Wednesday, July 25, 2012


Wide Open
Part of the reason for my fewer than normal updates lately has been my visit to western Canada for my son's wedding.  It is always a great joy for me to meet people there.  For a guy that lives in Southwestern Ontario, and spends a certain amount of time in Toronto, I am simply overwhelmed by the openness, and friendliness of western Canadians.  

I suppose it is because the region where I was visiting is more rural, as a whole, that I seemed to find more people who work for a living rather than living to work (although not, perhaps if I was to spend time at Fort McMurray!).  Probably because of the wedding, there was a large emphasis on family, especially on their part.  People came from far and wide out there to attend the wedding, while few from my family in Ontario could interrupt their busy schedules.

Old Theme
While there, I found myself engaged in a particular conversation over and over again.  I may not notice something if it happens only a couple of times, but several times within a few days I found myself discussing the expectations of people, and how those expectations seem to have changed over the last number of years.  The actual conversations took different form, and involved different people, but each time the theme was the same.  That theme was, in short, immediate gratification.

The Lost Art
Whether it was the store owner, the retired worker, the corporate adviser, or simply, parents, I was surprised when the same theme kept coming up.  In each case, I found myself discussing the seeming loss by people to see any benefit in "paying their dues" or adopting a longer term approach as a means of achieving their goals.

We also see much of this in the media these days.  Apparently we taught our children everything we know.  The willingness of people to accept debt in order to get what they want today is what resulted in the last Great Recession.  Credit, in itself, is not so bad, but neither is saving first, before making a purchase.  I come from a humble family, and growing up, the family home was the only thing we purchased on credit.  If I wanted to buy anything, I had to save, not just ten, or twenty percent of the purchase price, I had to have an amount of cash equivalent to the total.  Think how much money I saved myself in interest payments!       

No Worries?
What I learned growing up was how to live within my means.  We need to budget not just for our expenses, but for our savings, as well.  Most people I talk to have very little in investments, other than the family home.  "No money!", they say.  Imagine if they took all of the money they have already paid in interest and could use that to create an investment account!  Most people point to their credit card when I ask if they have an emergency account.  No wonder Mark Carney of the Central Bank is so worried about household debt levels in Canada.   

A Line In The Sand
I understand the Banksters have done everything they can to get us into as much debt as possible, and how easy and harmless it is made to seem when it comes to not paying off that credit card balance at the end of the month.  Yet, there comes a point when one must draw a line in the sand.  If we are smart, that line is a whole lot less than our total income.  Understand that the world is currently in a deleveraging cycle which could last for a decade, or more.  Everyone is going to be demanding a larger share of our wallet.  We need to ask ourselves where that money is going to come from.

As for my son, everything I have seen would indicate his bride is as prudent with money as the rest of her family - one of her many great qualities!

Which way is your level of debt heading?

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