Canadians naive about how long they’ll be in debt

[Slava]

Originally Posted by V

That's why you need to siphon off your parents' wealth before they kick the bucket. You can save hundreds of thousands of dollars that way.

Thats definitely true. There are also a fair number of parents out there who think along the lines of "I worked for it and saved it, so I don't really care if there is money left for them."

[Cowperson]

Originally Posted by Slava

Thats definitely true. There are also a fair number of parents out there who think along the lines of "I worked for it and saved it, so I don't really care if there is money left for them."

I encourage that line of thinking.

Cowperson

[albertGQ]

The only debt that I would be okay with is if I was able to borrow $500M. Then I can invest in a Players only hockey league. I'd make $500M over the next couple years so I can pay off the initial $500M investment.

This would be a slam dunk to make money. I'd put games on PPV and expect a buyrate of 2 million for every game.

[flamesaresmokin]

Originally Posted by Slava

There is no denying that there is a lot of that here in Calgary. There are a significant amount of people who make a lot of money. The funny thing is though that most of them are not living the high life either. Quite a few really well to do people are not living in multi-million dollar estates with fancy cars in the garage and doing laps in a swimming pool filled with money.

Clearly you haven't been out to Bearspaw, Springbank or some of the outlying areas of the city in a long while.....Some of the largest estates in the country are situated just minutes from the city limits.

[The Yen Man]

A million dollar home in Calgary isn't really that special. All those estate houses in communities like Tuscany, Aspen Hills, and Wentworth look like normal houses in the subburb, but just bigger and better upgrades.

[Dion]

Originally Posted by Slava

Thats definitely true. There are also a fair number of parents out there who think along the lines of "I worked for it and saved it, so I don't really care if there is money left for them."

When it's your time, make sure the cash drawer is empty. That's what i've always told my parents over the years. It's not thier responsibility to help fund my retirement.

[Slava]

Originally Posted by flamesaresmokin

Clearly you haven't been out to Bearspaw, Springbank or some of the outlying areas of the city in a long while.....Some of the largest estates in the country are situated just minutes from the city limits.

I've got clients in those areas and have seen the numbers. I realize that this isn't the case for everyone in these areas, and wouldn't suggest that for a second. I also wouldn't suggest that everyone else is living like some other areas in the city that are lower in the socioeconomic ladder.

[Mr.Coffee]

I feel like there are a lot of people that bought property before 2006 or 2005 or so and realized some serious equity appreciation. I have friends that did this, were basically just fortunate, and then turned around and criticize me for doing the exact same thing they did only at a different time and now I am facing debt and a fairly intimidating mortgage. They tell me I am crazy to have this huge mortgage. And maybe I am! But I just don't get where they get off being all judgey, and it's pretty annoying.

It feels like I have debt up the ass but the primary debts I have I should be clear in the next 2-3 years and most of it was used to renovate my property which (hopefully) would be realized in sale value in a worst case scenario.

Luckily I started my career early(ish) compared to peers so it's helped but buying a home in Calgary (or condo, really) is pretty cost-prohibitive, and unless you're making decent money I have no idea how you'd be able to afford ownership plus a life. It's not like I am living the life of luxury and I make a pretty good wage. It's really not all that easy, so I really can see how people would start to slowly accumulate debts and hope that their inheritances (if they are expecting one) could bail them out. This would especially be the case if you have kids.

Agree that banking on inheritances is probably overall a poor financial strategy, I just can see why or how people get to that point.

Drinking and eating out in this city has gotten borderline criminal. Cabs... everything is pretty expensive really.

[Kybosh]

Originally Posted by The Yen Man

A million dollar home in Calgary isn't really that special. All those estate houses in communities like Tuscany, Aspen Hills, and Wentworth look like normal houses in the subburb, but just bigger and better upgrades.

It kills me when people say this. I don't care how common million dollar homes are in Calgary, even modest home mortgages are a big deal. A $300k mortgage is a lot of money and people are foolish if they say otherwise. Consider this, if someone buys a $1M house with 20% down, they still have $800k in mortgage owing. Once you factor in interest and other stuff, the true cost becomes insane. Owning a house, regardless of the cost, is special. People should remember that.

