Millennial eulogy

“I’m an elder millennial with my 40th approaching in less than two months,” he says. And this has Trevor worried. Contemplating his life’s decisions. After all, tempus fugit. Death must be at hand.

There’s more to worry about. He’s a lawyer. He lives in Vancouver. And he’s trapped in a condo.

In his words, here is the sad story (except the MSU is good).

“I’ve been an avid daily reader of your blog for about the last 3 years now, and it’s been immensely informative! Unfortunately, it was about 4 years ago when I bought my condo downtown Vancouver, at the height of the pandemic craze.

“I paid $625,000 for a one bedroom built in the early 80’s, and it would sell for less now. There is about $460,000 remaining on my VRM, and I pay about $2,250 per month with renewal coming up next July. I bring in approximately $250K/year as a lawyer, so the monthly payments are not a stretch, and I have roughly $300K in savings with $110K of it in registered accounts. I do enjoy using a chunk of my disposable income on nice restaurants, vacations and other luxuries, but still contribute $4K-$5K per month to savings.

“I’m single with no dependents and the dawn of 40 is making me really ponder what’s next. I’d really like to live in a nicer place, though the wisdom from your blog seems to pretty consistently advise against purchasing a new condo. What would you recommend in this scenario – sell the condo, take a loss and rent my dream condo? Keep saving and see how the market shakes out over the next 1-2 years? Stay the course and lock in a fixed rate next July, and re-assess when 50 is on the horizon? Any advice would be greatly appreciated!”

Well, Trev. Where do we start? You’re about to become middle-aged, have hedonistic Millennial tastes, made a lousy real estate decision, earn lots of money in a prestige job and yet write to a pathetic blog for life advice. Probably no dog, either.

First, the condo. Like Toronto, Van has a mess of new, unsold units and another slew of resales on MLS. Condos have fallen out of favour, especially those like yours in 40-year-old buildings where the threat of a special assessment is real. The cost of living there is huge – mortgage payment, strata fees, property taxes together are likely twice the monthly rental cost of the same unit, considering you’ve lost equity and have a negative rate of return on the $125,000 downpayment.

Selling now (and paying commission to do so) will mean a substantial loss. Selling in a year, however, could bring an even larger loss. Plus you’ll be 41 and that much closer to the grave (sheesh) while the mortgage taken at a rock-bottom rate in 2021 will renew at a much higher cost, adding to the financial drain.

So why would you not move, cut your losses and close that sad chapter?

Then, what next?

Rent, of course. You have no spouse, kids, pets and zero reason to bury your liquid wealth in another condo unit which may suffer the same fate as the last one. Lease the unit of your dreams, and it will still cost relatively less than the banger you have now. When the perfect Mrs. Tort comes along, you can buy property. But get some with dirt.

Meantime, crank up the financial action. You have an after-tax income north of $163,000. That’s over $13,000 a month – and yet you’re saving just a third of it. That’s a helluva lot of resto meals and vacations, bro. So if you’re actually concerned about changing priorities in your rapidly-extinguishing and tragically-short life, stop throwing precious take-home pay around. Stuff the max into your RRSP and TFSA. Buy some art. Invest in a start-up. And stop wasting time. Work at becoming a partner. Volunteer on East Hastings. Walk dogs at the shelter.

Mostly, grow up.

You have four or five decades of life ahead of you, a job that AI won’t eat, double the income of most Canadian urban families plus the freedom, flexibility and mobility that most people dream of, yet never experience.

It’s not just about the condo. Yes, buying it showed a lack of judgment as you succumbed to financial illiteracy and FOMO, but you understand that now.

Pull on the Big Boy pants, Trev. Go make change.

About the picture: “This is Junior in Mississauga, ON.” writes Joe.  “We think he sleeps this way because he’s worried the apartment is going to rotate like the hallway in Inception. We appreciate the years of advice, Garth.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.