I ordered bi-weekly flower delivery from a local florist. Before it let me check out I *had* to put something in the notes section so I flippantly wrote the above. I had no idea they’d actually hand write a card! đ¤Śââď¸
Mr. Tucker has watched a Youtube channel called Punk Rock MBA periodically for a few years now. I watched a few videos myself but since it really isnât music I dig, I never subscribed. In September 2024, he announced that he was leaving, posted one last video and then grabbed his toys and went home.
Ok, sure. Thatâs fair. Shit gets old. Heâs onto other things now.
But when Mr. Tucker went to read the comments on the last video, he discovered some very, very, angry people. I guess an interview with the Punk Rock MBA guy dropped, gained traction and pissed a LOT of people off. This is the interview:
The TL;DR of it all is: he was only in it for the money. He was good at marketing, figured out what drew people in to watch, like and subscribe to his channel and when he met his financial goals, he peaced out. Some people were very understandably pissed off.
Although Iâve never been emotionally invested in his content, I can understand why people are. The key here is that our entire cultural communities are based on parasocial relationships. We get attached to communities and invested in like-minded people in a way that we feel some kind of ownership over them. So when they do things we find shocking, we feel angry and betrayed. Social media has ramped the problems with parasocial relationships up to 11.
Thanks to social media, the line that has historically been drawn famous people and the Hoi Polloi has been deep: rarely did you know something about your favourite stars outside of magazines and tv. You never had access to people whose art you enjoyed like you do today online. There was this firewall of gatekeepers who fed us scraps of information via their content. But now everyone creates content and there is no longer that barrier.
Of course, there have always been fans who have gone too far. Keanu Reeves had his house broken into by a fan and John Lennon was murdered by a fan, to name some high profile examples. But these were before the internet had an absolute chokehold on interactions between fans and high profile people. In fact, with the advent of social media it has become a way to GET famous if you manage to get a viral post or two off the ground.
Chappell Roan enters the chat
Chappell Roan is a very interesting test case. She went from playing small gigs and trying to leverage social media to gain traction for her music â like many artists who market their talents. But unlike 99.9% of artists, she had LARGEST leap to fame that I think anyone has ever had in such a short time. This does not mean she appeared out of nowhere â she was opening for Vance Joy 7 years ago and has been trying to get her music out there for a long time. But this chart has made the rounds and it is important to note just how huge she got in less than a year.
I feel like this essay by Eliza McLamb sums up a lot of it (found via Bernsteinâs podcast, which is worth the watch: A Bit Fruity). What do you do with a stratospheric rise to fame? How do you manage it psychologically? In this day and age, the retort is always, âBut this is what you asked for. Itâs the price of fame.â But people are stalking her family at work, theyâre stalking her and apparently she has even been sexually assaulted. I think we all need to figure out where the line is and unfortunately because some people are unable to even see that there is a line, the line must be very clear. Even then, as Eliza mentions in the podcast, Chappell Roan asking this of people is, âlike trying to hold back the oceanâ but she also says that Roanâs coming out and setting this boundary may carve a path for other artists in the future to also set boundaries for their own sanity.
The lines get blurry quickly from âbig gay sleepover partyâ to âthis is just my jobâ when your fanbase grows by millions and millions of people so quickly. Naturally, the parasocial relationship that drew people into her fanbase now feels betrayed when they learn that CR is not their friend and that the big hug they thought they were getting is now just an entertainment machine.
Itâs Britney, bitch
We collectively have gone through a huge reckoning with the price of fame, most recently with the Britney Spears conservatorship. But I donât think we have learned our lesson.
The entire world drove her insane, then we blamed her for what we did for her. The found of TMZ, Harvey Levin famously said, “Britney is gold. She is crack to our readers. Her life is a complete train-wreck, and I thank God for her every day.” This was a very normal thing to say in the Noughties but now it feels just gross, knowing what we know now. Heck, I didnât even pay attention to her, or to magazines or tv and media in that decade and I still feel gross about being a part of the culture machine that abused her, allowed her children to be taken away by her lying ex-husband, forced birth control on her and then led to her indentured servitude where she was forced to generate money for her abusive family. If you have covid memory loss or live under a rock Wikipedia has a great synopsis of this funhouse of horrors.
