As Didi says in the novel (Findependence Day), “There’s no point climbing the Tower of Wealth when you’re still mired in the basement of debt.” If you owe credit-card debt still charging an usurous 20% per annum, forget about building wealth: focus on eliminating that debt. And once done, focus on paying off your mortgage. As Theo says in the novel, “The foundation of financial independence is a paid-for house.”
Millennials, those born roughly between 1980 and the year 2000, face a different future than Baby Boomers did at their same age. In terms of Wealth Building and saving for Retirement their challenges are wage stagnation, unemployment, underemployment and a seeming sense of entitlement. Because they came of age during the Great Recession, their faith in brokerage firms, Wall Street and global banks has been bruised.
Being optimists, we believe the financial future of this generation can still be bright, but with loads of student debt and lack of investment understanding they need to get started learning about finances and money management now.
Time is on your side and is your greatest asset
One thing Millennials have today that Boomers don’t is great stretches of time before Retirement. It is their greatest resource and this fact needs to be made clear to them. Time cannot be replaced, and if you are a Millennial, then knowing about the power of compounding will change your financial life. $10,000 – the cost of a used car – invested today in the S&P 500 Index and based on market historical returns from 1950 to March 2023 could grow to US$1,000,000 or more throughout your career, thereby building a solid foundation for your retirement needs. This return is without adding another dollar to your investment.
S&P Market Return Chart
If you do nothing else for your retirement, scrape and scrap to make this investment into SPY (S&P 500 Index ETF) or VTI (Vanguard Total Stock Market ETF) and you will be handsomely rewarded, since you have this time on your side.
Just get Started
A new investor with limited funds can utilize an online, no-frills brokerage account and — depending on which brokerage you pick — you can open an account with less than $1,000. Not every house requires initial investments of more than $2,500, and as of this writing, Fidelity is offering a no minimum for opening an account. Continue Reading…
My latest MoneySense Retired Money column looks at a handful of FIRE bloggers who should be familiar to readers of this site, Findependence Hub: notably Mark Seed of myownadvisor and Bob Lai of Tawcan.
As you can see by clicking on the column headline, How are FIRE adherents making out?, Seed recently announced he has reached his Financial Independence in his early 50s. Bob Lai, meanwhile, is still working in his 40s but blogged on how he hopes to reach Findependence before 2030.
The MoneySense column also updates the status of veteran personal finance columnist Rob Carrick, who ended full-time employment at the Globe & Mail last year, the subject of an earlier Retired Money column. And we mention a good blog by The Retirement Manifesto’s Fritz Gilbert about the 12 Good Years between age 60 and 72. As I ironically close the column with, it seems I have just used up my own 12 good years!
The real focus of the MoneySense column is however Mark Seed, just as it was Carrick last summer. In both cases, we exchanged views in Zoom or GoogleMeets over the course of an hour or so.
By now, it’s hardly necessary to remind readers that the FIRE acronym stands for Financial Independence Retire Early, as the image above illustrates.
Note that our FIRE subjects in the column span four decades: Lai his 40s, Seed his 50s, Carrick his 60s and I am in my 70s, evidently still running this website and writing for MoneySense, a former employer.
The end of Salaried Employment does not mean no more Working
The observant reader will note that none of the bloggers mentioned here have actually begun the traditional “Full-Stop Retirement.” When FIRE proponents describe Early Retirement, they usually mean leaving the comfort of full-time salaried employment and all that it entails: commuting, bosses, endless meetings, tax deducted at source, annual performance reviews and so on. Continue Reading…
I can’t speak for others … but I’m sure there is a moment people imagine what their retirement day is and what that will feel like: a clean break, a celebratory toast, maybe even a sense of instant relaxation.
For me, while you could say stepping away from the workforce in my early 50s wasn’t a single moment – although April 23 was a special moment for me – it was actually the slow-progress and realization that I had crossed an invisible line into a completely new way of living.
And to be honest, even a few days after I handed in my laptop and badge, the feeling remains quite surreal about what just happened.
For most of my life, work shaped pretty much everything.
Work dictated my schedule (including requests for time-off and vacations), my priorities for the week, and even a big part of my own identity. These are not terrible things whatsoever but rather work involves trade-offs of my life energy, provided to an important cause, with financial compensation in return.
