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Posted Consumer Debt

World Debt clock comparison… How’s Canada doing compared with the world?

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?”

Posted Consumer Debt

Debt diversification vs Debt consolidation…who wins?

debt

ONLY IN CANADA

Attention:  Bankers, close your ears.. we don’t want you to hear this.  Credit card balances, lines of credit, car loan, student loan, home reno loan, personal loan..   If you have one or more of these and you own a home, you’re probably losing money by paying a higher interest rate.  In many cases, $thousands are lost and overpaid each year.   And your Banker is laughing and recording Record profits!!

It’s surprising how many of us have some, or all of these debts… and ALSO a house with lots of equity.  Yet, as Canadians, we somehow think it’s better to separate our mortgage from other debts.  We somehow think it’s good to pay down our mortgage but then rack up other debts.  This attitude has puzzled me for years.

check out this chart for one client.. tell me if this looks familiar: Continue reading “Debt diversification vs Debt consolidation…who wins?”

Posted Consumer Debt

Personal debt level concerns are overblown…!

record low ratesThere’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…!”

Posted Consumer Debt

News stats..Higher debt, but lower defaults

debt aminationSaw 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”