How to Prepare for Higher Borrowing Costs My debt to income ratio is about 500% while the national average is around 173%. Readers sometimes email me and ask what I will do when interest rates rise. My answer is simple. I tell them I will pay down my debts in an accelerated manner prioritizing the highest interest loan first.… Read More »
Significant Inheritance Coming for Half of Households According to data from Statistics Canada, nearly 50% of households can expect to inherit a significant amount. In fact, the aggregate net worth in 2012 of all senior households was $2.18 trillion while the number of households headed by someone between 45 and 65 was 5.8 million. Dividing the numbers, each household… Read More »
Why Do Governments Target 2% Inflation? The Bank of Canada maintains an inflation rate target of 2%. The official websites of Central Banks in the U.S., in Europe, and in Japan all appear to target this magical number when deciding how to conduct their monetary policies. But why? Inflation isn’t necessarily a good thing. There are ways to grow the economy and generate… Read More »
Canada’s trade deficit rose to a disappointing $3.4 billion in August, one of the highest ever recorded. Economists had predicted $2.6 billion, lol. They were way off. Both imports and exports were down, which suggests the entire economy may be in trouble. It doesn’t help either that Canada’s currency has advanced 7% over the past 6 months, largely… Read More »
Median Income Grows to $70,336 The results from last year’s national census about family incomes have been released. Below is a table showing how much we all made in 2015. Overall the median national income was $70,336. This means half of Canadian households made more than this number, and the other half made less. Atlantic provinces and Quebec… Read More »
Why too much cash not a good thing Holding some cash for emergencies or short term opportunities is a sound idea. But having too much cash sitting around instead of putting the money into investments can be financially unwise. Like most things in life, there is a cost component to cash. Usually cash produces lower returns than other… Read More »