I didn’t know Darth Vader worked for Goldman Sachs?? :-) What are 3 money myths about housing?
by Tim Broadway
TODAY is my last day at the Empire.
‘I no longer have the pride, or the belief’
After almost 12 years, first as a summer intern, then in the Death Star and now in London, I believe I have worked here long enough to understand the trajectory of its culture, its people and its massive, genocidal space machines. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, throttling people with your mind continues to be sidelined in the way the firm operates and thinks about making people dead.
The Empire is one of the galaxy’s largest and most important oppressive regimes and it is too integral to galactic murder to continue to act this way. The firm has veered so far from the place I joined right out of Yoda College that I can no longer in good conscience point menacingly and say that I identify with what it stands for.
For more than a decade I recruited and mentored candidates, some of whom were my secret children, through our gruelling interview process. In 2006 I managed the summer intern program in detecting strange disturbances in the Force for the 80 younglings who made the cut.
I knew it was time to leave when I realised I could no longer speak to these students inside their heads and tell them what a great place this was to work.
How did we get here? The Empire changed the way it thought about leadership. Leadership used to be about ideas, setting an example and killing your former mentor with a light sabre. Today, if you make enough money you will be promoted into a position of influence, even if you have a disturbing lack of faith.
What are three quick ways to become a leader? a) Execute on the firm’s ‘axes’, which is Empire-speak for persuading your clients to invest in ‘prime-quality’ residential building plots on Alderaan that don’t exist and have not existed since we blew it up. b) ‘Hunt Elephants’. In English: get your clients – some of whom are sophisticated, and some of whom aren’t – to tempt their friends to Cloud City and then betray them. c) Hand over rebel smugglers to an incredibly fat gangster.
When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces telepathically. I was taught to be concerned with learning the ropes, finding out what a protocol droid was and putting my helmet on properly
so people could not see my badly damaged head.
My proudest moments in life – the pod race, being lured over to the Dark Side and winning a bronze medal for mind control ping-pong at the Midi-Chlorian Games – known as the Jedi Olympics – have all come through hard work, with no shortcuts.
The Empire today has become too much about shortcuts and not enough about remote strangulation. It just doesn’t feel right to me anymore.
I hope this can be a wake-up call. Make killing people in terrifying and unstoppable ways the focal point of your business again. Without it you will not exist. Weed out the morally bankrupt people, no matter how much non-existent Alderaan real estate they sell. And get the culture right again, so people want to make millions of voices cry out in terror before being suddenly silenced.
The following is an excerpt from How Not to Move Back in With Your Parents: The Young Person’s Complete Guide to Financial Empowerment, by Rob Carrick.
Who doesn’t think buying a house is one of the few total no-brainers in personal finance? Houses appreciate in value, sometimes at rates that make the stock market look comatose. At worst, a house is a forced savings plan that shows its value later in life, after you’re retired and are ready to downsize. You’ll sell your house, take away a big chunk of tax-free money and use it to top up your retirement savings.
This is the conventional wisdom on why buying a house is a great thing, and it’s just begging to be challenged. That’s the point of this chapter. I fully expect most readers will buy a home, and they’ll be well prepared to do it after reading the next several pages. But at least they’ll go in with a much clearer understanding that our national obsession with houses as an investment is potentially destructive.
It’s hard to think of an adult rite of passage as universally and enthusiastically supported as buying your own home (house or condo). People of all income levels and cultural backgrounds want to own a home. There is no influential anti-home ownership faction to be found anywhere.
There are lots of reasons for this, the first being that it’s a basic human instinct to want your own space. There’s the greed aspect — houses have been unbelievably good investments in some cases, and new buyers have hopes of making out similarly well. Housing is also a huge part of the economy, so it’s naturally looked upon favourably. Home ownership is also a value pushed by governments. That’s why we had thirty-five- and forty-year mortgages for a while here in Canada, and why zero-down mortgages were briefly allowed. Houses were getting expensive and people needed help to buy them. The government delivered.
Renting a home has . . . well, a low-rent feel to it. It suggests impermanence, shiftlessness, a sense of settling for second best. It’s an uninformed prejudice that we would do well to get over because it’s preventing people from making smart decisions about whether buying or renting is a better option.
Three money myths about housing
• Houses are always a good investment. People usually say this after a stretch of years in which house prices have soared, just as they get excited about stocks after a few good years for the markets. Houses can be a good investment, but a lot depends on when you buy and where you buy. Big, growing cities are better than small industrial towns in decline. That said, you can lose money in big cities, too. When my wife and I were looking for our first home in Toronto back in the early 1990s, we viewed several houses put on sale by people who had paid top dollar in the late 1980s and then watched the value of their home plunge below what they owed on their mortgage. Between April 1989 and February 1996, the average resale home price in Toronto fell to $192,406 from $280,121, a drop of 31 per cent.
• It’s smart to buy as much house as you can afford. Building on the previous myth, this old bit of nonsense is based on two often erroneous ideas: one, that bigger houses are always better; two, that your house will become more affordable over time (ignoring such matters as slow wage growth, inflation and the cost of having kids).
• Your house will pay for your retirement. The thinking here is that you’ll sell your house for a big whack of tax-free money (you generally pay no tax when selling your principal residence), carve off a piece to buy a condo or a cute little bungalow and then invest the rest to pay for a carefree retirement. The flaw in this plan? So many people have done this that the price of condos and cute little bungalows has soared. You’ll probably have some money left over when you sell the family home and downsize, but it won’t be a big factor in your retirement savings.