For more than 25 years while working at my former employer, a great one at that, conversations with others often began with:
“So, what do you do?”
“How is work?”
“What’s new with your job since we talked last time?”
And, I always had an answer.
For 25+ years.
Half of my life.
Now, that answer is … well ….less straightforward.
While I enjoyed my job, the people I supported, my new identity is no longer defined by a job title whether that was going to the office physically or virtually from home.
Working for others is now my (very recent) former-self.
And certainly taking a leap-of-faith as I have told others, in my early 50s, to join my wife in Early Retirement was hardly accidental.
Early retirement was born out of many, many years of deliberate choices in life:
Consistent savings.
Keeping our investing costs low.
Investing in equities (stocks that paid dividends, Exchange Traded Funds (ETFs) that paid distributions).
Getting out of debt.
And on and on …
What I am saying is there were both choices and important trade-offs made along the way. Early Retirement doesn’t happen overnight. It doesn’t happen in a year or so. It’s not something you just wake up and do.
While some folks around me took the flashy options, I often choose the less obvious road.
Maybe I missed out on things in doing so. Maybe I should have spent more money on things or experiences: although after already visiting many countries around the world to date I’m not quite convinced I’m that hard done by …
So, to be honest, instead of feeling like I really missed out over the years I see my lifestyle choices much differently this weekend: they bought me time.
And time, I believe, is the real currency of any retirement: My Own Advisor.
I just did a thing: I retired in my early 50s. So, now what?
My journey beforehand, including what I wrote about on this site, was mostly financial and not too personal.
I suspect moving forward it’s going to be a better balance.
Financially, it’s more about the shift from saving to spending.
The shift from saving to spending My last paycheque from a decades-long career at my current employer will be arriving in a few months for me – so there is a real need (soon) to shift from saving to spending. I’ve been thinking about some form of retirement for some time. There are many ways … Continue reading The shift from saving to spending
Life is uncertain. We are living our day-to-day lives with a certain level of uncertainty, but that’s part of the fun. Some people don’t like having too many uncertainties, so they take actions and precautions to reduce uncertainty.
The same thing can be said for early retirement and living off one’s investment portfolio. There are many steps you can take to increase the margin of safety of your investment portfolio to ensure it can sustain your lifestyle and you don’t run out of money.As we draw closer to achieving Financial Independence through dividend income, also known as living off dividends, we are spending more time on the steps needed to prepare ourselves for this significant financial and life milestone.
I thought it would be interesting to explore the steps we are taking in 2026 when it comes to our early retirement planning.
Building up our Cash Reserve
Along our Financial Independence journey, we have been extremely focused on building up our dividend portfolio. As a result, we have been working hard to grow our savings gap and invest the saved-up money to buy dividend stocks and index ETFs.
For the most part, we don’t keep a lot of cash in our chequing and savings accounts, because we see too much cash sitting around as opportunity cost.
But as we get closer to Financial Independence, it is important to start building up our cash reserve. Cash reserve is important because it provides flexibility and prevents us from having to sell off our investments during a sudden market crash because of some unexpected need.
Last year, we managed to save enough money so that we had over $25,000 in our Long Term Savings for Spending account. Unfortunately, at the time of writing, we are below that number because of the yearly RESP contributions and having to buy a new fridge. Since one of our financial goals is to have more than $35,000 in our cash reserve, this means we need to save up more to first bring the amount in our LTSS account to above $25,000 first, then try to save more to hit the $35,000 market.
But building up our cash reserve is more than just having cash sitting around in our bank account. It’s also about having cash available in our investment accounts, too, as I’ll explain in the next section.
Turning off DRIPs
We are currently investing 100% of our dividend income. We enroll in dividend reinvestment plans (DRIPs), so dividends are automatically used to get additional shares. Years ago, when fractional DRIPs weren’t available, we could only drip full shares (i.e. dividends received were more than the share price). We’d let the remaining dividends accumulate in our accounts until we had over $1,000 before we bought more dividend stocks or index ETFs (we did this so the trading commission was less than 1% of the overall transaction).
