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Discussion Starter · #922 ·
Canadian banks are near its 52 weeks low, where are all those smart arses, telling that raising rates are good for banks?
Rising rates aren't good for banks. Consumers will struggle under higher rates, so the loans are going to deteriorate. There will be more non-performing loans and more losses.

Remember as well that Canadian banks are very leveraged institutions. This works great during credit expansion but the reverse is true during credit contraction. They will have leveraged declines and losses, as all their assets decline in value.

The typical large Canadian bank is like a hedge fund. They have a balance sheet holding a mix of assets (loans, bonds, and risky assets) and the whole thing is leveraged. Their assets have been highly inflated due to central bank stimulus and zero interest rates. With their leverage, this has worked out tremendously well for them. But just like any other leveraged hedge fund, the reverse happens when asset prices decline.

It's not a disaster, but I would expect bank equities to decline sharply due to the inherent leverage in those companies. Same is true for REITs of course, which are leveraged RE holdings.
 

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Banks have room for more decline. If one thinks rate hikes are bad for banks wait to see what foreclosures and bankruptcies do to their balance sheets. This doesn't mean we will see a RE crash. Even if we do the banks will survive but some real estate investors and home owners won't. For the most part anyone who didn't over extend or over leverage will be fine. I shudder to think what it would be like if we had high unemployment added to the current mix. Canadian banks have better regulations and loan provision than other countries. Being an oligopoly helps as well. Anyone remember the phrase "Too big to fail"? Banks will be saved come hell or high water.

I want to add to RY as it is my smallest holding of the big 5 (don't own CM) but am waiting for a better share price.
 

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Investment returns saw in 2021 are not typical and one should not expect similar yoy returns on a long term basis. I haven't heard much from the FIRE fanboys and girls as of late. I am not talking about semi retired, or folks like yourself @james4beach who have ran worst case scenario plans and are prepared to adjust as necessary. I am referring to those that professed you can work and save for 5-7 years and then spend the next 40 or 50 doing whatever you wish. To be honest I believe most FIRE talkers were just trying to change the definition of retirement to better address a change in work life balance. Most had side hustles or blogs or books to peddle. A lot of it was well intended fin porn. Will FIRE be sent out to pasture like the Freedom 55 marketed in the 80s? Yes it is possible to achieve Freedom 55 or FIRE but for the majority it is not feasible. I believe many FIRE folk failed in their planning by using the assumption of steady market returns(no volatility or possibility of a bear) and RE prices going to infinity. I don't blame them. Basically, from 08 onward was a pretty good run in stocks with quick rebounds and RE values saw increases typically made over years or decades on a monthly basis.
 

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I haven't heard much from the FIRE fanboys and girls as of late.
I am a FIRE fanboy, even though I don't talk about it much on this board. I was actually going to leave the workforce this year. I'm still considering it despite the ~15% drop in my portfolio (so far!), but it seems it would make more sense to stay employed for the duration of the (possible) recession. This stock/bond market downturn is an opportunity to make substantial gains in the long term which would make a big difference when I'm older, so I feel like I should take advantage of it. It's a really tough decision though, because mentally I was done with work...
 

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I personally don't like the FIRE movement because it's not inclusive. FIRE movement is a rich people's movement with the aim to retire early, as per the acronym. And if everybody with a high-paid specialised job which are highly in demand end up retiring early, it puts a pressure on the workforce.
 

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And if everybody with a high-paid specialised job which are highly in demand end up retiring early, it puts a pressure on the workforce.
... So what?

People should just continue to work instead of retiring if they have the means just to fill those positions? Lol
 

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My wife went back to part time work for something to do, but basically we were FIRE at age 55.

We both worked for employers with DB pensions. We both paid the maximum into CPP since 1967.

We both lived in Canada for more than 40 years to collect full OAS. We basically hit all the right notes in the retirement melody.

Without the above, which is basically due to luck, persistence, and being born in Canada,........we would still be working full time.
 

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I know a couple who emigrated to Canada 15 years ago.

The husband started a renovation business, mostly for cash under the table and I am pretty sure he didn't pay into CPP.

His wife worked at a part time low income job and didn't pay a lot into CPP. Neither of them would get enough years in Canada to collect full OAS.

As they got older, it suddenly dawned on them their future retirement in Canada looked rather bleak........like collecting partial OAS/GIS level of bleak.

So they sold their house at the peak price and off to Spain they went with the proceeds to retire.

There is something to be said for staying in one place, working for one decent employer, contributing the max to CPP, and living in Canada for 30 or 40 years.

That deeply tanned, golden haired young man combing the beaches and enjoying life today, has a good chance of becoming that leather skinned old man living in a run down apartment while subsisting on government welfare in the future.
 

