How am I doing?

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Peculiar_Investor
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Re: How am I doing?

Post by Peculiar_Investor »

Well done :thumbsup: :thumbsup: and keep it up. From personal experience, liberating ourselves from mortgage debt was one of the most important financial and life decisions we've ever made. Without the burden of that debt, many other choices became possible and not working because we had to, but because we wanted to reduced job stress significantly.
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kombat
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Re: How am I doing?

Post by kombat »

Well lo and behold, we actually got some money back from the class action lawsuit against the organizers of the charitable donation tax refund scheme. We received 2 cheques for $752 each (one for my wife, one for me). I guess it's better than nothing. Let's see if they bounce or if they clear. :)
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Re: How am I doing?

Post by My Own Advisor »

I hate mortgage debt. It's the biggest ball-and-chain of my life. :)
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Re: How am I doing?

Post by parvus »

kombat wrote:Well lo and behold, we actually got some money back from the class action lawsuit against the organizers of the charitable donation tax refund scheme. We received 2 cheques for $752 each (one for my wife, one for me). I guess it's better than nothing. Let's see if they bounce or if they clear. :)
:thumbsup:
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kombat
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Re: How am I doing?

Post by kombat »

Another update. I got a letter from CRA saying they'd reached a settlement agreement giving me two options. Option 1, I could continue the lawsuit and take my chances that we'd win and my entire claim would be allowed (the $11,000 we actually donated, as well as the $40,000 "in kind") donation. Option 2, they would allow my actual $11,000 donation but disallow the $40,000 "in kind" donation, and they'd reassess my return and adjust it accordingly, refunding the interest and penalties I paid.

Of course, I took option 2.

This week I got a cheque from CRA for $6,800. So it's nice to actually get something back out of this whole messy ordeal. I honestly hadn't expected to ever get anything back.
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Re: How am I doing?

Post by Pickles »

So, with the $752 you got back from suing the operators of the scheme combined with full recognition of all your eligible charitable donations, you and your wife are ahead, Kombat! :lol:
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Re: How am I doing?

Post by mlepage »

That is a good, fair outcome. The instant I read the first page of the thread, about the charitable contribution, I was "OMG tax evasion." Our goal is to minimize our taxes, not evade them.

Sad now, because it reminds me I have to go over my taxes. :-(
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Re: How am I doing?

Post by rokman »

kombat,

It was like reading a horror story with a happy ending where the bad guys died (or vanished from the protagonists lives) and you and your wife lived happily ever after. Honestly, I am a little emotional about it.

I'm a newcomer to this forum and am at the age YOU were when you had that knock on the door re: land banking sales pitch. To me, the last hour of reading this whole thread was like reading a book. It was a real page turner and I couldn't wait to hear back from you amongst the pages. You're somewhat of a hero here. You certainly act(ed) like one.

Merry Christmas to you and your wife.

ps - when is the book coming out?
pps - honestly. Print this thread, take it to an editor and sell it. Call it "How to Kombat your way to Financial Freedom"
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Re: How am I doing?

Post by kombat »

Thanks for the words of encouragement, guys. I suppose a more general update on our finances would be appropriate, since that was the original intent of this thread, many years ago.

I'm now 39, my wife is 38. We've eliminated all debt except our mortgage, which is now down to $214,000, on a house worth around $500k (2600 sq. ft. 4br 2.5b in suburban Ottawa on a corner lot). This was an expensive year, as we bought a new (used) car (2010 Mazda 3, $14,500) and paid cash, as well as needing to replace our furnace and air conditioner ($8,500, again cash). We traveled a lot, heading out west twice, out east once, Vegas in the summer, and New York for a weekend in the fall. But even with all of that, we've remained debt-free (except for the mortgage).

We haven't added anything new to our RRSP's in a few years now; we've been throwing any extra cash at the mortgage instead. We add a trivial $100/month to our TFSAs. Our net worth currently sits around $620,000, with the following rough breakdown:

ASSETS
$215,000 RRSPs
$18,000 TFSAs
$21,000 cash
$80,000 property in Edmonton (the land banking deal)
$500,000 house

LIABILITIES
$214,000 mortgage

I'm really anxious to get out of this stupid land banking deal (it's been over 9 years), and if I ever get that money back, it is of course going straight onto the mortgage. That, combined with the extra payments we throw at it ($2-3k/month) should hopefully pay off the mortgage in the next 2-3 years, at which point we can start putting all that money ($4-5k/month) into our TFSAs and RRSPs and really start ramping them up.
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Re: How am I doing?

