Posted in Investing, Real Estate

Three Lessons Learned from Owning a Bridle Path Home

The Bridle Path or “Millionaire’s Row” seems the pinnacle of Canadian home ownership.  Celebrities such as Celine Dion, Drake, Prince, Mick Jagger and Gordon Lightfoot have all called this neighbourhood home.  Living in the Bridle Path is considered “making it” by many ordinary Canadians. 

My husband and I lived there with our four young children between 2012 and 2014 and there were definite pluses, the biggest being the park-like back yard.  But I would not go back even if I could.

The three lessons I learned from owning a Bridle Path home are as follows:

Lesson One: If you need a mortgage to afford a home in the Bridle Path, this neighbourhood is not for you. 

I was told this by one of our lenders at the time and thought it a strange comment, but in hindsight he was absolutely right.  This is a neighbourhood for extremely wealthy people – celebrities, titans of industry and old money.  If you require a mortgage to join them, you should move somewhere else.

Lesson Two: This is not a neighbourhood in the real sense of the word. 

You will not have any neighbours within view when you exit your home; your children will not have any playmates on the street; no one will have eyes on your house when you are not there; almost every house has large fences or walls around it; and you won’t meet any of your neighbours.  There is no street activity like ball hockey, raking leaves, playing hoops in your driveway, sitting on the porch, or walking and jogging like on a normal street.  This is an exclusive, estate-lot type setting, where everyone keeps to themselves and everyone expects privacy.

Lesson Three: Buying a home in the Bridle Path is not an investment but an expense. 

Even without a mortgage you will likely have property taxes of $10,000 per month, utility bills of $10,000 per month, and maintenance fees of $5,000 per month.  That tallies $300,000 per year in home expenses even without a mortgage.  Hence this type of home requires that the owner have a robust ongoing income from other sources to cover the $25,000 monthly bills. Even if the home increases in value over time, the ongoing expenses will likely eat up any capital gain.

Drake is a perfect resident of the Bridle Path.  Normal folk not so much.

Posted in Finance

Charles Dickens was right

Charles Dickens wrote David Copperfield in 1850. In it, he introduced a character named Wilkins Micawber. Wilkins said something incredibly wise yet incredibly simple:

Income 20 pounds
Expenses 19 pounds
Result: Happiness

Income 20 pounds
Expenses 21 pounds
Result: Misery

That concept is fundamental to financial management. If your income does not cover your expenses, you will struggle in life whereas if your income does cover your expenses, even by a little bit, you will generally be happy financially.

When I apply that concept to my own life, I realize that I either have to earn more income or reduce my expenses when I am not in balance. The key is to make more or spend less.

Charles Dickens was right!

Posted in Finance, Investing, Real Estate

Norma Walton Talks, Playing the Victim

https://www.podbean.com/media/share/pb-zmb9u-9e685d

On this episode of Norma Walton Talks, she discusses how you can tell if someone you are dealing with is “playing” the victim without actually being a victim.  Norma identifies four clues or characteristics that define people who like to “play” the victim for their own selfish motives and objectives, while at the same time sharing her experience with one such person.