Nowadays, with the existence of fractional DRIPs from brokers like WealthSimple and TD, most of our dividends are reinvested right away. Before fractional DRIPs were enabled with TD, and because TD charges $9.99 per trade, we would move the remaining dividends collected in our taxable account with TD to WealthSimple to take advantage of the no-commission trading. We no longer have to do this.
Questrade still doesn’t support fractional DRIPs (and only fractional share purchase on certain securities), so we can only drip full shares and the remaining dividends get deposited in our accounts. Since Questrade no longer charges trading commissions, we don’t need to wait for dividends to accumulate to over $1,000 before reinvesting the money. Lately, we would use dividends to buy more stocks & ETFs when there’s a red day in the markets.
As we get closer to Financial Independence, we plan to change the way we utilize DRIPs. We want to drip selectively. We plan to turn off drip in our taxable accounts and RRSPs by the middle of this year (or by Q3). We will keep DRIP on in our TFSAs to allow investments/dividends to compound.
That’s step one in building up a cash wedge in our taxable accounts and RRSPs for the eventual withdrawals when we do live off dividends. But we certainly don’t want money sitting in cash and not doing anything for us.
So what’s our plan with the dividends received in taxable accounts and RRSPs?
This is where investing in safe Cash Alternatives comes in.
Investing in safe Cash Alternatives
For dividends received in taxable accounts and RRSPs, we want to put them to work. But we don’t want to reinvest them into dividend-paying stocks, then have to sell stocks when we start withdrawing. Nor do we want to be waiting for dividends to accumulate before withdrawing.
Turning off DRIPs will allow us to start accumulating cash. Ideally, we want to accumulate enough money to cover 100% of our expenses for the next year, so we don’t need to sell any stocks. This is one way to increase our margin of safety in early retirement. Another benefit to having sufficient cash for next year’s expenses is that it is easier to budget, since we would know how much money we would have at the beginning of the year.
With the money accumulating in our taxable account, RRSPs, and savings account, we need to look at alternative ways to grow the money so we are not losing purchasing power due to inflation.
Since distributions from these high-yield HISA ETFs are taxed as 100% interest income, they are not overly tax-efficient. Therefore, it makes sense to invest in these HISA ETFs inside of our RRSPs.
Note: I know that withdrawals from RRSPs are taxed as working income as well so there may not be too much of a difference, but income inside RRSPs is tax-deferred so we can let the interest grow until withdrawals. This is a lot better than taking the tax hit in the same year as when you receive the interest.
For dividends sitting in our taxable accounts, if we invest in “safer” investments like GICs, HISAs, HISAs ETFs, bond ETFs, or even money market, all the interest earned would be taxed as 100% interest income, and not very tax efficient. Unfortunately, there’s no other way around it. If we really want, I suppose we can invest the money in dividend-paying Canadian stocks, but that’d go against the idea of building up a cash reserve in our taxable accounts.
Therefore, it probably makes the most sense for us to just take the tax hit and invest dividends in our taxable accounts in one of the HISA ETFs or move the money and start building a GIC ladder if the rates are attractive. (Knowing the low interest rates environment we’re in, probably hard to find attractive rates for short term GICs).
What would we do with the cash sitting in our LTSS? Well, we may consider parking some of it in cash inside a flexible high-interest savings account for planned expenses. To make sure money is working hard for us, it probably makes sense to invest the money in a high-yield HISA ETF.
Our plans with money in taxable accounts and LTSS aren’t 100% decided. More tax calculation and planning is needed, considering I will be working full-time and earning income in 2026 and Mrs. T is generating income via her side hustles.
If any readers have other suggestions or recommendations on what to do with cash in our LTSS and taxable accounts, I would love to hear them.
Alternatively, we can consider turning DRIP off first in our RRSP and invest the money in one of the HISA ETFs. Then, in the latter half of 2026, turn off DRIP in our taxable accounts to minimize tax consequences. This approach, however, means we won’t have as big a cash reserve.
It’s complicated to plan everything and that’s part of the fun of planning for early retirement!
Planning extended healthcare coverage
We currently have extended healthcare benefits through my employer. The extended healthcare benefits allow us to get coverage on prescription drugs, out-of-country trip medical coverage, paramedical services like massage, acupuncture, counselling, physiotherapy visits, vision care, and dental care. Continue Reading…
I originally wrote this article about buying a house in Canada back in 2021: right as the price of housing was picking up. I’ve kept it updated over the last few years as it caught the attention of Rob Carrick over at the Globe and Mail, as well as a few other big names. Five years after writing the initial version of this article, the value proposition on buying a house in Canada has certainly changed!