When all this came out we were horrified. #FreeBritney indeed. Freed she was from her conservatorship but fans still regularly call authorities to do wellness checks on her. I remember once I was served up a video of her dancing with a knife (her videos are mostly of her dancing!) and people were freaking out â and it was in the ramp up to Halloween! It was clearly meant to be seasonally-themed! But it’s yet another X against parasociality in the age of concern trolling. We get to directly affect her life by calling the cops to do a wellness check instead of TMZ being the intermediary of traumaâŚoh goody?
Blurred lines
Social media has commodified authenticity and I think for a long time there was sincerity there but it couldnât stay that way when there was money to be made. Like the optimism in the 90s that the internet would be the great equalizer, I think people believed social media would do that as well. Artists could build fanbases[1], get their art or music out to a worldwide audience and make a viable go at becoming somewhat famous. But when these sites moved from chronological to algorithmic-based feeds, the gloves were off. Not even the drama of the Cambridge Analytica scandal made people angry enough to leave.
But like frogs in the proverbial pot that is set to boil, these platforms demanded more and more. More reels/short videos, a more robust posting schedule, more engagement in the comments and DMs. The algorithm favours divisive posts and so the posts became more divisive. We were constantly feeding the beast and the beast devoured our time and energy but gave us less and less in return. People were complaining about shadow bans and other shady practices. Artists started complaining that they couldnât do art and also keep up with the intense posting schedules that these platforms demanded of them just so that they would have their content served up to âŚthe people who signed up for, and who actually want to see, their content. It boggles from a human point of view but not from an economic one: these platforms need you to keep churning out more and more content so they can keep eyeballs on their apps and the advertising dollars keep rolling in. So if you arenât creating content for them, theyâre going to throttle what content you do share. So if the authentic folks are throwing in the towel, who is left?
Nature abhors a vacuum
Grifters. Grifters like PRM.
These folks peddle an air of authenticity and meanwhile clean up in the background on topics they just donât give a flying fuck about. Humans are designed to trust and for a long time the internet sold us this narrative that you could do what you love AND be rewarded for it. So we just trusted that the creators who made videos about the things we loved, ALSO loved those things. We craved community and like-minded people but what we got was clever marketers who are sussing out what the people want and giving it to them.
But should we be mad at PRM? Afterall, we got the entertainment we were promised. He released finely tweaked videos devoid of opinion and substance so that we could imprint whatever feelings or beliefs we wanted to onto them. You have to admire the marketing skill, to be honest.
But conversely, he knew exactly what he was capitalizing on: people feeling a parasocial connection to a creator that they could relate to. An expert who loved the same music as they did and someone who felt comforting to watch. There is a reason that he wasnât up front about his strategy from the get-go: he knew that people werenât just looking for videos, they were looking for a community.
Itâs fundamentally a pig butchering scam but cast with a wider net and no victims except the attention and time you spent watching the ads on his videos. Oh, and the betrayal some people feel for trusting.
The same need for community that Chappell Roan and PRM leveraged had two completely different outcomes: one flew too close to the sun like Icarus and got burned, and the other little piggy went âwee, wee, wee all the way home.â
Small f famous
Of course, between BIG B Britney and BIG C Chappell & me (not famous at all) is myriad of somewhat famous people who live a life that Eliza McLamb (in her essay linked above) calls, âcross the street famous.â The folks who can mostly go about their daily lives but who have 50K-2M followers on a variety of platforms. They can do their own groceries or go to a restaurant but at a film or music festival theyâd probably get swarmed. I feel like these folks are in a more precarious situation in terms of stalkers or fan demands: they can survive on their art, but they canât really afford a security detail.
I see a lot of these in-between folks bowing out of having an online presence for the most part. Theyâre still posting shows and events but I feel like if they donât have to be a part of the social media circus, they wonât be. There used to be more personal twitter accounts, tumblr blogs and Instagram accounts that had behind-the-scene content that fans loved. But a lot of it has dried up in recent years and I think that is because some fans are so unhinged that it feels invasive. Parasociality has made the comments get weirder and weirder and I donât blame folks for retreating from posting as fans (and haters) believe that they should be able to barf up the most horrible takes for the world to see.
