(A version of this article first appeared on Spirepoint)
When Spirepoint’s co-founder, Paul Blacquiere, asked me to write an inaugural article, it gave me an opportunity to talk to a new audience about a subject I am passionate about—helping the great majority of Canadians and Americans not covered by defined benefit pensions plans provide independently for themselves and their families.
Twenty years ago I had a plan that seemed likely to work. I had taken over a small real estate company, grown it from annual revenues of $350,000 to $120 million in nine years, bought an expansion team (the NHL’s Ottawa Senators) for $85 million and built a 20,000-seat arena (now called Canadian Tire Centre) for $240 million, which was sitting on a square mile of land (600 acres) that was going up in value, fast. But the Canadian dollar decided to go from 90 cents US to 62 cents, and NHL payrolls went from $6.5 million CAD when we purchased the team to $55 million USD (around $86 million CAD) a decade later. The team went bankrupt in 2003 and was sold to its current owner, Eugene Melnyk, for $120 million. Oh yeah, that included the arena and $13 million in playoff revenues sitting nicely in cash on the team’s balance sheet from a long playoff run that year.
This strategy is called buying high and selling low; it explains why I work as a real estate broker, keynote speaker, coach, mentor and author who will have to work til he dies. It also explains why I keep in my briefcase a note to self, which says, “IT’S REAL ESTATE, STUPID”. Three times. Every time I think about investing in professional sports, tech companies, sign companies, toy companies, low return CDs, GICs, RRSPs, TFSAs, t-bills, IPPs, mutual funds, life insurance, stocks, bonds, (all of which I have done and all of which turned out to be rubbish), my wife makes me read the note again, out loud.
I think wide and varied experience, successes and failures, have given me an opportunity to be an effective teacher/coach/mentor. At least, that is what people I coach tell me. Thank you for that.
In a recent Bank of Montreal poll, 34% of respondents said their retirement “plan” is to win the lottery. Some plan. Almost as good as my old plan.
I have a client (he’s 72) who came to see me recently and said, “Bruce, I’ve done everything right, everything my financial advisor told me to do. I own my own home. It’s worth $600,000. I’ve paid off the mortgage. I’ve saved for years so I’ve put $700,000 away in my RRSP. Now he tells me that when I turn it into a RIF (a retirement income fund, sort of a reverse RRSP) this year, my wife and I will have to live on $15,000 per annum because we both come from long-lived families (over 90 for men and women) and don’t want to outlive our money.” What to do?
Developed nations are basically divided into three classes today—people, mostly government workers, with defined benefit pension plans, which take all the risk out of their retirement (about 20% of the population fall into this category), the top 1% who in 2012 had a 19.3% share of US national income (up from just 7.7% in 1973) and everyone else (the remaining 80% of the population). The strategies I use help the “everyone else” group whether they are 25 or 75.
It is based on acquiring real estate assets in four categories—owning your own home, owning some residential rental property, owning some commercial property to diversify your portfolio, and owning some land. By the way, the 600 acres around the Canadian Tire Centre that I bought in the early 1990s for $7.5 million is now trading for $450,000 to $700,000 per acre, which translates into more than a quarter of a billion dollars. Unfortunately, it is now owned by someone other than my family and I since it went with the bankruptcy estate of the team. Oh well.
I did some research a few years ago and you know what I found? Out of the 100 richest families in Canada, 61 of them had all or substantially all of their wealth invested in real estate. What do the Holy Roman Catholic Church, Emperor of Nippon and the House of Windsor share in common other than they are long lived institutions? They all have the bulk of their wealth in real estate. (Their long institutional lives may also be partly explained by that correlation as well.)
Real estate is a business model for dummies, me included. Once you own a great building in a terrific location, no one else can (by definition) locate there. You’ve squeezed out your competition. If the city around you keeps growing, more people want your product and you didn’t have to do a thing. But it isn’t work-free. People often say they want to get involved because it’s “passive income”. That’s incorrect. Every business, including real estate, requires care, attention, passion, patience, vision, differentiation, effort. If you are prepared to do the work though, put together a good team and get a mentor, real estate is for you, all of you, brothers and sisters.
Bruce M Firestone, B Eng (Civil), M Eng-Sci, PhD, Century 21 Explorer Realty broker, Ottawa Senators founder @profbruce firstname.lastname@example.org www.brucemfirestone.com
For Quantum Entity | The Successors (book 3 in the trilogy) I had to invent a new type of spacecraft, called Electrodynamic Spinners. Here’s the scene when it first appears on earth. See below.
