#27 – Market Chaos!

The guys discuss how hard it has been to not hit the panic button and buy everything in sight. If you found this podcast you’re probably familiar with the FIRE movement that has grown in popularity recently. Here at the FI Garage, we’re all on the path to FI, however, we consider the RE part optional.

Beer – Bowen Island Artisan IPA [1:20]
  • Brought to you by Monique from Ontario, the winner of our Smith Manoeuver contest.

Panic! [2:40]

  • The Mechanic wants to know what the safe withdrawal rate on his toilet paper is (3:17)
  • Bidet Stocks (3:25)
  • We discuss the struggle to not panic buy ETFs and Stocks (4:01)
  • Purchasing cruise ship stocks (7:02)
  • The path to FI can give you more certainty and security in uncertain times (9:40)
  • Having an Emergency Plan (11:45)
  • Spending less so we have more available for investments (12:05)
  • Risks of rental properties with tenants not being able to pay rent and the possibility of reduced rents (14:30)
  • Listener Sean had some pointed comments on our interview with Randy Molland (16:35 & 22:35)
  • Listener RJ commented on our Distracted by FI episode (22:05)
  • Panic selling and adding to your woes (24:28)
  • Why it’s nice that real estate is way more difficult to panic sell (26:45)
  • How having an investment plan can help you stay the course (29:20)

1 Comment

  1. Hey guys, thanks for discussing some of my questions on the show.

    I think I was a bit clumsy in my approach to my last comment so I will be more direct here. The Accountant’s clarification that the 15-20% is cash-on-cash was very helpful, so where is my argument.

    I have no doubt the some people have RRSP’s returning 1% but I would be shocked if anyone in your audience is in this situation. I also believe most investors, including your audience, are not using leverage to invest let alone at a 4:1 or 5:1 ratio which is common in real estate. The cash-on-cash return looks great because it is using leverage but the denominator is your money only. To compare an unrealistically low number like 1% to a high number like 15% that is only achieved through leverage is not an apples to apples comparison. I know you guys didn’t make this comparison, your guest did, but it concerns me as I think it could lead someone to peruse real estate investing naively. Most people I have encountered who advocate real estate investing have something to gain (real estate agent, mortgage broker, etc) and an investor could get into trouble by only listening to the good news stories from people with vested interests (including your guest).

    I think real estate investing has it’s place and it can out perform the market. But, my belief is these higher returns are derived from increased risk, leverage (more risk), and compensation for the continuous work (read part time job) a landlord put into managing properties.

    On a different note, I have felt the same pull to dump all available funds into the market as it’s going down. My enthusiasm has been tempered by the balance in my HELOC investment account which is currently at -30%. This account was opened in April 2019 and I immediately dumped a large portion of our HELOC into it (sad slide whistle sound). Regardless, I am forging forward and have put in place a regular investment schedule that will have me buying in weekly.

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