A great example in that category of famous-but-can-probably-still-do-groceries I would put a band like Motionless in White[2]. A pretty solid following, a bunch of albums, tons of years of grinding/touring & they’ve built a pretty loyal fan base. A band in that category of folks who are big in their own genre but unheard of by most people on the outside.
This (shaky, poor quality but yet excellent) interview highlights that when you are small f famous, you still reach a point where you get all of the craziness of fame but without the benefits of big F fame. Of course, I will point out that Chappell Roan is a petite woman and Chris Motionless is a very tall man but this nutter called HIS MOM. She found their drummerâs phone number and even when confronted did NOT STOP. I have no idea how or if this situation was resolved but the absolute audacity and realization that you are dealing with someone who may not even have the capacity to understand is a mindfuck, too: what do you do with someone who doesnât even comprehend that their behaviour is scary AF? Itâs a funny story that makes for great interview fodder but there is darkness, too:
Look, I want to say for the record that I couldnât really tell you what most of the musicians I enjoy look like out in the world, and I donât follow them on social media. This is not some edgy flex, I am certainly not cooler than thou (and may I remind you that I trip over my own feet with alarming regularity?) I just donât know them & I probably donât want to. While I love music (what kind of psycho does not?) I have just learned that the phrase ânever meet your idolsâ is just sound advice[3]. I would rather not care to learn that people whose music/movies/books I relate to are just unpleasant people, generally, let alone discover that they are absolute monsters[4].
I know people think CR is a monster for boosting her career via social media, encouraging parasociality and then turning around and telling people to stop talking to her. But it is absolutely not the same. She has 6M people following her on instagram alone. That means that if she spent 1 minute with each of them, it would take her 4166 days or 11.41 years to greet fans. Who has that kind of time?
Where do we go now? Oh, where do we go? (Sweet child oâ mine)
Clearly, boundaries are in order. But there are no clear boundaries when in the west weâve watched Princess Diana get run off the road & killed in a car accident while being chased by Paparazzi. The laws are also still in flux in terms of rights to privacy. (But some scholars are arguing for better definitions)
In the CR debate, many people agreed with her in principal but disagreed that she shouldnât expect people to not recognize her in public and talk to her. Like most things in the past 20 years, the internet has made things incredibly murky and having a social media presence where youâve leveraged peopleâs connection to you, it seems very difficult to walk it back now that youâve achieved superstardom. I think in CRâs case she had probably slogged it out in the trenches for a long time believing she may only reach small f famous so she was vastly unprepared for the Fame Slingshot ride to launch her straight into the stratosphere. Itâs clear in her video that she is exhausted and angry that her life & her family to come under siege by rabid fans and unfortunately, the normal fans get swept up into the fray as well. I think that is where the disconnect is: normal people feel they shouldnât be punished for the behaviours of a few bonkers folks but unfortunately: #yesallfans.
We have come to expect 24-7 entertainment for free, or for very little (being served up ads). We feel incredibly entitled to having everything from videos, music and art on demand when we want it (and we want it now!). So itâs not surprising that people feel entitled to creep into the DMs of, or demand hugs from, their favourite artists. Itâs the culture weâve created. Itâs the kind of culture where clever marketers like PRM win, and art loses.
Since I have already simped for capitalism by having a blog marginally related to personal finance, I donât think it will shock anyone to see that I think the only solution to this issue is: make people pay up.
I know it seems crass to reduce a fanbase to a monetary transaction, but I think it is the only fair way to manage. There are not enough hours in the day to answer every DM, meet every fan, and take every selfie with fans outside the venue. I am seeing more and more bands do fan meet-and-greets (and those usually come with other perks as well) or panels/talks at festivals and Iâm not mad about it. I think KISS started it, ComicCons popularized it, and many bands are now doing it as well[5]. It always amazes me when people criticize these sorts of events for being a money grab but I ask these people: do you work for free? Yeah, probably not. A tour is work. I guarantee you when you are at work dreaming of all of the other things you could be doing, bands are also doing that except they donât get to go home to their families after. I have many friends who love their jobs & even some who get amazing perks like travel and fine dining but even they wouldnât do it for free.
âYou are not allowed to yell at me about this unless you pay me. That is the new rule.â
What a delight it was to open BlueSky tonight and see this amazing exchange. I, myself, have used the line, âI donât take homework assignments from strangersâ whenever some Tech Bro wanted to have a Bad Faith argument on social media but I think this is way more effective.