Post by kcowan »

I bought $100 of Ossington Explorations from a boiler room phone call when I was in my 20s. It was probably the best investment I ever made as a lesson in not trusting anyone else with my money. As a result, I avoided MURBs but joint-ventured one with a developer and sold it to a couple of dentists for $150k profit. Many of my confreres bought MURBs and paid dearly for that mistake.

But generally I stayed away from things I did not understand. That probably saved me a bunch. The fact that you shared your experience indicates how solid you are. :thumbsup:
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Re: How am I doing?

Post by SQRT »

Kombat: I think you are doing great. The land bank thing is behind you with a very useful lesson. I'm like Kcowan. I don't trust anyone with my money, never have. Never bought anything from anyone. Only own div paying shares directly. Not as diversified as I would like but has worked out great for me.

I have no doubt you will meet your financial goals. Congrats.
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Re: How am I doing?

Post by Just a Guy »

I was reading that letter you got about the developers selling the land...

My reading of it is a little different than yours kombat.

The way you read it, you think the developer will pay you back then, once they sell, they will pay you from the profits.

I think you read that wrong. My reading of it is,Mathew will mortgage the property and pay some people (it's a little unclear if they are buying it back, or if they will give you what you paid for it even) for their shares. Then, when they sell it, they will pay the unit holders. Since you sold your units, you won't get anything from the sale should it occur.

By the way, I was talking to my guys out there. Raw land near leduc is not going for anywhere near $40000/acre, probably closer to $10-15k if it's in a good location. You may be getting a low offer as the banks probably won't mortgage it for that much, plus they won't give 100% financing either, so the developers won't be able to pay you back your original investment most likely. Sorry for the bad news, once again I hope I'm wrong.
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Re: How am I doing?

Post by Landmiss »

Hello, I don't know if you're still around, but the Royal Links raw land is up for sale at $150 thou per acre. I know it's been almost a year since you last posted, but how could it go from $40,000 to $150 in a year. Thanks.
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Re: How am I doing?

Post by kombat »

Oh, I'm still here. Jaded and cynical, but still here. ;)
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Re: How am I doing?

Post by kombat »

Our mortgage was up for renewal next July, but I had a feeling rates had already hit bottom and would be creeping up by then, so in November, I started the ball rolling for an early renewal. We just finalized it last week, and got a new 5 year fixed at 2.64%. We paid around $2,000 in penalty, plus another $1,000 in lawyer fees and other miscellaneous fees, but we used the opportunity to take out $64,000 to max out our TFSAs. The day we signed the papers (last Thursday) was the same day two banks announced fixed-rate mortgages were going up. :)

So our mortgage is now back up to $270,000, but we have $265,000 in our RRSPs and $83,000 in TFSAs. We're on a 10-year plan to pay off our mortgage, although for at least the first 5, I'm not in too big of a hurry, as 2.64% is a great rate, IMHO. If rates are significantly higher in 5 years at renewal time, we can always just take the money back out of the TFSA and pay it back down.

No word on the land banking "investment." Honestly, I'm inclined to just drop it from our Net Worth statement completely, consider it lost, and forget about it.
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Re: How am I doing?

Post by kcowan »

kombat wrote:No word on the land banking "investment." Honestly, I'm inclined to just drop it from our Net Worth statement completely, consider it lost, and forget about it.
I would keep it in your portfolio but not add it to the total as a reminder.
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Re: How am I doing?

Post by FI40 »

I just read through everything, what a journey.

kombat best of luck with the land banking deal, I hope you get something out of it.

I cringe a little still at the result of the charity tax scam though. The CRA likely spent a lot of money dealing with this garbage. They are funded by all of us. It's unfortunate.
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Re: How am I doing?

Post by core »

Wow. I just read this thread front-to-back, it's 3:45am, I'm going to be wrecked for work tomorrow, but golly was that a good read. Live action investment advice played out over a decade.

Kombat, have you made this a book yet? Seriously, let's make it a book (or a story with all names changed). At the very least, we should be able to write a university case out of it. For me, the best part of this thread was the psychology. About how otherwise very intelligent people get tricked into scams, and a deep look into the rationalization regarding why they made that decision.

The most powerful post was the one where kombat listed very valid bullet points of why S&D, in retrospect, could have not been seen as a scam (billion dollar company! A+ BBB rating! decades in business!). Really hit home for me. I think it's because when I craft an investment thesis I have similar solid bullet points, and when it goes south (I'm looking at you, risky oil exploration company), I'm left wondering what happened to my previous analysis.
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Re: How am I doing?