I realized months after I wrote about them that this type of spacecraft opens up the real possibility of interstellar travel not because they are FTL (faster than light) craft but because they allow their pilots to set time dilation (a proven relativity effect) to whatever they like. So a journey in RS (real space) that might last 100,000 years could pass in a few months for passengers and crew onboard one of these ships.
Anyway, here’s the scene involving Ellen Brooks of Mars and her earth-bound son, Finnegan, and his dad, Dr. Damien Bell:
What’s left of his crew begins to hear a sound they can’t quite place. It’s like a mosquito buzzing around your head when you are camping at night—you can’t see it but you know it’s there. It is not a pleasant sound.
They look up and around but still can’t place where it’s coming from. Then a shape begins to form—it’s about the size of a minibus except it’s spherical and turning like a child’s top, but at speeds that are far beyond human comprehension. It stops spinning and making that annoying insect sound, but the silvery colored thing looks like it is still experiencing hurricane-type weather on its surface. Then a small hatch opens. A woman’s arm and hand reaches out and drags Dr. Bell into the sphere.
The guys hear her say, “Hello Damien” and Dr. Bell responding softly, “Hello Ellen, how are you?”
These men are the first Terrans to see Electrodynamic Spinners in action—they can move through RS at close to lightspeed. They can rotate in place at near lightspeed as well, which means they can take people into the future. As far as they could possibly want to go.
The Martians have come.
“Where will you go, Finnegan? You and the Padre are welcome on Mars.”
“No thanks, Mom. Do you have any more of these… spaceships?”
Ellen has explained their function to Finnegan.
“I have an idea.”
“I have no wife. No babies. Naya is gone, maybe forever. Nell and Dad are gone. My brother has Nina. You have Farrar. I’ve done nothing, created nothing, left nothing behind. So I’m going to go somewhere else.”
“Where?” say Ellen and Jules at the same time except Jules says, “Der?”
“Into the future. I think that’s where Dad wanted me to go. It’s where I want to go. I am going to travel 100, 500, 1,000, whatever number of years into the future I have to, however long it takes, to tell people what we did in the Quantum Era to protect and preserve their freedom. They have to know, Mom. They have to know.” Finn is thinking he’ll find true love there and a purpose for his life, which has so far eluded him.
Ellen hands him something the size of a formal dinner plate.
“You press here,” she says pointing to its center. “But don’t do it in here. Outside.”
They go outside her spinner where she is immediately oppressed by Earth’s gravity.
Finn presses and his spinner unfolds itself and expands.
They go inside and she shows him how to set speeds for time dilation, translation in space as well as gravity settings. He selects one gravity, Earth normal.
“How far into the future do you want to travel, Finnegan?”
“I’ll visit 100 years into the future to start.”
“OK,” Ellen says and makes some rudimentary calculations using one of the onboard utilities.
In another few seconds, she says, “Alright, you need to set this for 99.9994250000% of c.” c is the speed of light. “It means you will spend just over 4 months inside your spinner but 100 years will have passed in real space.”
“I’ll end up here, right Mom? I mean the same place.”
“Yes,” Ellen replies uncertainly.
“I want to go 100 years into the future but I want to appear somewhere else. Can this craft do that too?”
“Sure. It’s just a bit more complicated.” Ellen shows him how to set the machine for translation through space in addition to time displacement.
It’s really much more complicated but Mars engineers have made it simple for pilots because their onboard computer already takes into account not only the ship’s position with respect to the solar system but to the Milky Way galaxy as well. They determine spatial coordinates down to the quantum scale because over the time period they are potentially looking at here, small variances (brought about in part because the Heisenberg uncertainty principle asserts that there is a fundamental limit to the precision with which position and momentum can be known simultaneously) could cause Finnegan to emerge deep inside Earth’s core or, say, outside lunar orbit. The latter wouldn’t be much of a problem but the former certainly would be.
“So where do you want to end up, Finn?”
“In Dallas, Mom.”
Ellen raises her eyebrows in surprise since Dallas has been one of the chief centers of Cartesian power having been resettled by nearly two million Han and Germanians.
“I figure I’ll start by reeducating them first, Mom,” Finn explains. He smiles at her.
Ellen thinks for a second, smiles back, then punches in new coordinates: Earth 32°46′43″N 96°48′30″W. Finn will appear 100 years from now at 411 Elm Street where the Dealey Plaza is located. It’s also the place where President Kennedy was shot.
She goes to a part of the hull and presses her palm there. A panel unfolds. It contains drawers of clothes that all look the same.
“You need to change into one of these, son.”
“What are they?”
Finn looks dubiously at a white stretchy, one piece skintight uniform with gray metallic thread woven into it in a spider-web pattern. Finn never saw Ellen’s arrival so he doesn’t know that she was wearing one of these when she came to Earth in her e-spinner. Damien thought she looked terrific in it. Since then, Ellen’s been wearing more normal Earth-girl attire.
