I often say to people that for the most part, buying is cheaper than renting. Of course there ARE exceptions - pricy, 'hot' cities like Vancouver or New York make buying almost for the super-rich. Generally speaking, however, buying is more affordable - and hopefully it helps you build equity in the meantime. If buying wasn't a better option, do you think so many people would be landlords?
This article appeared in yesterday's Toronto Star - it is an interview with Rick Mercer about money, and he talks about when he was 19 he bought because it was cheaper than rent! Of course, like many people, he had "a hand up" from his parents (help with the downpayment). Very cool to see that even celebrities needed help at one point.
By Emily Mathieu | Sat Nov 26 2011
The Toronto Star
Comedian and commentator Rick Mercer’s distinct take on Canadian politics and social issues can be caught on the Rick Mercer Reportevery Tuesday at 8 p.m. on CBC. In our series on the financial habits of notable Canadians Mercer told the Toronto Star’s Emily Mathieu about his $19,500 row house, why trying to make a living in show business is a gamble and why entertainers, thanks to the nature of their industry, tend not to retire.
How did your childhood influence your attitude toward money?
My parents were pathological about living within their means and there simply wasn’t a lot of money. So as a family there were no trips to Florida but lots of camping trips, the driveway wasn’t paved (still isn’t) but there was money for music lessons, the house is small and had one bathroom for a family of six but it was paid for.
For people who had relatively little money my parents didn’t actually stress about money because they avoided debt. They certainly made a lot of sacrifices. As kids we knew that they would help out with post secondary education, for example, but the entire time I was growing up I doubt my father ever paid more than a thousand dollars for a truck, and he would paint them with a brush. I can’t actually think of anything that my father needed that he bought new.
Even now if I mention to Dad that I went to Canadian Tire and bought a lawn mower I know what he is thinking “Hmm, bought a new lawn mower, fool and his money”.
What was the best financial advice they passed on?
My father said never loan money to friends or at least never loan money and expect it back. If you are in a position to help a friend that’s great and you are in fact obligated to, but don’t expect it back. He was adamant that allowing a friendship to be damaged because of bad feelings around money is inexcusable.
What was your first big purchase?
My first house. I was 19 years old, I paid $19,500 for a very skinny row house, attached on both sides, attached to 20 other houses and a Chinese take out. The house was essentially condemned; it came with a huge binder of work orders from the city of St. John’s.
I was the cliché of a starving actor and actually couldn’t afford to live in an apartment. Owning the house allowed me to live on my own and concentrate on working in comedy. My cousin and a few friends rented rooms for $75 bucks a month. I financed it with $4,000 down which was money that my parents had planned to give me for university. I had payments of $300 dollars a month on a $15,000 dollar bank loan. The down payment from my parents was a hand up that changed my life.
How do you prefer to pay, cash, card or debit?
I have no preference. But I’m careful to pay off my cards monthly. Which I understand is a luxury.
Do you bank online?
Very little.
What has been your savviest investment?
Canadian Banks. Boring old Canadian Banks back in the early 90s.
Have you learned any financial lessons the hard way?
Yes I have and the tip I would give for anyone who is playing around in the market is to avoid people with hot tips.
What advice would you give to people about to enter the entertainment industry?
It depends on what area. There are lots of very good stable jobs in the entertainment industry. It’s an exciting industry. That said if a young person says they want to be a professional actor or musician I generally say don’t. A person doesn’t become an actor, a musician or a dancer because other people encouraged them, they do it because they have to, it is in their blood and they can’t imagine doing anything else.
If you can imagine doing something else you should probably concentrate on that. Being an artist or a performer is a very difficult life, there is no job security. In show business you can’t make a living but you can make a killing, it is a big gamble.
Was there a moment in your career where you felt you had achieved financial security?
Yes and no I don’t care to elaborate.
Do you worry about retirement?
I don’t worry about retirement but I do worry about not working. One of the great things about being an actor or a writer is you never have to stop working. I look forward to playing a crotchety old man.
But all actors worry about not working. When I bump into Gordon Pinsent he will talk about work, where the next job is, etc. He’s worked more than almost any actor alive, he could have retired comfortably decades ago but he is an actor and that’s what actors do, they worry about their next job.
Can money buy happiness?
It certainly doesn’t hurt. Anyone who says otherwise is lying. Money can mean not having to worry about paying the bills and there is no doubt about it for the vast majority of people that is the number one cause of stress in their life. But it all comes back to living within your means.
I’m sure there are people with massive salaries and five million dollar cottages in Muskoka they visit for two weeks a year stressing about bills at the end of the month. So one thing we do know is money can’t buy smarts.
Are money and success the same thing?
Absolutely not.