2026 Editor’s Note: I still don’t own a home, and while I’m not 100% averse to the idea of owning one day, that day is definitely not in the near future
Image by satheeshsankaran from Pixabay
By the end of the summer I will no longer be a homeowner.
In many countries that statement would be a simple matter of personal finance. Selling an asset, paying off a loan (mortgage) and moving on to another living space.
But not in Canada.
No, in Canada selling our house means that my wife and I are making a massive change to our identities. A core shift in our very essence.
Many would say we are taking a careless step backward on the path to living a fulfilled “real adult” life.
Several friends and family will likely believe that we are crazy for tossing away “the best investment one can ever make.”
The absolute obsession with homeownership in Canada continues to astound me. The emotional connection between Canadians and their real estate has been well documented, but that doesn’t make it any more logical! Even though my wife and I have owned a home for years, this was much less because we subscribed to the traditional “own at all costs” mentality, and more due to the fact that rural Manitoba housing vs rent decisions are quite different than most places in Canada.
We’ll certainly miss some of the small luxuries (goodbye big garage) of our old home, but here’s some of the reasons why we believe selling our house will be a weight off of our shoulders.
1) Endless Fear of Hearing a Strange Noise
Is that the furnace taking its last breath?
Perhaps it’s the water treatment system deciding to spring a leak?
Is that rain I hear: is it possible our septic system is backing up?!
My dad loves fixing stuff. His day is not complete until he has improved the physical world around him.
I am not my dad.
My lack of handyman skills has now become a joke that I’m comfortable laughing at, but for years I was incredibly self-conscious about possessing nearly zero masculinity-affirming fix-it ability. You want someone to work hard doing menial chores such as cutting lawns, raking leaves, shovelling snow, or lifting heavy things from Point A to Point B: I got you covered.
Anything that requires technical skills or mechanical problem-solving ability … not so much.
Because my father’s handyman-dominant brain was not passed down to his oldest son, I lived in perpetual fear of things breaking when I owned a home. I never really got this “pride of ownership” thing. For me it was definitely more of a “fear of ownership.” I had so much of my net worth tied up in this one asset – which required constant maintenance – and I really had no idea what it was doing. “Learning by doing” constantly scared me as errors were quite costly.
Hiring any specialized help on something like an air conditioning unit always seemed to cost triple what was estimated, so that just exponentially added to my anxiety levels around maintenance.
Renting = not my problem!!!
2) Is Renting still a Better Financial Decision than Buying in 2026?
Back in 2021 I wrote that it was “quantifiably true” that renting was better than buying. In fact, I went on to say:
I know … that’s a big statement.
It’s probably worth an article all on its own.
It will probably lead to crazy comments (as all real estate articles in Canada do): Editor’s Note: It did!
iii) Here’s Ben Felix’s 5% rule in action. I personally believe that Ben is shooting a bit high on real estate estimates (today’s giant houses are not comparable to historical returns data he quotes), and a bit low on property taxes + maintenance costs. He also isn’t factoring in closing costs (which are a pretty big deal when you move the number of times the average Canadian does), nor the difference between renters insurance and home insurance.
I do like his methodology, but the 5% rule of thumb for non-recoverable costs is pretty badly slanted towards real estate due to the factors mentioned above. I could probably live with a 6% rule: (speaking as a soon-to-be former homeowner of ten years).
Editor’s Note: Ben has done a ton of work in the rent-vs-buy realm since 2021. I still think he’s underestimating maintenance costs, as inflation rates on tradespeople over the last 10 years are really high even relative to overall inflation. His most recent deep dive shows that renting still wins out the majority of the time (even during a massive boom for housing in Canada vs the Great Recession in stocks in 2008).
iv) I’ve talked to many real estate experts who claim “the 1%” rule of thumb is a great filter for a potential landlord looking to add a revenue-generating property to their real estate portfolio.” That means that if you can’t get at least 1% of your purchase price in monthly rent, then it’s not really worth considering the property.