“It’s a one-size-fits-all protective suit. You’ll look very handsome in it especially when you pull the cowl over your head, Finnegan. You’ll look like the Blue Men in concert,” Ellen laughs.
Finn has no idea who the Blue Men are but when he’s alone in his spinner for months at a time, he’ll look them up in his ship’s immense, nearly infinite media library. He’ll also find out that Mars engineers have equipped the ship with every kind of avatar imaginable (similar to what Pi and Zoe did) so pilots will never be lonely. But Finnegan isn’t interested in having virtual sex with beautiful avatars. All his life, he’s been looking for love in all the wrong places and doesn’t want a lonely Finnegan falling for a sexpot who is not real and never changes or evolves. He’ll give that part of his ship’s repertoire a miss.
He changes grumpily into his spacesuit asking, “What’s it do?”
“It protects your mind from electrodynamic forces that would alter your state of consciousness and reorder your chromosomes, Mr. Bell.”
“It is. But you can get out of them for an hour or two a day. Just not long periods without it, OK?”
“Right,” he says. “Um, Mom, any other surprises for me like I’ll grow goat horns and whiskers?” Finn is thinking of Hania and Kele’s goat herd, which helped keep them alive for years.
Ellen laughs again. “You’ll find plenty of surprises but all on the upside, son.” Then more seriously she adds, “You realize you can never come back, Finn. Never. You understand that? It is a one way trip.”
“I know that Mom. I’ll stay and help you bury him.”
“No, son. I’ll do that on my own. It’s better that way.”
To be honest, now that he has decided, he is eager (typical of most young people) to be off on his new adventure. Like Nina is experiencing right about now, freedom is a drug. It would pain both of them to admit it but freedom is an emotion you experience after a loved one dies, a parent passes or a relationship ends. It’s callously true.
He gives his mother an embrace, shakes hands with Jules and climbs into his new spacecraft. He powers up his spinner for his journey into an unknowable future.
The Bicycle Example
1. Your therapist talks to you about your relationship with your bicycle.
2. A consultant you hired reads the manual, gets on your bike and reports back to you about the experience.
3. Your coach puts you on the bike then runs along beside you until you can ride on your own.
With thanks to http://desiradda.org/for her assistance with this.
A visitable home has three overarching qualities—
1. it has a 0-step entryway (either at the side of the house or front);
2. wider doorways and corridors on the main floor;
3. a main floor bath or powder room.
Western-based developers have been quick to jump on board but the industry in eastern Canada not so much. They’re worried it’ll cost too much or there is too little demand or it will stigmatize their sub-divisions.
If they are worried about stigmatization, they should be far more concerned if and when ramps are built so elders can access their own homes. Ramps tend to be ugly, they require a lot of maintenance (painting/staining/repair) and they separate a home from the street in a way that is off-putting to say the least.
Providing 0-step entries via landscaping is not only beautiful and maintenance free, it appeals to younger folks too. I mentioned this as an alternative to a lovely young couple the other day (their grandmother will be living with them) and, first thing they said was, “Wow, that’ll be great for strollers too.”
Compare the above home with this one using a ramp—
Need I say more?
More images of how to achieve 0-step via landscape design:
Ottawa Planners Out of Touch with Rural Affairs
I was a supporter of amalgamating 11 Ottawa-area municipalities and townships plus a regional government into one organization back in the day when Ontario decided to forge new mega-municipalities across the province. It made sense many of us thought—get rid of overlapping bureaucracies and take advantage of efficiencies.
Municipal bureaucrat head count, we were told (sold), would decrease from 12,500 FTEs (full time equivalents) to 8,500 saving taxpayers $400 million per year and decisions would speed up. It didn’t work out that way—head count ballooned to 16,500 and a huge, remote bureaucracy made the City of Ottawa one of the least desirable places in North America to do development work in. New Englanders pity the development community here.
Maybe the worst outcome is that city hall-based planners seek to homogenize the community believing that every citizen should live in a highrise downtown condo above a pub. Ottawa once was home to diversity—you could live en francais in Vanier or Orleans or Cumberland, you could live a rural lifestyle in West Carleton or Rideau townships, you could live in an urban condition in Ottawa, you could live in debt-free Nepean or high tech Kanata or…
Don’t believe me? What did Ottawa planners do after amalgamation? They slapped a moratorium on rural lot development that looks likely to last at least until the Ottawa Senators win their next Stanley Cup (their last one was 1927). Urban planners (now that’s an oxymoron—the greatest settlements are ones that developed organically with the least amount of interference by bureaucrats) wouldn’t know how to find, say, Fitzroy Harbour, even if you gave them a compass and a map and a month to do it.
