HawthorneVillager.com

Reading through this entire thread, I have to agree with Ol Skool on this topic.

I remember you posted a link to an article in another thread like this very one that spoke of Canadian arrogance when it comes to money and our debt levels. We watched what happened in the US, and simply pounded our chests and snubbed our noses at them and said it will never happen here, we're so much better than they are.

Now I won't claim to know when it will happen, or how bad it will happen when it does, but cheap money won't last forever. It's going to catch up to us at some point. When it does, I think we'll look extra dumb as Canadians, because we watched it happen down south, and just kept going on our merry way, doomed to learn nothing from others mistakes.

I don't think we kept on our merry way at all.
Our governments stepped in and got rid of 0% down mortgages, and 40yr amortization...

so now only a couple that both make $38k/yr can afford a half million dollar house and take on a $470,000 mortgage.

Imagine that... a young married couple, early 20s, and the banks give them $470,000 without batting an eye.

You're right. We're following, but you'd like to hope at a less severe rate.

New home needs furniture. (Don't pay a cent event). New home needs fence. New home needs 50 inch TV. New home needs paterned concrete walkway, etc etc etc... Now you start having kids (no explination needed.)

Take that, then hop over to leasebusters and have a look at what people are paying a month for a basic SUV/minivan, and times that by 2 beacuse everyone needs 2 vehicles. (Not to mention 70-80 litre tanks of gas.)

To me, it just does not compute. So many people must be walking ever so close to the line of being right under water. I know most people have all their ducks in line, but it does not take a genius to know that there is a segment of us that are in trouble - and it will only take a small segment to bring down the majority of us.

I think that’s a poor gauge. With money is so easily transferred, and regular account interest payments so pathetic, nobody leaves money in these accounts anymore. Every pay day, I leave enough to cover my immediate expenses in my account, and fire the rest off into my savings accounts. Depending on how long it’s been since my last pay check, I could have a few thousand in my checking account, or zero. That doesn’t mean my savings account is too.

All you need for proof is stats Canada, which will verify that Canadians are horrible savers.

I don't OlSkool but judging from some of the salaries and other discretionary spending that gets discussed on this forum puts me in the low income category...LOL

I highly doubt this is the case because most people on this forum seem to be financially savvy from few discussions that I have had. If what you are saying is truly the case then I am definitely foaming...

Because of people who casually (or for other reasons) look at such information, my checking account that I use at the ATM never has more than $500 and my Mastercard (petro points 2cents off/liter) that I use at gas stations and for emergencies is locked also at $500. Most of my 'cash' is actually in a a few 3rd party banks other than my 'daily use' bank. So yeah, totally unscientific and sneaky approach.

Like others have said thats a very poor gauge of finances, like many others my chequing account has almost nothing in it <500 most of the time. Why?
not because I'm dangling on the edge of bankruptcy.

1. My chequing account gives me zero interest, which means I have zero interest in keeping more than than I need.
2. My chequing account is isolated (from a bank card perspective) from all my other accounts. So that if my card is compromised the most Im out is 500 bucks while the bank sorts it out.
3. It also is done that way incase automatic withdraws accidentally take too much out, which isnt as uncommon as it should be. Once again only out 500 bucks while its sorted out

My money is better put elsewhere, and yes I have roughly 3 months cash in the bank in the event of a crisis.

This is what I can't figure out. Are people that well off in my neigbourhood or are they maxing out lines of credits or have lots of inheritance money? I see people buying 400,000-500,000 homes, putting 50,000-100,000 in upgrades and then in less than a year are spending 50,000+ on landscaping, pools, etc. I'm afraid to touch my LOC as I don't like debt. We try to save up for things. Everyone's story is different but I wonder a lot if I missed out on a money tree or something around here

I've enjoyed reading this thread so far and agree with the above; I don't know how some people do it without incurring a lot of debt or living paycheque to paycheque unless they are making a lot of money, have an inheritance or have wealthy parents giving them money (anyone who has read the book The Millionaire Next Door will know what I mean). I think the people who invested in HV early and are now still making good money at their jobs, then sold when Milton blew up, may have the funds to live in a bigger houses, but yeah, I too wonder about some people, but meh, everyone has a comfort level when it comes to debt. Moving to a nicer area also puts pressure on you to do more exterior upgrades and maybe add a luxury car on the driveway to keep up with the Joneses, to say nothing of higher heating/cooling, property tax and utility costs.

Retirement planning is key too, which a lot of people put on the wayside to live a life of consumption. By the time us mid to late GenX'ers and early Gen Y'ers get to retirement age, I don't think the pension system can support us all, so retirement planning should be a priority also, IMO.

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What is the difference between ignorance and apathy? I don't know and I don't care.

Great post!!
I am absolutely NOT depending on any existing pension systems that exist today. IF they are still around and doing well when it's our turn, great, bonus, but I will not work that into my retirement planning.
My wife's teachers pension is great, but they've reduced it 3 times in the past 3 years, not to my surprise at all.

I honestly think the majority of people are up to their eyeballs in debt.

^ I doubt that is the case in Milton....I did a poll few months back and most people seem to have the mortgage amount ~$250K and judging from the incomes that get thrown around here from time to time, I think Milton's household income is probably ~$150K-$200K!. So, most people seem to be fairly well balanced...

Actually it’s the baby boomers who are in real trouble. Health care and social security is built on the premise that working age people pay for the costs of retirees. With so many boomers, those plans will either go bankrupt, or other generations will pay to support them through higher taxes.

The boomers have been screwing the other generations since they came to be, and this will be their final hail mary. Their parents are the last generation that believed in passing along inheritances, and the boomers will not only blow every cent of that, they will force the younger generations to ante up whatever they can afford to keep them alive and comfortable as long as possible. Then as a final FU, most of them will pass nothing on to their children.

Gex X will be fine once the boomers pass on. At that point (and not before), you should see governments returning to balanced budgets, and taxes decline again. Demographics have an underappreciated impact on economies, and I think it’s a large contributor to the current economy. The boomers are staring retirement in the face and realizing that they don’t have enough savings to live the lifestyle they are accustom to.

http://www.yourhome.ca/homes/realestate ... think-tank

Article today in Toronto Star