The flip side of that is that if you’re renting for substantially less than 1% of the purchase price of a comparable home: then you’re getting a good deal. Bryce over at Millennial Revolution explains his rule of 150 which comes to similar conclusions.
Those are all great looks at accurately comparing financial costs vs benefits of purchasing a house to live in.
2026 Update: I continue to think these are great rules of thumb for comparing renting and buying. So let’s take a look at how these rules would guide us as we look at rent and buying across Canada in 2026.
Toronto Real Estate
The average price of a property sold in the GTA in March of 2026 was $1,017,796. Interestingly, that’s actually slightly less than when we looked at this in 2021 ($1,108,453) while the average rent is closer to $2,250 (up slightly from $2,100 in 2021). Before we crunch the numbers, it’s interesting to note that both purchase price and rent have went up at a rate less than general inflation since 2021!
Our 1% rule landlord of thumb says that a $1,050,000 house better get you $10,500 per month in rent: or it’s not a good buy.
Using John’s or Preet’s calculators we see that renting is WAY ahead given these parameters.
My modified Ben Felix 6% rule tells us that if we can rent for $5,250 or less: then it’s a pretty good deal to rent. If we stick to his original 5% rule, we need to rent for less than $4,375 to be a good deal.
Bryce’s preferred rule of 150 means that the $2,250 rental average, would dictate a mortgage payment of $1,500 as a good measuring stick for if they should buy.
Conclusion: By any measure … It’s still a better deal to rent in Toronto, even though the price of homes hasn’t gone anywhere in 4 years!
Buying a House in Calgary
Back in 2021, Calgary was still recovering from the oil shock. These days, we see that rents and property values have increased substantially.
The average rent in Calgary is roughly $1,700 (compared to $1,200 back in 2021) and the average cost of a property has gone from $510,000 to about $616,000.
Our 1% rule of thumb says that a $616,000 house better get you $6,160 per month in rent; or it’s not a good buy.
Using John’s or Preet’s calculators we see that renting is substantially ahead given these parameters.
My modified Ben Felix 6% rule tells us that if we can rent for $3,080 or less: then it’s a pretty good deal to rent. If we stick to his original 5% rule, we need to rent for less than $2,567 to be a good deal.
Bryce’s preferred rule of 150 means that the $1,700 rental average, would dictate a mortgage payment of $1,133 as a good measuring stick for if they should buy or not. A $1,133 mortgage would correlate to a purchase price of roughly $250,000.
Even with rental prices going up at a much faster rate than home prices, it’s still a good deal to rent in Calgary!
Home Prices in Halifax
Back in 2021 I decided to throw Halifax into the mix as a substantially different housing market than the big cities like Toronto and Calgary.
In 2026 the average rent in Halifax is about $1,900 per month (versus $1,600 back in 2021) and the average cost of property has risen from $465,000 to about $560,000. (Just a note, these are weighted averages taken from across all home types.)
Our 1% rule of thumb says that a $560,000 house better get you $5,600 per month in rent: or it’s not a good buy.
Using John’s or Preet’s calculators we see that renting is substantially ahead given these parameters.
My modified Ben Felix 6% rule tells us that if we can rent for $2,800 or less: then it’s a pretty good deal to rent. If we stick to his original 5% rule, we need to rent for less than $2,333 to be a good deal.
Bryce’s preferred rule of 150 means that the $1,900 rental average, would dictate a mortgage payment of $1,267 as a good measuring stick for if they should buy or not. A $1,267 mortgage would correlate to a purchase price of under $300,000.
Canada’s current price-to-rent levels are 574% higher than they were in 1970.
Since 1970, Canada’s price-to-rent level has risen at roughly 21x as quickly as the USA’s.
Canada’s current price-to-rent levels are substantially higher now than the USA’s was before their 2008/09 housing crash.
In 2026, I’d add to this:
Our current price-to-rent levels aren’t much changed in 2025, and are still WAY higher than in 1970 (we’re now at about 587% versus 1970).
Since 2021, the U.S. market has cooled slightly more than the Canadian market has, thus exacerbating that comparison point.
Rent dynamics are flipping as supply catches up. After rents jumped 6.3% in 2023 and 7.9% in 2024, vacancy rose from 1.5% (2023) to ~2.3% (2024). Rents have now declined in Canada for 18 consecutive months according to Rentals.ca. Result: asking-rent growth is easing, especially in older stock.