Many more creators are putting their content either on Nebula, or in Patreon (and others) because of the penchant for trolls to do the most unhinged things from swatting to en masse reporting of videos, triggering demonetization. It hasnât solved 100% of the issue â Contrapoints had to repost a video to their Patreon after a mass effort took down her unlisted GamerGate video. Fill your boots, I guess. She got it back up AND she has your $5. Win/win in the end, I suppose.
Caveat emptor
I donât have a solution for âbadâ actors like PRM, however. Trying to police authenticity online is trying to get grampa to stop talking to scammers on his landline. Grifters aren’t playing by the same rules. But if we go into it thinking that every creator is like a boy band: a fictional creation of a clever PR person, it should be ok. The Sex Pistols were, in fact, a clever creation and we still consider them a cultural touchstoneâŚand who doesnât love the Spice Girls?
We donât get angry with journalists who write articles about things they donât care about and I donât think we need to make creators our entire personality, either. I mean sure, it is much easier to create something if you care about the topic but it isnât a requirement. I think we have also blurred the lines between artist and creator. Nothing on PRMâs channel could actually be considered art. But people inferred art and inferred community where there was none. I actually feel sorry for people who are just trying to get a foothold in art or in even creating informative channels because the future isnât looking very authentic. In a post-truth world, we should probably all assume that everything could just be an elaborate ruse.
Fundamentally, people are angry with PRM because theyâre angry with themselves for getting sucked in. I think â especially after the last week – itâs time for us to realize that the only winners in the game of parasocial relationships are tech companies. Everything feels like itâs circling the drain and I wish I had a solution for artists and creators to get their stuff out there without all of us hopping onto the hamster wheel of selling our personal information and pulling down on the endless scrolling slot machine.
So Usenet or Blogrolls, anyone?
[1]Not just art, there have been a lot of people made famous by social media and Tim Ferriss talks about almost being kidnapped when he was still low on the famous totem pole. He wrote 11 Reasons Not to Become Famous in response to his experiences.
[2]So some background here: Metal isnât a genre I know ANYTHING about. Itâs Mr. Tuckerâs thing and he enjoys different styles of the genre (why are there so many!?). I grew up with the Punk/Goth/Industrial kids and the Eldest was born in 2008 so I missed all of the fun metalmusic stuff that came out of that era. But I came across Shonalikaâs video on how Goth is White which led to Gender, Power and Heavy MetalâŚand now all Iâve been listening to is In This Moment and Motionless in White for a month now. Kinda a genre made for refugees of those scenes, tbqh. ÂŻ\_(ă)_/ÂŻ
[4]As I write this, Neil Gaiman is currently being exposed for being an absolute shitbag and quite frankly I am grateful to have never really resonated with his work as a teen. Gen X friends are positively beside themselves this week.
[5]I am not going to touch the state of the music industry here with its 360 contracts, nor will I address how promoters are offering VIP packages sans-band-meet.
(I honestly wish I remembered the HTML for footnotes but I don’t. I am having a hard enough time remembering that HTML writes “centre” the American way & it’s my #1 code mistake)
One of the things I have done this past December is cut down on the amount of Personal Finance blogs/Substacks, videos and podcasts that I consume. At the end of the day, most of the content out there is just splitting hairs for nerds or a rehashing of the same advice. I still enjoy it but honestly, I am well past the point where I GAF* about whether or not, for example, people should buy XEQT or VEQT and save cents on the dollar when we live in a world where most people struggle to even save $100. That isnât the bottleneck for most people, the basics are. This isnât shade to those creators â some people love those debates and love reading and writing about them. But I am done with the made-up hand-wringing of nothingburger questions.