Today, I appeared in front of Ottawa’s Committee of Adjustment (COA) on behalf of elder clients of mine who need to sell their rural property so they can afford to move into town to be closer to health services. Their 70-acre property is too large for most buyers so they asked me to sell just their home and 10 acres, leaving the retained portion in their hands, perhaps to form part of their future estate.
To demonstrate how out of touch Ottawa urban planners are with rural affairs, one of the conditions they sought to impose on the severance was that my clients drill a new casement well on the vacant retained lands at a cost of anywhere from $3,500 to $5,000 to prove water supply despite the fact that there are at least 50 such wells within a few kilometers that all provide abundant supply. They also meet potability tests and ODWO (Ontario Drinking Water Objectives) standards.
This is a bad idea because—
1. there is no way for my clients to know where to put such a well on 60 acres;
2. if someone eventually builds on the retained lands, the likelihood that the well is in the right location is remote;
3. so the well will be capped, maybe for an eternity;
4. a capped well looks like a challenge to teenagers; they wrench the caps off and throw cherry bombs down the well/makes a cool geyser;
5. an uncapped well is a danger to tiny children (once they fall in, getting them out requires a superhuman effort—they either die or are horribly injured);
6. it is also a danger to animal and bird life as well as the underground aquifer, which can become polluted by whatever is dumped down there or falls in;
7. I worked with the MWDA (Metropolitan Waste Disposal Authority) in Sydney Australia when liquid waste disposal was mob-dominated—huge tankers would drain their waste cargoes into gullies, watercourses, the Pacific, anywhere but in controlled liquid waste depots to save big money on tipping fees; a well is a convenient place for illicit dumping, trust me about that;
8. eventually, someone will just have to go back in and concrete the thing shut forever.
I have done hundreds of rural wells and the only ones that work are the ones done at the time of development. The ones done in advance like this are inevitably useless. I know because I’ve concreted a few myself.
"In the environmental world we don’t like to leave wells just sitting there as they are easily forgotten about at some stage or another regardless of MOE well log requirements and they create unwanted, unneeded pathways into aquifers. In the context of contaminated sites, it is preferred that existing wells be abandoned according to regulations, when not in use."
-Tracy Dannell, CIMA project manager for the EIS (Environmental Impact Statement) done in support of severance application
Anyway, as we were presenting our side to the Committee of Adjustment, we were getting nods from its members, who are all volunteer citizens doing their duty (a 4-year commitment) on the land division committee. These people know rural development and know what a bad idea it is. Apparently, city planners do not know that.
The COA decided unanimously in favor of our clients’ position—whomsoever owns the retained lands will one day have to drill and prove a well before any building permit is issued, a sensible condition that the Committee imposed on the property.
It would be nice to go back a decade and reverse amalgamation but, failing that, how about the City of Ottawa hires one or two planners that know something about rural life where more than 100,000 of our citizens actually prefer to be.
Bruce M Firestone is a real state broker for Century 21 Explorer Realty Inc and a coach. Please contact him at 613.422.6757 x 250 or bruce.firestone @ century21.ca
First of all, don’t buy residential or commercial property in a thin marketplace unless you are doing it for a reason other than economic gain. A thin market is where property is abundant and buyers few. That would include almost all rural Ontario property or small towns, and most sun destinations in the Caribbean, for example.
Rodney Bay, St Lucia
Here’s what I recently said to a friend of mine who saddled himself with a “dream” property in St Lucia—
- As you already know this type of property is not easy to sell
- It’s not that it’s a bad property, it’s that the market for these places is thin
- Try selling a home in Prescott, only 45 minutes south of Ottawa for goodness sake, and you’ll know what I mean
- While you are trying to sell your property, add airbnb.com to your marketing mix/it’ll help you find more rentals for your property
- Another way to exit, is to sell it in parts, say, you find six Canadian families (or even companies who want to reward employees/suppliers/customers) who each buy 1/6th and then they get two months there each per year—1 month every winter and 1 month at other times of the year
- So they each put in $65,000 instead of one chump ponying up $390,000
- You might even keep a 1/6th interest yourself/so you have exited without exiting if you follow me
- Your occupancy rate will increase from less than 50% (which is what is keeping you from making this a profitable investment) to 100%
- Your workload will drop hugely too/trying to keep these places rented and maintaining them is a huge amount of work for not very much return (in fact, your returns are negative, which is bad)
- You already have the buyers lined up, you just don’t know that—everyone who has ever visited/stayed at your place is a potential buyer of a 1/6th interest.
Hope this helps,