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To be honest I believe most FIRE talkers were just trying to change the definition of retirement to better address a change in work life balance. Most had side hustles or blogs or books to peddle.
I also kind find it annoying and somewhat disingenuous when FIRE talkers are dependent on side hustles, blog income, book sales, etc. On the otherhand, I also find it understandable that some early retirees will end up doing something for fun or stimulating that will generate income.
IMO, it's really about being in a position to be able to make decisions where generating income isn't a primary factor.
Will FIRE be sent out to pasture like the Freedom 55 marketed in the 80s? Yes it is possible to achieve Freedom 55 or FIRE but for the majority it is not feasible.
I know there's a lot of stinkeye thrown at the Freedom 55 stuff but I've got to admit that it was one of the things that initially got me thinking about retirement planning and take basic steps in my mid 20's in the 90's. But agree that Freedom 55 / FIRE will be difficult to achieve for most for a variety of reasons.

FIRE movement is a rich people's movement with the aim to retire early, as per the acronym.
I find that the FIRE movement has so many different flavours. No doubt that chasing down FIRE with what is considered a middle class lifestyle generally requires a high income, particularly in areas with high housing costs. However, I've met quite a few folks who are happy living a very simple lifestyle and have little wants and thus don't need lot of income to build a large enough nest egg.

I am a FIRE fanboy, even though I don't talk about it much on this board. I was actually going to leave the workforce this year. I'm still considering it despite the ~15% drop in my portfolio (so far!), but it seems it would make more sense to stay employed for the duration of the (possible) recession. This stock/bond market downturn is an opportunity to make substantial gains in the long term which would make a big difference when I'm older, so I feel like I should take advantage of it. It's a really tough decision though, because mentally I was done with work...
Yeah, my present regret is not having income now to throw at all the discounts in the markets. But you've read my thread and I was pretty mentally done too.
 

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There is something to be said for staying in one place, working for one decent employer,
That's so hard nowadays in the corporate world. There's little loyalty from employers and correspondingly employees. At my megacorp, I saw a lot of good people let go because of business decisions that made financial sense at the time. I then discuss with my boss at the time that it's ridiculous for our company to have these employee engagement surveys asking questions like "It would take a lot for me to leave the company." with a 5 point answer scale when it's basically quid pro quo. However, I also realize these engagement surveys just serve to give the company a snapshot of turnover risk so might as well just game the answers to try to angle for better pay and benefits. :p
 

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Canadian banks are near its 52 weeks low, where are all those smart arses, telling that raising rates are good for banks?
No doubt the bank share prices are getting hit, and hit, and hit. :)
What's kind of surprising though is CM's CEO giving a presentation yesterday (Thu) which shows some pretty ambitious CAGR's (mid/high single digits, low double digits) in most of their divisions through 2025 in light of current and forecasted economic conditions. Yeah, they still have to execute and deliver but it would be pretty bad to give such guidance and miss it.

EDIT: Typo
 

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Discussion Starter · #938 ·
And if everybody with a high-paid specialised job which are highly in demand end up retiring early, it puts a pressure on the workforce.
Don't worry. I think very few highly paid professionals would do FIRE.

Most get hooked on expensive lifestyles and get trapped in a big mortgage. I don't think that many of my coworkers can just walk away from their high salaries, they really need their jobs to pay all their bills.

FIRE requires frugality and probably some rejection of consumerism. Most Canadians are not frugal, but quite the opposite: they are hooked on luxury lifestyles. Consumerism forces people to keep working.
 

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I personally don't like the FIRE movement because it's not inclusive. FIRE movement is a rich people's movement with the aim to retire early, as per the acronym. And if everybody with a high-paid specialised job which are highly in demand end up retiring early, it puts a pressure on the workforce.
I don't agree.

I know a few young couples following Fire Agile type lifestyles. In all cases, they have invested heavily in themselves so they can earn a good income, they are very selective on how they spend their money, they are non-materialistic and they have clearly defined goals.

Some will do better than me, some will be similar and some may have less. I enjoy hearing and seeing others achieve their goals. There are some great diary stories on this forum. Also, someone like @james4beach often mentions his modified semi-retirement lifestyle while still being young. It might not be a lifestyle choice for everyone, but I applaud him for chasing his goals.

I definitely don't agree with this either: "And if everybody with a high-paid specialised job which are highly in demand end up retiring early, it puts a pressure on the workforce."
 

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I personally don't like the FIRE movement because it's not inclusive. FIRE movement is a rich people's movement with the aim to retire early, as per the acronym. And if everybody with a high-paid specialised job which are highly in demand end up retiring early, it puts a pressure on the workforce.
I wonder if many of them, once they actually do retire early, will find themselves bored and go work again.
 
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