Part of this is because weâve made it: weâve achieved our goals and quite frankly this content hasnât been enjoyable for a while, so I am going to just stop. It used to be that I enjoyed reading that content because it felt nice to read peopleâs individual struggles when I was going through my own. But the other part is that the core tenets of personal finance havenât changed in a really long time. Sure, the methodology and access to investments has changed but the basics of how to manage money has not really moved the needle since OG DJ Chuck D said, âAnnual income twenty pounds, annual expenditure nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty-pound ought and six, result misery.â
Another part of this is that I am just so sick and tired of the constant ads, amazon affiliate links, pop-ups and course offerings shilled by every website. Again, no shade to those creators at ALL: the bills must be paid and somewhere along the way we have collectively decided that user-hostile websites & affiliate links was the way we would pay for content. I actually prefer when creators write books because it feels satisfying to hold a book in my hot little hands (I have also bought books for my kindle, so that works, too). I think I just enjoy having all of the info in one place, offline. But itâs become off-putting when I hit a website where itâs pop-ups and ads skewing the window and there are so many affiliate links, calls to action and mediocre course offerings/coaching** that consists of someone just editing a mish mash of content you can find for free online and giving it a fancy new name, âItâs not a budget! We hates budgets, donât we Precious! Itâs Personal Accountability Tool!â
This is also just discussing people who I actually do give out good advice â established, intelligent folks who give advice that I may not agree with but is generally well thought out and competent. On the flip side, we have these TikTok Finluencers who have the most unhinged hot takes (enragement is engagement!) whose existence I generally try and ignore.
Finally, as I mentioned earlier: I am spending more time in the meat space. What happens when you achieve your goals? As it turns out, for me, the answer is to live a bigger life learning new things, doing more art, hanging out with more friends and trying new things. I no longer HAVE to sit in front of a computer for work so I donât have the need to take short breaks to read posts or to listen to podcasts while I work. I think I kept up with a lot of websites and podcasts because it was good to have a few things in my back pocket to keep my brain busy when I was stuck in place. Then I just didnât cull when I retired.
I eventually did start to scale back the content I was mainlining and worked on my social media use as well. Now, I have nothing but facebook now (marketplace and local communities keep me hooked and itâs just basically an address book now) which I only access by desktop.
I suspect I should write up what I believe are the core tenets of personal finance. So maybe that will be next. Or maybe my absolute frustration with Substack and the complete lack of viable business models for content. Or maybe authenticity vs. income.
Oh, and if you’ve read this far – Happy New Year!
*Give a fuck – shout out to my Oldhomies
**As an aside, I know a disproportionate amount of people who lost their jobs and became life coaches
Apologies for a really quiet fall. I Have been spending time in the meat space as part of the GREAT DISILLUSIONMENT I have been having with the online world.
Sorry that this is more of a list than a post, but you get what you pay for!
Bringing in the herbs
It has generally been a fairly busy autumn season as Thanksgiving & Halloween are generally chaotic times and then runs smack dab into Christmastide, which is just bonkers. Halloween is also our favourite holiday of the year so we tend to do a LOT at that time of the year.
I had a free night hotel reward I had to use so we headed to Kingston for the weekend to do Fort Fright at Fort Henry. It was only a day trip but it was good to get away and the kids love Fort Fright. Our friends invited us for Thanksgiving so we baked some pies before we left to bring with us on the Monday for dinner.
Our kids really lean into it by going to a local farm for their myriad haunted houses and other activities. We also do the obligatory pumpkin carving night. I love that our teens still are into dressing up in elaborate costumes and heading out to trick-or-treat. Gen-Z is truly amazing and I really like how they are more than happy to savour every moment of their childhoods. That meant we hosted 8 children for dinner before they headed out into the night. Mr. Tucker and I stayed back and handed out candy to the neighbourhood kids and it was a pretty great night.
â
My book-slash-travel-slash-trivia-slash-craft club went to Montreal for a weekend in November. We took the train which is still an absolute treat even for my adult self. We managed to grab a table together so we could chat and it was a relaxing fall ride through the countryside. We booked an Airbnb which was mostly accessible and right in the middle of where we wanted to be. We did all of the requisite Montreal things: lunch at Swartzâs, Bagels from a variety of amazing places, and a fun trip to Notre Dame cathedral for the sound and light show. But also we just chilled out, played games and chatted. It was a lovely weekend with friends.
Ok, we ate a LOT
Mr. Tucker took a 3-day knife-making course in November as well, in which he crafted a blade from a metal ingot, sewed a leather pouch for it, and carved a wood handle as well. It was an intense three days but he ended up with a fantastic Pukka knife that he made with his own hands.