Post by Just a Guy »

Landmiss wrote:Hello, I don't know if you're still around, but the Royal Links raw land is up for sale at $150 thou per acre. I know it's been almost a year since you last posted, but how could it go from $40,000 to $150 in a year. Thanks.
Land is only ever worth what someone is willing to pay for it. The land was never really "worth" $40,000 to anyone local or sophisticated as an investor. The fact that they sold it for that amount to "investors" is why this is sort of a scam. They only needed one person to get the ball rolling, then they had a "track record" to prove to others that it really was worth that much (often they "sell" a few units to themselves, or arms length people to "seed" the sales). Unfortunately it happens all the time (the TV show American Greed is full of similar stories). The best "scams" I've seen usually involve out of town investors from places where land is much more expensive (say Vancouver or Toronto). You find a nice house in no name Saskatchewan or similar, a house which looks similar to one in Toronto or Vancouver where it's worth millions, and then sell it to "investors" at a "steal", well below Toronto or Vancouver prices. The "scam" is, the place in no name Saskatchewan is really worth peanuts because it's not in Vancouver or Toronto...

Technically, no crime is being committed in this case, nor Kombat's for that matter, as there is nothing illegal about selling a home, or land, at whatever price you can get for it. They are selling an actual product, the fact that you paid too much isn't illegal. It's like "hot potato" the one left holding it when the music stops gets burned.

The land went from $40,000 to $150 because no other victims could be found.
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Re: How am I doing?

Post by naps069 »

Wow!!

Normally just a lurker on this forum. I have to say that I have learned alot from you and your experiences with this land banking deal. Also I applaud you sharing you experiences with us and keeping this forum updated on such a painful experience.

I have been tempeted by people at work that were looking for investors in similar deals. After reading this I have to tell you I wont be taking them up on it.

I with you all the best in 2016 Kombat and hope that you see your monies returened to you.
"If it doesn't make dollars, it doesn't make sense"-Cant remember
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Re: How am I doing?

Post by SQRT »

Just a Guy wrote:
Landmiss wrote:Hello, I don't know if you're still around, but the Royal Links raw land is up for sale at $150 thou per acre. I know it's been almost a year since you last posted, but how could it go from $40,000 to $150 in a year. Thanks.

The land went from $40,000 to $150 because no other victims could be found.
Agree with what you said but I think it went to $150,000 per acre, although the quote is a little ambiguous.
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Re: How am I doing?

Post by cpulord1 »

kombat wrote:Our mortgage was up for renewal next July, but I had a feeling rates had already hit bottom and would be creeping up by then, so in November, I started the ball rolling for an early renewal. We just finalized it last week, and got a new 5 year fixed at 2.64%. We paid around $2,000 in penalty, plus another $1,000 in lawyer fees and other miscellaneous fees, but we used the opportunity to take out $64,000 to max out our TFSAs. The day we signed the papers (last Thursday) was the same day two banks announced fixed-rate mortgages were going up. :)

So our mortgage is now back up to $270,000, but we have $265,000 in our RRSPs and $83,000 in TFSAs. We're on a 10-year plan to pay off our mortgage, although for at least the first 5, I'm not in too big of a hurry, as 2.64% is a great rate, IMHO. If rates are significantly higher in 5 years at renewal time, we can always just take the money back out of the TFSA and pay it back down.

No word on the land banking "investment." Honestly, I'm inclined to just drop it from our Net Worth statement completely, consider it lost, and forget about it.
Hey guys!
I just joined this forum just so I could follow and respond to this thread!
Kombat! I'd love to talk to you as I have also invest in S&D

I'm a little embarassed to admit this, but I bit their line and sinker HARD
for $120k (4 different projects). This was also back in 2006 and I was just in the middle of medical school (leveraged from a student line of credit) and was sold a sure fire plan for a 3-5 year return. Thankfully, I finished med school and I'm young so this isn't going to bankrupt me but it definitely hurts ALOT.

I've almost lost all hope in getting this back and was wondering if you ended up going to see a lawyer about this.
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Re: How am I doing?

Post by kombat »

Hey cpulord1,

Ask away, or feel free to PM me. I'm in Ottawa if you happen to be nearby and want to get together for a beer. I can't really tell you much that I haven't already confessed in this thread. :) This year will be the 10 year anniversary of our ill-fated "investment." Like you, it didn't really impact us that much ($77k), but it's painful to think how much interest we've paid on that money over the years, and what it could've grown to had we invested it in something like an index fund.

