is a hard choice.

I won’t lie and say that saving up for what you want before you buy it is easy.  The reality is it is hard to wait when you are so used to getting things NOW regardless of price thanks to credit.  Saving is the harder road but the payoffs can be bigger as well.   That is the point of hard choices, they are not easy ones, but doing what is right in the long run can produce amazing results.  In my case it is reducing my mortgage at a huge rate and allowing me to dream doing what ever I want all day long in just over a decade.

So how do you make a right choice even when it is hard?  To me there is no set formula on decisions.  Some times I look at the math involved and use that to decide.  Other times the decision is mainly emotional and I have to feel my way to a solution.  Regardless of how you come to a choice you need to decide how much do you want your dream.  If it is important enough you will find a way to make it happen even with all the hard choices to get there.

So what hard choices have you faced lately and you did the right thing? In my case, I’m proud I decided to pay off the mortgage in the next few years.  It would have been easier to just spend more, but my wife and I choose a bigger hill to climb and we are looking forward to the view from the top.

“We have [taken] extraordinary measures to protect the Canadian economy,” Flaherty told MPs in the House of Commons.  “Like virtually all other countries, we needed to run a substantial deficit to do so. But unlike other countries, we are in a position to ensure our deficit will be temporary.” (Flaherty, March 5, 2010)

Everyone seemed so happy in the House of Commons - there was clapping, back-slapping and cheers.  I’m not sure if I’m the only one to ask this question, but is a $53 billion deficit something to get super excited about?  This is the best that our leaders can do - adding $160 billion to our debt over the next 5 years?  Really?

Admittedly I know very little about domestic finance, but what I do know is that if I applied the same methodology being used by the Federal Government to my own finances, I would be more than bankrupt pretty quickly.  I realize that the goal of government is different than my personal goals, but here’s what I see from the current budget as well as the projected deficits going forward:

1. Projected revenue is $213.9 billion;  projected deficit = $53.8 billion. If this was my house, I would be in big trouble - 25% of my income being spent on “stuff”, that may or may not better my financial position at the end of the year.
2. With income decreasing, spending increases? Does this make sense to you?  Is this how you run your house?  It seems contrary to any financial plan that I’m aware of.
3. Canada’s debt will have increased from $517.5 billion in 2009/2010 to $622.1 billion in 2014/2015. Does it really seem like a good idea for our Government to plan to overspend for the next 5 years (which is seen as temporary)?  This spending spree is really the best idea we can come up with?  I don’t really know what I would say if my wife sat me down and said she was planning on overspending for the next five years, but it was “okay” because by year 6 we’d be back to just spending what we were making (because we would definitely not make plans to repay what we’re borrowing anytime in the future).

As previously noted, I am not an expert in getting a country out of a recession, maybe the only way to do so is to spend your way out.  If so, I guess I’m fine with that.  My main problem with the whole thing is that the Government seems so proud of itself for overspending.  After handing down a budget showing the first deficit since the mid-1990s I think a more appropriate reaction by the finance minister and MPs would be to at least act apologetic.  For 35 seconds (after a rousing 2-minute finale) rather then act apologetic our Government stood and cheered. I don’t have $53.8 billion, I’m pretty sure that readers of this blog don’t have $53.8 billion, but our government thinks that at some point in the future we as a country are going to get together $53.8 billion (and interest) to pay down what they’ve decided to spend this year.

In response to this budget, the opposition parties responded by saying they wanted the Government to spend even more money on such things as pensions, climate change, health care, culture, job creation, tuition fees…….  I’m not really sure what the opposition parties are looking for here - do they figure we’re already in bad shape and we might as well hit rock bottom?

I don’t know where our government gets their ideas from, but maybe they need some new ones?  Am I alone in this, or is there similar sentiment out there?

***As an aside, I’d like to state that I am not really for or against any party.  I generally vote with the one that makes sense to me on the majority of the issues.  This post was not meant as an attack on the Conservative government, more of an address to our current fiscal policy, which doesn’t make sense to me.  To me, it would have made more sense for the Minister of Finance to come out say -
“we’re kind of broke right now and can’t afford to do anything, everyone who wants money, they’re just going to have to wait until we get some” - that is something I can understand.***

The majority of reader’s questions I get tend to be situational like: can I retire, do we have enough for me to stay home from work?  So it was a bit of surprise to get a question that was looking purely for my  speculation on a topic:

I would love to read an article about your opinion of a future “generational housing bubble” regarding our aging baby boomers and our current population growth not turning over enough people to replace them.  What happens to house prices when baby boomers start selling their homes and moving into senior friendly housing?

The past 30-40 years of baby boomer house buying has fueled demand and driven up house prices creating an affordability barrier for the next generation, which in turn caused the lax mortgage rules.  They made mortgages cheaper instead of homes, and that only gave prices nowhere to go but up. Now a 3 bedroom home is just barely affordable for the average income family. If the gov’t is going to deflate this bubble  instead of waiting for it to burst then they will have to tightly reign in the growth in house prices that people have come to expect.

Well this question came in right after my post on the new measures to deflate the housing bubble.  So obviously the government has tried to take a bit out of this housing bubble, but not too much.  Why? I’m strongly speculating here it has to do with not pissing off the baby boomers by causing their housing values to crash right after the 2008 stock market correction.  After all the majority of them do vote (compared to other age categories) so the new rules I suspect are walking a fine line of doing something to cool housing, but not too much.  The decision was more of  a political one than a practical one.

So what will happen to the housing market in the long run?  I still think we are doomed to a large house value correction on average (how it plays out in regional markets is impossible for me to guess at).  Why?  It’s the basic balance of supply and demand.  There are too many boomers with non-starter houses and second houses (cabin or investment property) and too few buyers that can afford to pay what they want for those properties.  As they age and want to get rid of those homes (or more likely need to get rid of since they don’t typically have enough saved for retirement) it will put too many houses on the market all at once.  For a while the boomers might try to stick to their guns and ignore the reality but in the end some might start getting a bit desperate to sell and that would trigger a spiral down in prices.

Yet there is a large hole in my speculation.  It assumes that the majority of  boomers just stop working, since there has been a lot of talk about doing some work in retirement you may end up with a more balanced exit of the boomers from the market.  In this case it might avoid a crash in housing prices and we might just end up with a more gentle correction that goes slightly down followed by a leveling off in prices as incomes need to rise up to a more equal footing to house prices.

So that’s my speculation on the market.  Right now I would guess at about 50-50 odds for either case occurring.  The boomers are not typical in a lot of ways so trying to predict their overall movement in a market is gamble at best.  What’s your thoughts on this generational bubble?  Will it correct or not?