Population policy is easing some demand pressure. Ottawa lowered permanent-resident targets and, for the first time, set caps on temporary residents (aiming to reduce the temp-resident share toward 5% of the population). CMHC explicitly baked in “weakening migration” into its 2025 call for higher rental vacancies.
Clearly, while the numbers have changed slightly, there aren’t really any new conclusions to draw from the rent vs buy math alone.
3) Opportunity Cost of being Rooted into Place
I grew up in a single house: owned by a homeowner. (My parents were unique in that my dad built his own house on a very cheap piece of rural land and never took out a mortgage. Feel free to try and copy that strategy in 2021.)
It was really nice. I get that there can be some very pleasant reasons to own the house/condo that you live in.
But let’s be honest about the big picture here: there are some large trade-offs involved.
Buying a home makes you much less likely to move in order to accept a promotion or career opportunity. That’s impossible to quantify, but it’s a really significant consideration.
One of the quickest ways to climb in any industry (or even make an advantageous jump to a new industry) is to be willing to move to where the opportunity is. The cost to your career of feeling as if you are anchored to the house you worked so hard to get into could be massive!
4) Our Brains Work Differently when we think about Renting a Place to Live vs “Buying a Forever Home” – Lifestyle Inflation is Almost Inevitable.
Funny things begin to happen as we approach the leap from renter to homeowner. Suddenly, cost-benefit calculations we were doing about third bedrooms or fancy kitchens fly out the window … only the best will do for our “forever home” after all.
Weird mantras like, “We’ll grow into it,” begin to creep into our heads and suddenly we’re looking at fancy countertops, upgrading bathrooms, etc.
I’m not sure whether to blame HGTV and the homeshopping shows or what it is, but there is no doubt that most of us look at properties completely differently whether we are renting or buying. Keeping up with the Joneses becomes so much more important (is this what “being a real adult” is truly all about?) when you’re buying and furnishing a house.
One thing that we have learned from moving overseas is that we can be 98% as satisfied in a two-bedroom apartment as we were in our large bungalow. Now, I hear you that things might be different if you have a young family. I’m sure this equation changes substantially when adding children to the picture, but when you look at the smaller average house size that the larger families of yesteryear were raised in, it raises some interesting questions about how much room we all need to be happy.
5) “Drive until you Qualify” = Too Much Driving
I have consistently found that we underestimate the cost of driving: in both lifestyle and dollars!
There have been many studies done on how spending time in the car can really impact your physical health in a myriad of ways. It doesn’t take a genius to figure out that the more time you spend sitting by yourself (often stuck in frustrating traffic) the less healthy and happy you are likely to be.
Maybe this work-from-home thing is going to reduce these financial and physical costs … but I have my doubts as to how many people this will actually affect a few months from now.
When calculating how much your commute will cost you, one needs to factor in depreciation and repairs, in addition to the price of gasoline (or perhaps electricity) and possibly parking. The government of Canada believes it costs about $0.73 per km to drive, while CAA posts similar estimates (and that’s prices from before the recent surge in Canadian gas prices).
At 260 work days per calendar year, every km you move further from your workplace will cost you about $380 per year! If you have two working adults that are both commuting in your household, it doesn’t take long for those numbers to really add up.
6) My House is Definitely NOT the Best Investment I’ve ever Made
If the real estate boosters didn’t try to burn down this website after reading the rent vs own comparison earlier in this article, they will surely reconsider after reading this.
If I’ve heard it once, I’ve heard it two hundred times: “My house is the best investment I’ve ever made.”
While I have written extensively on this topic (and had to explain the point to many parents in the course of teaching personal finance over the years) there is simply no debating the following considerations about owning your home from an investment perspective. Note: We’re not talking about owning a rental property here: that’s a much different conversation.
There are many reasons why the Holy Grail of investment advice is Thou Shalt Diversify. Tying up all of your cash (and then borrowing huge amounts of money that tie up all future earnings) is NOT diversification. Having your entire net worth determined by one building in one location is not a smart risk management decision.