No, we haven't contacted a lawyer - I'm not really sure what we could allege they did illegally (although I'm certainly receptive to suggestions).
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Re: How am I doing?

Post by cpulord1 »

kombat wrote:Hey cpulord1,

Ask away, or feel free to PM me. I'm in Ottawa if you happen to be nearby and want to get together for a beer. I can't really tell you much that I haven't already confessed in this thread. :) This year will be the 10 year anniversary of our ill-fated "investment." Like you, it didn't really impact us that much ($77k), but it's painful to think how much interest we've paid on that money over the years, and what it could've grown to had we invested it in something like an index fund.

No, we haven't contacted a lawyer - I'm not really sure what we could allege they did illegally (although I'm certainly receptive to suggestions).
Well currently I'm in the process of contacting the real estate group that are listing some of S&D's properties.... like how did they come to the value they are trying to sell at?
I feel like it's a ploy to keep their investors willing to continue waiting... shouldn't we also have some right to have a say what they are trying to sell for? In a down market, would it make sense to discount the price, take a smaller gain but at least have some return on the money (after all, the sales pitch was to maximize return in 3-5 years)

What I would go after them for is the fact that one of their hard sales tactics was saying it was a no lose situation. If I wanted out, they would buy the land back from me at the original cost. So far, they have not been willing to do that.
Their CEO met with me once and gave me this long story about how the company had no liquid cash because their accountant scammed them by not paying the corporate taxes and apparently running off with a couple million dollars. Super sketchy right??!!
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Re: How am I doing?

Post by Mukhang pera »

Kombat,

I was heretofore unaware of this site, but I wandered over because Just A Guy made reference to your tale of woe on another site. This thread has definitely been worth the read and, like others, I salute you for your willingness to share the whole debacle, and in such lucid fashion.

You now have heard from cpulord1, who is similarly situated. The two of you might want to get your heads together on this, and with any other investors you can find, whether through title searches or otherwise. “Otherwise” would include getting S&D to produce a list, but they might be recalcitrant.

Awhile back in this thread a “corporate finance lawyer” suggested retaining a real estate lawyer. While I am unsure of the “corporate finance lawyer’s” actual credentials and provenance (one must wonder when in a single post he twice refers to mortgage principal as principle, a mistake most high school grads would not make), he has a point about getting some professional help.

I am not familiar with Alberta law, but I suspect it has a Partition of Property Act or similar legislation. I despair that S&D will ever return your full investment, or even a significant portion. I think the best that can be hoped for is for you and the other fractional owners to get an order for sale of the whole, an order for conduct of the sale and then to list and sell the whole quarter section (if I recall correctly the land surface area) at whatever the market will bring today. Then the net proceeds would be shared according to your registered interests. That’s about the only way I see to bring matters to a head and to end it once and for all, which I am guessing you would like to accomplish. To that end, I agree with the notion of retaining appropriate counsel.

Another bit of advice. Do not forget that every time you invest and make money, it is wholly due to your perspicacity, acumen and savoir faire. You need share your profits with no one. However, when you lose, it is always someone else’s fault entirely and someone else must underwrite your losses. Never lose sight of this principle of investing. To that end, government is a wonderful, deep pocket, target. What are the taxpayers for, if not to provide succor in your hour of need?

So, my point here is that, in a case such as yours, there must be some government agency that failed miserably in its fiduciary duty to protect you from yourself. Perhaps what you bought was sold without a required prospectus, for example. Perhaps it was a “securities offering” that failed to pass muster, but the watchdogs were not watching. Perhaps there was some non arm's length dealing that should have been disclosed and was not. The possibilities are endless.

I am unfamiliar with Alberta, having only been an occasional visitor, but it probably has regulatory bodies such as a Securities Commission, Superintendent of Brokers, Superintendent of Real Estate, etc., some or all of whom should be called to account. To help in that regard, there is probably an ombudsman’s office (or, today, ahem, an ombudsperson). This kind of thing is good fodder for a complaint to that august body. I recall some years back a complaint being made to the B.C. ombudsman about an outfit called Newport Realty. Investors there all signed documents saying they recognized they were making a high-risk investment in which all their money might be lost. That did not stop the ombudsman from taking up the cudgel. So don’t be pusillanimous! Make government pay! If no other choice, start a class action and get not only a return of principal and interest, but (depending on the nomenclature used in the local courts), non-pecuniary, general, punitive, exemplary and aggravated damages! Don't stop until government and the citizenry feel the lash!
Last edited by Mukhang pera on 03 Mar 2016 18:25, edited 1 time in total.
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