Quote:
Originally Posted by blankall
Another thing to keep in mind was that during those record high interest rate times, they also had ridiculously high rates on guaranteed investments. With a 10+% return, if you have a 25% downpayment, you can wait 4ish years, and you'll have a 50% downpayment, plus whatever else you can save in that time....not the case anymore. Now it's struggle to get a downpayment...then if you don't act now, in 4 years, that downpayment has likely decreased relative to price.
|
Well those rates are all relative though. So if you have a double digit GIC, and you think you're way ahead of the game, but inflation is 12%, you're basically guaranteed to lose money. Similar to this past year where you could get 5% from GIC's...but inflation was running at 8%.
And btw, you're not doubling money in 4 years at 10%. You need more like 18% at that point and inflation is probably at 21%?
If there's one bright side to what we've seen in the past twelve months though, it's that you can actually get a good bond yield or fixed rate. I used to et asked things like "hey, I've saved for a house and I want to buy in the next year, but in the meantime I want to invest this and make some money!" Unfortunately, for prudent risk management, you can't really invest those funds because you need them soon. But a "high interest" vehicle was like 0.9%! Now at least you can get say 4-5% and wait it out.