Why is it that when people borrow money to invest in the stock market (known as leverage) it’s considered inherently risky, but when people borrow 9x their downpayment on a house it’s considered “common sense”?
When we think about how much money we’ve “made” on our home, we often forget to include all of the non-recoverable costs involved such as taxes, maintenance and repair costs, transaction fees to buy & sell, renovations that cost way more than they added resale value, etc.
The Case-Shiller Housing Index has stated that between 1928 and 2013, the average annualized rate of return for American housing was 3.7%. The average annual rate of return for American stocks was 9.5% during that time period. Canadian housing and stocks track much the same path.
The National Association of Home Builders in the USA has stated that the average home in 1950 was 983 square feet, and by 2015 it had nearly tripled in size to 2,740 square feet! When you adjust for this fact, the actual increase in value per-square-foot of house is much smaller than the 3-4% number that is commonly tossed around in both Canada and the USA. Likely more in the 1.5-2% territory.
If you think that the last few decades have been the “golden age of Canadian real estate” then you might be surprised to find out that since 1982, Canada’s house prices have only gone up an average of 1.7% per year (vs an average inflation rate of 2.46%).
House values do NOT always go up : no matter what your friend in Toronto says. Go back and ask a Floridian in 2008 or a Calgarian in 2014.
Remember, these considerations are looking backwards at record return decades for Canadian real estate. We are now likely close to the top of that mountain (if not at the peak), so going forward …
Alternative investments to Canadian real estate: View our guide about Canada’s best dividend stocks if you want to learn more about beginner-friendly ways of investing your money into safe non-real-estate assets.
7) Freedom to Travel … Forever
Ok, so this one is likely somewhat unique to us.
I get that not everyone wants to spend years travelling without a fixed address.
That said, I think most Canadians would be amazed at how cheap it is to travel months on end if they don’t have to pay a mortgage back home, and don’t have to fly during the peak weeks of the year. I know that my wife and I were astounded when we went down the digital rabbit hole and found out just how many people were “slow travelling” 12-months per year for under $25,000 CAD.
I don’t think we’re quite as frugal as many of these veteran travellers, but after some pretty extensive research and many conversations with people actually living the “digital nomad” or “FIRE” lifestyle, we think we could pretty easily mix 6 months in relatively expensive countries like Canada, the USA, Western Europe, etc, with 6 months in cheaper countries centred on Eastern Europe and SE Asia, for $40,000 CAD.
2025 Update: My wife and I actually did this last year. We spent 3 months at our family cabin in rural Ontario, then went to Portugal for three months, Thailand for two months, Bali for a month and Japan for a month.
All-in, the price tag came in around $45,000. That includes many flights, an excellent cheap ticket on a Japanese cruise sale, several 3-to-5-day stays at luxury resorts, and several months in good-to-great Airbnbs. Financially, it was a success. It was a bit lonelier than we anticipated at times: but that’s not the math’s fault!
Beyond the obvious fun of seeing more of the world, we love the idea that we will get to spend more time with friends and family that don’t live close to where our 9-to-5 jobs were in rural Manitoba.
AirBnb and competing rental platforms have really changed the game when it comes to attempting to live this “no fixed address” lifestyle. With monthly discounts and competition keeping prices low, finding a place to live for 1-3 months has never been so convenient or affordable. If you want to be responsible for someone’s pets, there are even more affordable travel opportunities available!
Canadian Housing Prices in 2026 (How Expensive is Canada Really?)
After we wrote about gas prices in Canada a couple of weeks ago, I thought it might be useful to take a look at housing affordability in Canada for 2026.
If you’re wondering just how expensive housing has gotten in Canada over time, you can take a look at the inflation-adjusted Canadian house prices charts below. The first one I put together to show just how much faster Canadian housing has went up relative to the average overall inflation (and don’t forget that housing is actually a pretty big part of the overall CPI basket as well, so that means that the gap between housing and “everything else” is actually larger than what you can see here.
Then, I wanted folks to be able to see in real dollar terms just how expensive housing has gotten in Canada and why some folks call it a housing affordability crisis.
It’s pretty clear to see that the cost of living in the Canadian housing category has went up significantly in the last 20 years.
It’s also interesting to note that while Canadian real estate gurus like to say, “Oh the market is just taking a bit of a breather until it goes up again: it has hardly gone down at all.”
