Garth, you don’t impress me much

A few weeks ago a client of mine asked me what I thought of Garth Turner. The truth is, I’m not sure I have much of an opinion. I’ve read some of his work before – a column here or a blog post there – but I’ve never delved into what he’s all about. So, I had to know why this question was posed in the first place.

As it turns out, Turner was coming to Halifax for a speaking engagement. The event was free, open to the public and being put on by a local financial advisor. The client was interested in attending but wanted to know if I thought it was worth it. I contacted the advisor in question and as one advisor to another, I inquired about possibly attending the event. It wasn’t an issue, so off we went.

The room was packed. Turner had attracted quite a crowd and if I’d been the advisor hosting the event, I would have been grinning from ear to ear. I’ve never seen that kind of turnout in Halifax for an advisor-sponsored event. I even spotted quite a few of my fellow peers in the crowd.

When Garth finally took to the stage he got right to it. He talked about “booms” in gold and real-estate and he showed photos of little, rundown houses in Ontario and then flashed their massive price tags on the screen. One little blue bungalow with chipped paint, surrounded by a poorly maintained chain link fence had apparently fetched a price tag in the neighbourhood of $990,000. Next, a photo of a pretty nice looking home selling just across the border in Michigan for $15. No, that is not a typo. The price for the home was $15 (USD of course).

Now, while the photos and price tags were very fascinating, Garth was speaking from an Ontarian’s perspective. His examples didn’t apply in Halifax. If you buy a $900,000 home here, it’s a mansion. In this part of the country, while our housing prices do fluctuate, essentially no boom though, no bubble, nothing to pop.

Myself? I live on a 4 acre lot in Hammonds Plains, Nova Scotia, a suburb of Halifax. I’m 20 minutes from what feels like Halifax and 30 minutes from downtown. I have an ordinary home – a little split entry, no marble counter tops or 9 foot ceilings. It’s really rather boring, but we like it. We built our home six years ago and it appreciated about 15% in the first 3 years and about 8% in the last three. I don’t mean per year. Since we built it in late 2003 it’s increased in value by 23%, total. Not all that exciting, but about the standard in our area. Keeping that in mind, it’s difficult for me to buy into a real estate bubble forming here in the first place, yet believe there is an impending pop coming. However, I’m not an economist. I bought my house to live in and while it does increase my net worth as its value grows, I don’t see it as part of my retirement plan.

Continuing his speech, Turner began speaking about debt. Well, you know I got excited about that. As it turns out, he had a lot to say about Canadian household debt. He went on at some length about Governor of the Bank of Canada, Mark Carney, and the BoC’s inevitable interest rate raise. He explained to the crowd how a few quarter point hikes could change their mortgage payment quite drastically, effectively crippling some. He gave examples of a mortgage payment today of $1,400 a month climbing up to $2,300 a month upon renewal if rates changed as much at 2 or 3 %.

“If you are in a big house now, sell it,” was his message to baby boomers. According to him, what they really need is cash.

The topic of the ever-growing mound of debt was an overriding topic. Turner’s focus on debt was momentary. Essentially, the message was this – refinance expensive debt and pay it off.

To that I say, duh!

That’s like saying don’t spend more money than you make and don’t eat more food than you should. We all know this but too many of us don’t know exactly how to go about accomplishing it or how to change our perspectives or behavior to attain what we say we want in these areas. If it were that easy, there would be one book on diet and exercise and one book on personal finances and we’d all be fit and rich.

I was truly disappointed with all the build up surrounding Turner and then…nothing. His talk with us was bland, paint-by-number financial advice and surprisingly lacking coming from someone who is often touted as a “financial expert”.

He did, however, have some more detailed advice for the spectators. He offered up potential financial concepts such as using insurance like UL to create tax-efficient investments. RRSP meltdowns and leveraging were covered. Even TFSA’s got a fair mention, as per usual.

I have to say I left that presentation with an uneasy feeling about what Turner was saying to the attendees that evening. They were band-aid solutions that didn’t address the injuries or the causes. The same old advice regurgitated by a different voice.

Turner is a good speaker and I’m sure many left pleased with their experience, encouraged to check out what the advisor who sponsored the presentation has to offer. But my thought is – What will change in the financial behavior of the guests that evening? The answer is nothing because while the effect of our financial conundrum attracted the brunt of his words, the audience was not advised on how to better their circumstances.