Canadians naive about how long they’ll be in debt

[chemgear]

http://www.cbc.ca/news/canada/calgar...is-decima.html


The poll by Harris/Decima asked respondents how confident they were about being able to raise $2,000 within a month if an unexpected need arose.
While 55 per cent said they were extremely or very confident they could raise the cash, 92 per cent said they'd consider borrowing to come up with some of the cash.

One-in-five Canadians surveyed said they believe it would take them two months or longer to come up with $2,000, even if they could borrow. Among those who said they couldn't raise the money within a month, 26 per cent said they couldn't raise the money no matter how much time they were given.

"That's a lot of people who are already at their maximum borrowing capacity," Hoyes said.

[BlackArcher101]

Well chalk me into that group. I don't know how I would be able to save $2000 in one month, even if I stopped paying for anything but neccessities. (Assumming my stash is at $0 and I can't borrow). Why did they use $2000?

[chemgear]

Yeah, I wouldn't assume they mean $2,000 starting right that instant. I assume it's a reflection of what people have saved/have handy. So somebody who's got a good rainy day fund would answer immediately and in cash.

Could certainly be an statistical outlier - the 1,010 sample size large enough? Not sure myself.

[Ozy_Flame]

This shouldn't be hard for CP'ers . . . Damn near everyone makes over $100k.

[BlackArcher101]

Perhaps I misread it then. I was thinking it meant to come up with an additional $2000 to what you already have. I guess "raise" could mean selling of investments or borrowing. If that's the case 26% surprises me.

[Cecil Terwilliger]

Originally Posted by BlackArcher101

Perhaps I misread it then. I was thinking it meant to come up with an additional $2000 to what you already have. I guess "raise" could mean sellilng of investments or borrowing. If that's the case 26% surprises me.

I'm too lazy to read the article for more details but I also find that wording to be unclear.

If we're talking about the ability to produce $2k on a short term basis regardless of its source (savings, borrowing, selling investments etc) as long as it isn't a gift or stolen then that number reported should be alarming for a lot of people.

[albertGQ]

My LOC with a $0 balance is my emergency fund. I wonder if that counts according to the poll

[polak]

Originally Posted by Cecil Terwilliger

I'm too lazy to read the article for more details but I also find that wording to be unclear.

If we're talking about the ability to produce $2k on a short term basis regardless of its source (savings, borrowing, selling investments etc) as long as it isn't a gift or stolen then that number reported should be alarming for a lot of people.

What about new grads/people just entering the workforce?

You have to start somewhere and I'm assuming a good chunk of people in that group fall into that category.

[Codes]

Usually I have a couple grand in savings at all times. However, I just dumped a lump sum against my student loans and paid tuition. Admittedly, my savings haven't been recouped, but it hasn't been a full month yet.

That said, I have no credit card debt, so in a pinch, I could throw $2000 on to it. I also do not own a house.

[chemgear]

In that article, they have two videos that discuss the numbers. They do point out that the sample size could be considered small and there are no details about the age distribution of the sample. Additionally, they also do acknowledge that the survey is from a bankruptcy organization - perhaps some bias there.

Still interesting especially with what's going on with record debt levels and how housing is these days.

[trumpethead]

Originally Posted by yads

Let's not get pedantic. The original quote was implying cash needs to be marked to market on a constant basis and that's obviously not the case.

I like that word. Pedanticism is what makes CP great (and explains why it has taken us 5 pages of posts to define what "debt" is).

[Flamenspiel]

US Real Estate Market turned awhile ago in good locations and it looks like its a general improvement now. Time to jump in!!!

http://money.ca.msn.com/investing/ne...or-us-cities-1

[DownhillGoat]

The wording on these polls to create a bias is just brutal.

"The survey, done for bankruptcy trustees Hoyes, Michalos & Associates, finds nine out of ten respondents would consider borrowing money to cover an unexpected cost."

And? I've considered doing a whole lot of things before. 9 out of 10 respondents ACTUALLY borrowing money to cover an unexpected cost would be the worrisome issue.

[chemgear]

Originally Posted by fotze

I think we should all invest in the companies that do these studies/polls, 3 a day it seems, business is good!

And here is an article about how many articles there have been just this week!

http://business.financialpost.com/20...k-of-warnings/

The web site run by the non-profit Investor Education Fund said 54% don’t budget regularly and 24% don’t budget at all. There is probably good reason for that since 44% aren’t saving for retirement, 44% aren’t saving for big ticket items and 42% don’t save for their kids education. Another somewhat disheartening number — 48% don’t save at all. But luckily the average Canadian had 2.16 credit cards in 2011 compared to .87 in 1991 to help fund their spending.

[Traditional_Ale]

As someone who doesn't use a credit card I find this disturbing. It's like the working class exist only to subsidize the entitlement of the middle class, while for all intents and purposes being owned by the 1%. It's amazing I still care enough to even post about it.

[Red]

Writing on the wall?

“This reality will be compounded by an expected drop in home value and a rise in interest rates which will increase monthly bill payments.”

[Violator]

I have trouble paying off my 1400 dollars in credit card debt right know.I always feel smart and responsible when I'm asked numerous times a day if I want another credit card and decline.

[chemgear]

Originally Posted by Red

Writing on the wall?

“This reality will be compounded by an expected drop in home value and a rise in interest rates which will increase monthly bill payments.”

Writing has been on the wall for a long time now.

"But it's okay, don't worry - it's different here."

[Red]

Originally Posted by chemgear

Writing has been on the wall for a long time now.

"But it's okay, don't worry - it's different here."

You forgot "cheap credit is good" and my favorite "mortgage is not debt"

[Deegee]

Bloody hilarious to me that there is still an argument about debts being a liability or not. You can have a positive net worth, but a debt is a liability. When you write out your net worth, what side do you put loans on? Asset or liability?

Unless your lending out money yourself, I don't see a lot of loans falling on the asset side.