… That’s not exactly true in real-life.
Because inflation has been somewhat high the last few years, we see that in inflation-adjusted terms, Canadian housing has actually lost a substantial amount of value. When you compare that to the massive stock market returns of the last five years, I’d say my 2021 housing sentiment holds up pretty well!
The good news is that housing affordability in Canada has improved slightly in the last few years. The bad news is that the overall cost of living for the housing category is still way higher than it was even 20 years ago.
Canada Cost of Living: Housing Costs
I still think a lot of Canadians underestimate where their total housing costs come from. I have yet to meet a homeowner of more than a few years (who didn’t buy new) who thinks they only spend 1% in maintenance. I also think that we look at our mortgage payment and we don’t totally mentally calculate how much of that is interest.
Let’s take a quick look at a plausible home ownership case. Helen the Homeowner decides that she’s ready to take the plunge and buys a $700k house in a small Ontario city.
She has diligently saved up the 70K that she needs (making good use of her FHSA and RRSP). With 10% Helen is going to need a mortgage for nearly $650k because as a high-ratio insured mortgage, she is going to owe some extra. Here’s a rough idea of what her total housing cost of living will be over the next 25 years if she averages a 4.3% mortgage interest rate (pretty generous by historical standards). I’m keeping everything in 2026 dollars here for ease of comparison.
Down payment: $70,000
Home principal repaid: $630,000
Mortgage interest: $407,403
CMHC insurance premium: $19,530
Ontario tax on CMHC premium: $1,562
Property tax: $131,250
Home insurance: $37,500
Maintenance: $262,500
Ontario land transfer tax: $10,475
Total 25-year out-of-pocket cost: about $1,570,220
So for the first 25 years of home ownership, that works out to the following breakdown:
Home principal repaid: 40.1%
Mortgage interest: 26.0%
Maintenance: 16.7%
Property tax: 8.4%
Down payment: 4.5%
Home insurance: 2.4%
CMHC premium: 1.2%
Land transfer tax: 0.7%
Tax on CMHC premium: 0.1%
It’s interesting to note that the actual price of the home is significantly less than half of the total housing cost of living.
It’s OK to Own a Home – and It’s OK NOT to Own one Too!
It’s odd to say, but that makes it no less true: Owning your home in Canada is an emotional decision heavily tied to middle-class identity.
Because the decision is so important, no one likes to think that they chose the “wrong” path. Consequently, there are very few rational conversations to be had when it comes to home ownership. Like most issues that cut to the core of our identity, we usually choose our side, and then selectively look for arguments or data to support the decision we made.
I’ve been on both sides of the home ownership debate and the only thing that I can decisively say is that for some people owning a home makes sense: but for many others it simply does not.
Hey, if you are 80%+ sure that you’re going to be rooted in the same area for 10+ years, and you derive a lot of enjoyment out of handyperson fixes/renos, then the benefits of home ownership might make it the perfect choice for you.
That said, judging by all the “buy at all costs” talk I continue to hear from coast-to-coast, I think we really need to examine the bigger picture when it comes to home ownership.
2026 Update: Very little has changed since 2021 that has led me to change my thinking on rent vs buy. You can see in the comments below that it hit a major pain point for a lot of folks (as I predicted it would). While rent and housing prices remain fairly stagnant in most markets since 2021 (and have actually decreased relative to general inflation).
At the end of 2020, the S&P 500 was at USD$3,756 and the TSX 60 was at CAD$1,034. As of writing this update they are at $7,126 and $1,996 respectively. Good for a stock market gain of 90% and 93% respectively. Once you factor in that the S&P 500 would have spun off a dividend of a little less than 2%, and the TSX 60 would have rewarded you with 3%, the case for stocks gets even stronger.
Now, who knows, the next five years could look much different, but I’m going to take a victory lap on this controversial article for the time being!
Kyle Prevost is a financial educator, author and speaker. When he’s not on a basketball court or in a boxing ring trying to recapture his youth, you can find him helping Canadians with their finances over at MillionDollarJourney.com, and the Canadian Financial Summit.The newly updated version of this blog appeared on MillionDollarJourney on April 24, 2026. It has been slightly edited and is republished on Findependence Hub with permission.
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