well where are we today Teen well we are actually back from the trailer
wasn't that cold it was free freezing that was Monday night yet today beautiful weather
it's just like summer look we're in short sleeves it's always warm in the apartment
this is very true isn't it so i thought we should have a little chat about finances what
do you think i think that's a really good idea and then specifically the cost of living because
everybody has to pay to live they absolutely do yes and you know one thing i was going to say is
like Norm are we actually throwing away our money renting absolutely Teen we're growing
poorer by the minute and i guess you're going to say married to me that was a reason i would never
say that you're an asset oh great but the thing about this whole question renting it's throwing
your money away that's what we used to think as homeowners we did didn't we you remember that
absolutely all the time we had houses and here here we were being mortgage poor no money yet we
thought people who were rented were crazy crazy people so it's the exact opposite basically we
have learned a lot since we've been renting this last five years yeah we have haven't we and then
the the opinion is the exact opposite that we found that renting is building an asset
which is pretty amazing really isn't it it is so when you think about it we've been
here five years now so when we first moved in basically what happened was you take out a lease
and you are freezing what you're paying at the market rate of that time and the reason you're
freezing it is because we live in a province that has rent control and so because of that
the landlords are only allowed to put the rent up by a government mandated amount so providing your
in good standing with your rental payments they can only increase it by a certain amount each year
that's true isn't it so the other thing that balances that argument is that
if we left our apartment to move somewhere else then the landlord could put this apartment
up to market value which is a lot more than what the annual rates would have been
so if you look at the rates Norm that we've actually been paying the last four years we've
had relatively small ones haven't we of like 1.8 percent that's right each year now this next year
is a little higher at 2.2 percent it is but that's okay because it works out to be a very
small amount really in the realm of things doesn't it does so if we went to rent another apartment in
this town where we live it's going to cost us we worked out between three to four hundred dollars
more per month to get the same thing that we have right now I know that's amazing so if you
look at an average of say let's call 400 we're talking about nearly 5,000 a year that it would
cost us to move back into back into our own apartment which is kind of crazy so now so now
we're building an asset and the other piece of the jigsaw to this asset and the our argument about it
is that also in this province we have the right as tenants to sublet our apartment so now we
know that these rents are going for three to four hundred more per month than we're currently paying
if we wanted to move somewhere else we could hold on to this lease sublet and put 5,000 a year into
our pocket as income yeah that sounds another of our bright ideas doesn't it Norm it really does
so that's where rent can become an asset and not a liability absolutely but you know what Norm
one of the things that people have talked about and we're aware of too
is that a lot of people are concerned about legacy for their children and grandchildren
and they kind some people are confused when they think you move into that renting market that you
haven't got that house to leave them so maybe you could explain a little more to it's actually the
reverse isn't it for us yeah we've had we've had several comments in the comment sections
of some of these finance ideas that we have and Tina's right a lot of people are worried
that renting they wouldn't have a legacy to give to their children of a home of the family home
and there's two points we've been through where our parents have passed away
and as the children in in my instance I me my brother and I got the family house
but it was a blessing and a curse because we had to clear out the family house
58 years worth of always stuff a lot of hard work for you wasn't it turned out my dad was a bit of a
hoarder in the garage and so anyway we had a lot of work to turn that house around clean it out
and sell it for us to realize the asset so that's one point and the other point
is once you have your capital out of your house we came up well i came up with this little story
didn't i Tina loved it i loved this story so if you think about the capital you get from
selling your house as being an orchard so it's an orchard full of trees full of apple trees
or if you're in Florida full of orange trees and so every year when the apples come
you don't chop the tree down no to harvest the apples hopefully not so you take the apples which
we will use as the euphemism for interest so the tree stays behind and you eat the apples
yeah and that's what happens with your capital if you invest it in reasonable
investments that is safe for the future that comply to your risk tolerance then all you're
doing is spending the interest and you're leaving the capital as your legacy for your
children which you know when you think about it sort of as sort of eating the apples is
not taking away is it from the main thing i'm not really fond of apples that much and in actual fact
i think that our kids would think it that it's a great idea they don't have a house to sell is
already set up that's right so the other just in closing the other thing about renting to consider
is the mobility aspect we have sold about eight houses in our marriage we moved around a wee bit
and they can take up to a year to sell yeah our last house probably was two years yeah from start
to thinking about it we're in the countryside there aren't as many people buyers are there
no there weren't so all of our dreams of coming into this apartment and living a new life
took 18 months to two years to come to fruition whereas anybody renting can just give the
notice either 30 or 60 days and you're gone you're gone to your new life so that's just another
positive thing isn't it it really is so we just really wanted to leave that with you
keep eating the apples and don't chop the tree down and then you've got the legacy
for the children you do indeed so this was just another one of our brain waves yeah
just sort of and we're so glad you could join us but we also hope that everybody is staying safe
staying well and enjoying life at the minute yeah have a great weekend great week great day
yeah and we'll catch you on the next video thanks for watching bye bye