“Forget All This Silly Talk; Cuddle Up; Do The Sensible Frugal Thing; Buy A House; Become A Millionaire”

“The basic necessity of life is having a roof over your head, you own it to live in it for the long term and keep it, forget about all this investment cr_ap and appreciation business. My mom has a grade 4 education and bought a house back in 1980 in the middle of downtown Toronto for 50,000 dollars. It’s worth close to 700,000 dollars now. She had no clue houses could appreciate, in fact, she has no idea what appreciation was. Heck, she has no idea what a stock is and how to buy it. We rented out all 7 rooms to pay off the mortgage in 5 years time. What do you know, we still live here and my mom, who made only minimum wage all her life is a millionaire!!! She stopped working at age 49! All she does is watch tv and go out to restaurants. Simple frugal life.
Ignorance is bliss!!
Don’t buy and sell, buy and sell, you’ll only be losing money from all the cost. If you like your house and the location is great, you keep it for the long term. At an average rate of 2 percent compounded annually, you’ll eventually be a multi-millionaire.”

Motown Philly at National Post 14 Sep 2012

The making-a-million-bucks part of the equation is completely dependent on where in the cycle you buy.
– vreaa

24 responses to ““Forget All This Silly Talk; Cuddle Up; Do The Sensible Frugal Thing; Buy A House; Become A Millionaire”

  1. joe_blown_away_by_high_housing_costs

    This is why so many young people today hate the baby boomers. For baby boomers, it was possible to have a grade 4 education and make minimum wage and become a real estate millionaire.

    For the boomers kids, we get university degrees, still make minimum wage, and get renovicted out of rental homes. Then we get told by the baby boomers that we are lazy.

    • That’s so unfair, JB!… More than a few of those ‘self-made’ millionaires made it through Grade8… Speaking of ‘hard times’… Oops… make that ‘Soft Times’..

      [G&M] – TD Warns Canadian Economy Stuck in ‘Soft Patch’

      “The Canadian economy is “stuck in a soft patch,” Toronto-Dominion Bank economists said Tuesday in a bleak report citing stressed households and debt-burdened governments.

      “Canada’s economy appears to be at a crossroads,” said economists Craig Alexander, Derek Burleton and Diana Petramala. “After ramping up spending during the recession and recovery, fatigued households and deficit-laden governments have recently been shifting their attention to restraint.”

      http://tinyurl.com/9z5h5ye

    • …And then there’s the Irish – who really know a thing or two milking every last iota of Fun… out of ‘Soft Patches’…

      [BBC] – Cow Dung Bingo, Ireland’s Optimism at Beach Races

      “Ireland, like several other countries in the eurozone, is struggling under a heap of debt. Yet many refuse to give in to the doom and gloom – a constant round of activities feeds people’s optimism and sense of fun… My particular favourite is the Cow Dung Festival, also held in County Mayo. It is clearly an occasion for anyone with a taste for the bizarre. A Cow Dung Festival Queen is selected – not perhaps an accolade you would readily put on your list of accomplishments. Then there is the highlight of the day – cow dung bingo. A field is divided into squares. When names are gathered and bets placed, Betsy – the festival cow – is ushered in.”

      http://tinyurl.com/8cqrcv5

    • RoboRedaktor strikes again, Ed… There’s one missing… a MacroCompanion piece immediately above CowDungBingo… Top ‘O The Mornin’ ta y’now…

    • Yellow Helicopter

      Amen Joe!

  2. $50,000 in 1980 is the equivalent of $150,000 today. i.e. the ‘appreciation’ is less impressive when you consider that inflation has eroded a dollar’s purchasing power to one third what it was at the time of purchase.

    • Yes, I was just reading the original article and had a laugh when I read “I bought my first small bungalow in 1972 and sold it 9 years later for 2..5x what I paid for it.” In that inflationary period, you could have bought a CAR in ’72 and gotten 2.5x the price for it in ’81.

      Actually, the BoC’s inflation calculator says over that period it was 227%, so our hero actually beat inflation by 1%/year

  3. Looks like Mom isn’t the only one with an incomplete financial education. Some people just win the lottery I guess.

  4. does owning a 700k house make you a millionaire? If she made minimum wage all her life and didn’t know what a stock was, how else did she make money? If her house is worth 500k in two years, is she still a millionaire? As a millionaire aren’t u supposed to have investments/assets yielding say… the average joe’s salary in a year?

    So are all the vancouver boomers who bought a while ago and have fully paid houses millionaires? what the fuck is a millionaire then?

  5. You can certainly do well in real estate by running an illegal rooming house.

  6. I don’t understand how if she retired from her minimum wage job at 49 she can stay home or what that has to do with the house. Is she still renting all those rooms? Because last time I checked running a rooming house was actually work. There are tenants to rent to and kick out, cleaning, renovating, cleaning and you have to deal with strangers in your living space at all times.

    • I thought the same. Yes, she is a millionaire by owning this million dollar old home, but it demands so much to be invested in – the home is old, needs a lot of repairs, the property taxes etc. and the living expenses need to be paid for – regardless she owns the home, she needs lots of money to get by and to go out to restaurants. Does she eats out an equity, maxed out a HELOC on that home, did she take the CHIP seniors type of HELOC? Well, she might be in for a surprise then when the next property tax assessment goes under the amount she has in HELOC on it – and I fully expect a lot of problem with these type of credit lines when the banks are going to come asking for their money after they see that the properties values started to fall.

  7. Anyone else see the irony of OP saying “forget all the investment crap” and then in the next sentence talks about how much the house has appreciated? He could have described the stability of her mom living in the same place for xx years, for example.

  8. “She had no clue houses could appreciate, in fact, she has no idea what appreciation was”.

    yes, believe it or not people buy houses for reasons other than financial gain.

  9. I better go tell my dad he is a “demi- millionaire”.

    He paid $55K for his house in 1977 and today his neighbours sold for between $320-340K……and he’s still there.

  10. Try buying a million $ property and renting all the rooms and paying it off in 5 years today! And in 1980 a person earning $3.25 . hr. min. wage would not have qualified for a mortgage when lending guidelines were much tighter; so this story’s a bit fishy. Even if the house is paid for, how does she afford to watchTV all day and eat out all the time? It’s not as if she has a government pension at age 49!

  11. I thought someone did the math once and with the price of appreciation minus all the costs involved in owning you end up breaking even? And how did someone making minimum wage manage to qualify for a mortgage back in the olden days?

  12. That’s right.

    Question for Motown Philly: If your total cost of homeownership over 32 years is $700K, and the house is now worth $700K, does that make you 7/10ths of a millionaire?

  13. How does someone eventually profit from a house that’s appreciated so much? Do they sell and live in a trailer park and count their money. Really, it’s the boomer’s children that will profit when the parents kick the bucket and pass on all that appreciation to their little slackers. I am one such slacker, and I believe I won’t be able to pass on the same favor to my spawn.

  14. A house in the middle of downtown Toronto? Those haven’t existed in decades.

  15. Your mum’s not a millionaire unless she sells the house.

    The only way a house can make you a millionaire is if you sell it…but if everyone sells, how many actually get that million dollars they thought they had!

    That’s right–almost no one will realize this million dollar winfall. That’s the name of every ponzi game. Sorry. You lose.

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