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Originally Posted by DownInFlames
LOL. Our entire economic system is built to reward "savers".
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30 or 40 years ago it was far better to be a saver than it is today. With 15% interest rates anyone with brains saved to buy a fridge or car instead of borrowing. Savers could invest their money in risk-free vehicles with guaranteed 15% returns. Paying off a mortgage early yielded major, major benefits. It was difficult to get a credit card, and limits were low.
Today governments and banks are so desperate to keep the wheels of the consumer economy spinning that interest rates are near-zero and they’ll give loans and lines of credit to anyone with a pulse. You can buy everything from sofas to TVs to cars on credit with zero down. Someone who paid for home renos or a vacation with a line of credit used to be regarded as reckless. Today it’s perfectly normal.
On the other side of the equation, risk-free bonds and GICs yield 1 per cent returns. Retirement savings either yield low returns, are carry high exposure to risky equities that can plummet in value in an afternoon.
As a consequence, the dread of debt has more or less faded from our culture, and even when mortgages are removed from the calculations, Canadians carry far more debt than their more prudent parents and grandparents did. Personal savings rates are lower than they’ve been in generations.
Frankly, in today’s economic climate you’re kind of a chump if you save.