[AMG_G]

Originally Posted by Kybosh

It kills me when people say this. I don't care how common million dollar homes are in Calgary, even modest home mortgages are a big deal. A $300k mortgage is a lot of money and people are foolish if they say otherwise. Consider this, if someone buys a $1M house with 20% down, they still have $800k in mortgage owing. Once you factor in interest and other stuff, the true cost becomes insane. Owning a house, regardless of the cost, is special. People should remember that.

Yes I agree and it doesn't stop at the million dollar home...what about the furniture, cars, vacations and latest gadgets...it gets pretty exhausting keeping up with Mr Jones.

[The Yen Man]

Originally Posted by Kybosh

It kills me when people say this. I don't care how common million dollar homes are in Calgary, even modest home mortgages are a big deal. A $300k mortgage is a lot of money and people are foolish if they say otherwise. Consider this, if someone buys a $1M house with 20% down, they still have $800k in mortgage owing. Once you factor in interest and other stuff, the true cost becomes insane. Owning a house, regardless of the cost, is special. People should remember that.

I meant it's not special aesthetically. People picture a million dollar home to be some grand mansion like they see on TV. I'm just saying in Calgary, that house just looks like a normal subburban home.

[Kybosh]

Originally Posted by The Yen Man

I meant it's not special aesthetically. People picture a million dollar home to be some grand mansion like they see on TV. I'm just saying in Calgary, that house just looks like a normal subburban home.

Fair enough. I find the bulk of houses in this city to be bland and boring personally.

[Red]

Mr. Coffee, you need to define what "the same thing" is.
They bought the house for half the money you did. Nothing the same about it.

Perfect example of buying at the right time and buying at wrong time.

[flamesfever]

Originally Posted by Slava

There are also a fair number of parents out there who think along the lines of "I worked for it and saved it, so I don't really care if there is money left for them."

That's true. I believe, in general, that's for parents whose children are doing well for themself, and don't really need your inheritance. For some, however, there may be children, for various reasons, who need a leg up to afford a decent life when you've gone, and their inheritance may ensure that opportunity.

There are many different situations out there that determine your attitude toward estate planning.

[Flames in 07]

Originally Posted by Tinordi

Debt is debt. The fact that no one seems to have learned some very recent lessons on the risk of investing in the housing market is frankly quite scary. Look down south and see what's going on there house prices are STILL falling.

Your are flat out wrong. Asset backed debt is different than just owing money. It's really quite shocking how little most people comprehend financial concepts. The vast majority of the people who have posted here have no clue.

[Tinordi]

Originally Posted by Flames in 07

Your are flat out wrong. Asset backed debt is different than just owing money. It's really quite shocking how little most people comprehend financial concepts. The vast majority of the people who have posted here have no clue.

Laugh.

Asset backed debt means nothing if that asset isn't earning income for you.

So you think that taking a loan out to buy a car is a good idea? That's asset backed debt.

[Tinordi]

Or is a good idea to take out a $300,000 loan and invest it in tech stocks? That's asset backed debt. According to you I'm not in debt if I do that.

[Flames in 07]

Originally Posted by Tinordi

Laugh.

Asset backed debt means nothing if that asset isn't earning income for you.

So you think that taking a loan out to buy a car is a good idea? That's asset backed debt.

Well if you can handle the payments on the car that's fine. I don't but whatever. What I mean is that CC debt is different than a mortgage. That's all the realtor was saying earlier and everyone jumped on him.

[Flames in 07]

Originally Posted by Tinordi

Or is a good idea to take out a $300,000 loan and invest it in tech stocks? That's asset backed debt. According to you I'm not in debt if I do that.

Most millionaires are made by borrowing money and earning a return in excess of the cost of debt.

[flamesfever]

I recall talking to a bank manager one time, and he said there were many people coming in who lived in posh houses, drove fancy cars, and went on expensive holidays, that came into his bank demanding loans. And when you subtracted their debts from their assets, they were were worth less than zero.

It seems there are two types of people. Some who are building estates, and others who spend every cent they earn, and don't really care to leave anything when they die.

As far as the monster houses in some of the expensive neighbourhoods, I understand that most are either owned outright, or mortgaged to the hilt.