We also did a knit Viking bracelet class at the Tool Library which was super interesting. It was my birthday gift to myself and we both came home with cool bracelets. Hopefully they will host another class in the new year because even though I was slow, I really enjoyed the process.
Mr. Tucker and I did most of our Christmas shopping in October and the beginning of November. This year, instead of buying Advent calendars we made them. They kids actually loved them and asked us to do that again next year. It was just things like lip balms, tea, face masks and stickers but it was fun. Right after Remembrance day, we finished all of the wrapping. Then all that was left was to nab the book-a-day Advent calendars from our local used book store and we were done for the year. I know that this seems INTENSE but December is a chaotic month between my birthday, Christmas parties, school concerts, the Winter Solstice party and Christmas that getting all of the gifts out of the way means I can lean in and enjoy the eventsâŚ
âŚand events there were! There were two PWHL games we got to end the year with, which was a teaser for January. I was sadly sick in bed on my birthday which was also the evening of The Eldestâs Christmas concert, so I was forced to miss it. We did manage to have cake, so YAY? I did manage to have my monthly dinner with friends from Dragon Boat and we went to the restaurant where my Stepson is chef, which was, as usual, amazing.
The parties were great: we have been having a friend Christmas get-together for around 20 years now and it has become more and more subdued over the years. In the beginning, we used to have these absolute ragers of food and drink where we were up until 6am still chatting. But weâve become more sleepy in our old age and the party starts and ends earlier. Iâm not made about it: itâs kind of lovely to have friends you can age with where you are all on the same page as the years go on. While we were out seeing friends, the kids were baking and decorating 4 dozen cupcakes for The Mission’s Cupcakes4Christmas event. They did an amazing job. I truly love having teenagers. They’re great!
We hosted a wonderfully quiet Winter Solstice party where we drank hot apple cider and made painted wood ornaments, strung dried citrus garlands and tossed our wishes into the fire with our hopes for 2025. It was low key and stress free, which is exactly how I like it. The kids invited friends so we got to share our 25-year-strong tradition with some new folks. It is one of my favourite nights of the year. A peaceful evening of fire, friends, food and introspection.
Naturally, that lead us right into Yuletide. Gone are the people-pleasing years of large dinners with the entire family descending on our home until Mr. Tucker and I were crushed by the weight of expectations, food, and alcohol. In the good way that the pandemic years turned everything on its head, we were happy to not have to host and so when restrictions let up, weâŚjust didnât host. The kids loved the new low-key Christmas where they didnât have to dress up and perform like Circus animals for relatives with huge expectations. Shocking to no one: no one invited us to their houses when we stopped hosting. So it was, indeed, a fantastic decision.
Now we have a lovely Christmas Eve with my Dad and his girlfriend and my cousin (and his new partner joined us this year, which was amazing!). We order Chinese food, catch up and have a few drinks. Christmas morning starts late, we unwrap gifts and chill out drinking coffee or tea before Mr. Tucker whips up some crĂŞpes for brunch and then we veg in our PJs and watch movies or shows. This year we watched the very last season of What We Do in the Shadows.
Finally, on Boxing Day my Stepson and his girlfriend come over and Mr. Tucker and my Stepson whipped up a feast before we have drinks and play Euchre. A perfect Christmastide, if I do say so myself.
So now we are smack dab into the Omen Days (intercalary days) or as I like to call them, âthe days where we are made of just chocolate and cheese.â It ends with Womenâs Little Christmas (or the Epiphany) (which I also wrote about last year). The plan is for the kids to have a NYE sleepover with their friends, a games night with our favourite folks, The Lytles and to generally putter around until school starts on January 6th.
Some last-minute wrapping on Yule Eve
Of course, so many other things have been happening including a bit of a personal renaissance (more about that soon) but it all comes down to this: I had planned to do a lot more in-person activities in 2024 and I DID IT. I had thought I was slacking on this goal but looking back even over the past quarter â I did a lot of stuff out in the Meat Space!
But I am getting ahead of myselfâŚgoals from 2024 and a wrap up is soon to come!
I only recently started following Rational Reminder and I found this video on renting vs. owning in Canada fascinating. One, because it is a Canadian model; and two, because I have always thought âowning is throwing your money awayâ was a silly comment. Housing is a need, being angry about renting is â to me â equivalent of being angry at your grocery bill because you eventually have to go to the bathroom.
