Debt. It’s a popular topic. Personal debt. Govt debt. Corporate debt. Back in 2013, I published an article comparing Canada’s debt with the rest of the world. Back then, like today, there was so much negative news being written about our so-called high personal debt level. I thought I’d turn the tables on the govt and see how they were doing.
Here we are, 2018 and five years later. We’re supposedly experiencing fantastic economic times. Lowest unemployment in 40 years according to the Dec 2017 job report. Things are so good that we can increase minimum wage by over 30% in Ontario and other Provinces. We must really be doing great, right? Scorecard time…
The logical conclusion, or the simple math equation is with GOOD TIMES OR A STRONG PROSPEROUS ECONOMY = LOWER NATIONAL DEBT…. Consumers are expected to lower their personal debt levels. Isn’t the govt supposed to lower or work on eliminating our national debt? One would think so. Let’s find out… Continue reading “World Debt clock comparison… How’s Canada doing compared with the world?”
From April 2016 to March 2017 Canadians spent $19billion buying U.S. properties, according to the U.S. National Association of Realtors.
Put another way, Canada was only behind China for all foreign purchases of U.S. real estate in 2016. That’s an incredible stat that deserves more attention.
And what’s not been talked about is where Canadians are getting the money to buy these U.S. properties. It isn’t so easy for a Canadian to borrow money from US Bank. So, instead, Canadians are borrowing in Canada by refinancing the mortgage on their house, or getting a secured line of credit. This is called leveraging. Borrowing to invest isn’t a bad thing. Most Financial Planners and advisor promote this.
THE STATS SHOW WE CANADIANS ARE SAVVY INVESTORS
Yet, all we keep hearing about is how Canadians are borrowing and spending like foolish children. And that’s just not true. Here’s some numbers from 2016 …
Continue reading “Canadians bought more U.S. real estate than almost anyone else!”
Wait a minute.. Record savings? Yup, that’s right.. Canadians are sitting on more cash than ever before. A record $75billion, according to a study published today by CIBC economists Ben Tal and Royce Mendes. Click here to read more
Yet, earlier this month, we saw a flood of articles warning of ‘Record personal debt levels’. Which strongly implied we were borrowing and spending like fools. So which is it? Record debt or record savings? Continue reading “Record Savings Levels! Canadians? I thought we had Record personal debt?”
Fixed mortgage rates went up this week on the wholesale market. Only about a 0.10% increase… We are still way below 3.00% for 5 yr fixed rates. Hey, that’s pretty good! (watch for the media to blow it out of proportion soon.. they seem to love feeding on negativity).
Thought I’d share some quick numbers.. Did you know that a $300k mortgage will still carry for $1380/mth? And that’s with a 25 yr amortization. If we go to a 30 year amort, the payment drops to $1221/mth.
Let’s increase the mortgage to $400k.. payments are $1840/mth and $1628/mth for a 25 and 30 year amortization, respectively. Hey, these are still incredibly low mortgage rates. Anything under 4.00% should be considered a gift. (I’ll get into what Canada’s wealthy are doing in a few moments) Continue reading “Mortgage cost today is $1380/mth for every $300k… and sharing high net worth secrets.”
There’s a lot of talk in the media about Canadians carrying too much debt. We’re getting hammered with messages of ‘record high personal debt levels’. It’s true. Our mortgage balances are higher, car loans are higher, student loans are higher, personal loans and lines of credit balances are higher.
Is this a problem? Are Canadians in trouble? Is this a reason to panic? Let’s try to answer…
Well, here’s one very interesting stat that might crush that statement once and for all. Canadians, on average, spend 14% of after-tax income on personal debt.
Did I surprise you? I’ll bet most people thought that number would be way higher given all the negative reports in the media. Continue reading “Personal debt level concerns are overblown…!”
Saw this article today about higher consumer debt levels BUT lower defaults. Equifax Canada is quoted as saying that consumer debt rose by 7.2% in the second quarter 2014 to $1.45 trillion ,compared with $1.35 trillion from a year ago. This includes credit cards, loans, lines of credits and mortgages.
The average Canadian now has $20,759 in personal debt, excluding mortgages. That’s a 1.5% increase since last year. So that means mortgage debt has risen by around 7%. Here’s a heads up… you will see and hear articles sounding the panic alarm… again.
Well, before we hit that panic button, there was one more stat that we should pay attention to. DEFAULTS. Defaults are at their lowest level since 2008. If higher consumer debt levels and lower defaults sound strange to you, it shouldn’t. I’ll explain… Continue reading “News stats..Higher debt, but lower defaults”
Ever notice how all economic news is bad? Seriously, when was the last time you heard Canadians were doing well, financially? Even when we came out of the October 2008 U.S. sub-prime mortgage crisis (notice I’m very specific about the cause of that recession) with flying colours, we kept seeing the same negative messages about how lucky we were to come out of this as strong as we did.
But here we are, 5 years later (hard to believe it’s been 5 years) and all we keep hearing and reading is how the economy is fragile… the housing bubble is coming… personal debt levels are at record highs… housing affordability index has increased (this measures how much of your income is used for housing)… This all sounds terrible and depressing.. maybe we should sell everything, move to another country and herd sheep? Continue reading “Rising personal debt levels.. but how about rising asset levels?”