That said, I also have discovered that a lot of people prefer owning because of the reasons laid out below: itâs more of a psychology problem than a money problem. While I have discussed this issue in other posts and donât regret my decision, a $15000-$22000 savings (on average) if you do EVERYTHING right as a renter just isnât worth it to me. I really enjoyed this deep dive and model and I have summed up some of the key points below.
Renting vs. owning in Canada: research & a model
– Houses are forced savings. People are better at paying a bill than they are about saving money. If you are going to rent, it is only a better deal if you are investing the money.
– Owning is riskier short-term but is inflation-hedged in the long term. Renting is the opposite: riskier long-term due to inflation.
– Ben Felixâs model (2005+) includes both current rents and rent controlled units (vacant vs. occupied) for myriad rental types (bachelor, 2-bed etc) and both the primary (purpose-built rentals) and secondary units (condos someone may choose to rent) and includes things such as down payment and insurance costs as well. He runs the model as if the difference is invested in the market and is not taxed (ie: in a TFSA). See the video for a more detailed explanation of how he invested the money and the fees for owners and below market vs. jumping to a market rent as well as where he got his pricing details from. It assumes you would save 90% of the difference between renting and owning. Land also typically increases but building decrease so he does include some maintenance in his calculation. But he basically concludes that:
o Renting beats owning in 7 of the 12 metropolitan areas where he ran his model
o The renting net worth beat owning by +$15000
o Edmonton had the least difference between +renting vs. -owning
o Kitchener-Waterloo had the highest difference between +owning vs.-renting
o Investment fees are important: 0.25% is used for this model but people were actually paying WAY more (probably around 2.5% on average). In 2022 it was 1.76% on average, largely driven by active mutual funds. If he bumps the fee up to that 1.76%, renting trails owning in 10 of the 12 areas. IMO: this is a super important finding mostly because Canadians didnât have access to discount brokerages for this entire period and were paying higher investment fees. We tend to forget but before the 2010s, self-directed investing was more difficult than it is today! Most people used banks or FAs that charged an AUM!
o On savings efficiency (how much of the difference you actually save to invest). If you save:
– 100% is where owning comes out ahead in 5/12 areas
– 90% is where owning comes out ahead in 7/12 areas
– 80% is where you are better off owning in 10 of the 12 areas
That is a HUGE difference!
o For the maintenance cost assumption:
– 2% it was better to own in 7 areas
– 3% it was better to rent in 3 areas
– 2.2% (the average) is 6 out of 12 favour owners
o They assumed amortization is 25 years but if you knock it back to 15, owning only beats renting in 3 areas and renter wealth exceeds owner wealth by $78000 on average. A 35 year amortization owning beats renting in 6 areas and owner wealth beats renter wealth by a little over $15000.
o With a 50% downpayment renters come out ahead in 9 out of 12 areas & renter wealth exceeds owner by $59000. With a 5% downpayment, renters still have a 7/12 advantage but the renter wealth advantage drops to $12000. Leverage works!
o This assumes you were also all-in on 100% equities, which may have been super difficult for people, especially through the 2008 financial crisis. âPeople panic sell stocks when they go down but rarely does anyone panic sell a home.â
o Disc: Maintenance/depreciation as a percentage of the housing value is contentious because the exact same structure may not cost more to maintain just because it is in a HCOLA area. BF then goes out to silo maintenance vs. depreciation and for this he looked at condo fees and discovered that in lower priced cities, condo fees were higher and in higher priced cities condo fees were lower (as a percentage of the property value). The result? Only one city â Victoria – switched sides from renting to owning being more of a benefit and it only increased renting to being advantageous by $22000 vs. $15000 in the model above.
Good points to consider
– People may be buying for their future selves, not their current needs.
– In an emergency, the last thing you will stop paying is your mortgage but the first thing to go is the savings.
– All things need to go right in order for the models to truly favour renting: discipline to save, low fees, not panic selling your portfolio and psychologically, this is very difficult.
– Renting is throwing your money away unless you are already prone to throwing your money away
The Commentariat
They did a video update based on the comments they received, and it is also well worth the watch:
– Here is the Globe and Mail article they reference
– You canât get evicted owning but if you have to move, the transaction costs are a lot
– Moving is disruptive (especially for kids)
– Maybe there arenât rentals in the place you want to live & itâs especially more difficult to find single-family homes
– âRenting isnât throwing money away, throwing money away is throwing money away, buying a home may help people to throw less money awayâ
– âPeople rent for the minimum they will accept but buy for the idealâ âŚor buy for the future
– People donât do the math on housing. The amount properties increase never are as crazy as they seem when you break it down
– Owning a home becomes more attractive when you have maxed out your other non-taxable accounts due to the no capital gains on your primary residence in Canada
– Landlords are taking a loss on ownership in some areas & holding out for capital appreciation (they didnât discuss that a lot of landlord expenses are tax deductible though as are losses when rent doesnât pay the bills)
– âWealthy people tend to be owners!â But renters also tend to be younger, make less money and spend more of their income on housing. Correlation â not causation
– Just because you could hypothetically have a higher net worth doesnât mean you should necessarily borrow against your house but for a lot more volatility and less peace of mind
– Renters need more wealth because they donât have the hedge against future housing consumption
– If you do find a great rent controlled place, renters can have less stress and more money
– Labour mobility: owning while young could commit you to one geographic location and it could stifle your career
âŚbut are owners happier than renters?
– Canada: no significant impact except for lower income households were more unhappy. Similar neighbourhoods = similar happiness
– Switzerland: no, maybe small negative relationship between owning and happiness
– Germany: yes, but much less than people think (especially for people who are extrinsically motivated)
– US: no. Owners are more unhappy because they spend less on other enjoyable activities
– Germany: mortgage debt negatively affects people, especially for people who have higher mortgages relative to income
There are some things that I have brought up before but I feel need special attention here as well:
You can go a very, very, very long time not doing any maintenance to a house except for emergency repairs and still have a liveable space & see a huge appreciation in your land value. Almost every neighbourhood I have every lived in has had one of those neighbours who keeps to themselves, does almost no home maintenance and the grounds are only sporadically maintained. The roof shingles are peeling, their cars are on blocks and they generally seem to be shut-ins. One day you see a for sale sign, a dumpster is placed in the driveway and it is sold for land value & torn down. Now, I am not recommending this by any means but most homes can go a very long time without preventative maintenance. You can live somewhere for a really long time without it falling down around you.
On the back of that, Iâd like to say: if you are poor, disabled or on a fixed income: buy! Smarter people would buy together. If you are going to have to rent a shared space anyway, then if you can qualify for a mortgage, do so. Single parents, disabled folks and poorer folks have less options when they are renovicted. So why not buy with friends? In my province it is two adults per sleeping room. I mean, I also lived in a 17-bedroom Goth commune in university so maybe I just have a higher tolerance for friction than many other people.
We have a pretty ok financial plan but if everything went to crapola, we would rent rooms out. The going rate in my neighbourhood for a room rental is $1000. Having a house would allow us to take in some renters to smooth over some rough patches in our retirement plans. Do I want to do this? No. But I would in a heartbeat over losing my home or not eating. Sure, itâs great for Mr. Tucker and I to have a shared office but if we needed to weâd pack it in and rent the room. Having a home gives us this option. Even if we end up selling this house when the kids move and buying, say, a smaller condo I would definitely stick with a two-bedroom so that we could take in a renter if need be. Heck, having co-op or exchange students would bring in income and give you summers off if you wanted as well. I canât rent a part of my portfolio (although, I may be able to use it for a loan).
To me, the peace of mind of having an accessible, paid off home that can house my family is worth the $15000-$22000 price tag of a LIFETIME of PERFECT investments. I know I wonât be a perfect investor, so forced savings works for me. I also like to put holes in my walls to hang up art and I adore my accessible bathtub. I have been tossed from way too many apartments in my 20s to really consider going back to renting unless I was under duress. Sure, our house appreciated by 55% in the 7 years since we bought it (which mimics a similar investment in the TSX) and because the house was maintained well by the previous owner weâve only done cosmetic things to it (except for the bathtub but I got tax credits for that). So overall I am happy with my choice.
(I have done my best to take notes/summarize as much as possible. Most errors are probably my own and not the creatorâs. Apologies if there are mistakes)