Canadians 'drowning in debt': 47% will borrow to cover costs, survey says

[puckedoff]

47% spend like drunken sailors, what luck then that all of CP is the 53%, according to this thread. What are the odds.

[stone hands]

its not really surprising to see people on CP(at least the ones in this thread) have their spending under control. that wage distribution poll that was done a while ago showed that CP tends to skew on the extremely high end of earners and with that kind of take home you can either out-earn ####ty spending habits or have the financial literacy to not have them in the first place

[Slava]

Originally Posted by Jason14h

The people who don't save will have a fully paid off home, and can reverse mortgage, HELOC, downsize and use that money in retirement. Most will be fine, chilling at home having more entertainment options then ever, consuming cheaper goods then ever.



People tend to overestimate (unless they just want to travel a ton) how much they actually need in retirement per year. Or find ways to make side cash in retirement.



People who are saving a ton (and a lot are oversaving for retirement) will probably realize they have a ton more money then needed and either die and leave as an inheritance or use to give their children advantages in life (House downpayments, etc) This will allow their next generation (generally) to have a better chance of being a saver vs a debter.



The people who didn't save will then complain about the wealth distribution which will continue to widen.

I think this is questionable. Are some people saving more than they need? Sure. But I've done financial plans for a lot of people in a lot of situations over the years and my conclusion wouldn't be that a lot of people save too much.

Of course, you're right that people have other assets and things like that to fall back on, and that can be sensible depending on their plan. But at a time when people are living longer, spending more and overall doing more in their retirement (at least for their first decade or so), retirement and crossing things off your bucket list isn't cheap.

[Jason14h]

Originally Posted by Slava

I think this is questionable. Are some people saving more than they need? Sure. But I've done financial plans for a lot of people in a lot of situations over the years and my conclusion wouldn't be that a lot of people save too much.

Of course, you're right that people have other assets and things like that to fall back on, and that can be sensible depending on their plan. But at a time when people are living longer, spending more and overall doing more in their retirement (at least for their first decade or so), retirement and crossing things off your bucket list isn't cheap.

A 'lot' is relative. But in your opinion how many people are saving more then they need.

Also, people who are good with savings or finance may not need your services as often.

[Jason14h]

Originally Posted by puckedoff

47% spend like drunken sailors, what luck then that all of CP is the 53%, according to this thread. What are the odds.

The drunken sailors aren't posting! They are too busy buying bottled water or Starbucks on their breaks !

[GGG]

Originally Posted by you&me

Sounds like a nightmare.

This might be the most privileged thing I have read. We were a family of 5 rather than 6 but I don’t think we knew what we were missing in a large home. In certainly wasn’t cramped.

But it really shows the change in mindset between what you believe you need and what you actually need overtime.

[Jacks]

Instead of using your bank card or credit card put $40 cash in your pocket and use that for small daily expenses. You'll find out in a hurry how much money you are pissing away on little things every day.

[TheIronMaiden]

Originally Posted by Jason14h

The drunken sailors aren't posting! They are too busy buying bottled water or Starbucks on their breaks !

Cuttin loser laps around the block while listening to satellite radio.

[stone hands]

Originally Posted by Jason14h

The people who don't save will have a fully paid off home, and can reverse mortgage, HELOC, downsize and use that money in retirement. Most will be fine, chilling at home having more entertainment options then ever, consuming cheaper goods then ever.



People tend to overestimate (unless they just want to travel a ton) how much they actually need in retirement per year. Or find ways to make side cash in retirement.



People who are saving a ton (and a lot are oversaving for retirement) will probably realize they have a ton more money then needed and either die and leave as an inheritance or use to give their children advantages in life (House downpayments, etc) This will allow their next generation (generally) to have a better chance of being a saver vs a debter.



The people who didn't save will then complain about the wealth distribution which will continue to widen.

i dont think oversaving is a thing, you are just accelerating your retirement date which is probably the best use of money i can think of

[peter12]

A large house is mostly an unnecessary inconvenience. Studies have shown that the vast majority of time is spent in the kitchen or dining room and that small, ancillary rooms are empty most of the time.

[Fuzz]

Originally Posted by peter12

A large house is mostly an unnecessary inconvenience. Studies have shown that the vast majority of time is spent in the kitchen or dining room and that small, ancillary rooms are empty most of the time.

A large garage though? That's worth it!

[Sliver]

Originally Posted by Jason14h

A 'lot' is relative. But in your opinion how many people are saving more then they need.

Also, people who are good with savings or finance may not need your services as often.

lol, I don't think that's the case. People aren't opting out of visiting a financial planner because they have things under control. People who don't save don't plan their financial savings so don't visit a financial planner.

[Scroopy Noopers]

Originally Posted by TheIronMaiden

This thread seems like a good place to ask a question that I have been meaning the bring up on a slow day. When was the last time you went an entire day without buying anything. When was the last time you went a week?

Originally Posted by Weitz

If you are not doing this 3-4 times a week you already have a problem IMO.

It’s amazing how many people have this issue though. I had a teacher in college, late 30s guy, had a quad espresso Starbucks every day. What’s that, like $10 + the overpriced snack he likely got? Every day.

Same teacher also started a discussion with the class “how much do you expect to be paid? Is $100,000 enough these days?”

Dude... it definitely can be.

[Erick Estrada]

Not sure if it's been discussed seeing this is 11 pages in but it's so much easier to spend money today compared to when I was young. Before the internet I would have to get in a car and drive to a mall or distributor of what I wanted and there was no guarantee they would have what you wanted so many times you would come home empty handed but money still in your wallet. A lot of more specialized things had to be ordered via phone or mail order so not nearly as convenient as now where you can just go onto Amazon or any supplier site and order whatever you want and have it in a couple of days or so. It's been a boon for the credit card industry for sure but I'm not so sure it's been great for the consumer that's probably putting too many luxury goods on credit. I'm finding out that Amazon has not been a great thing for my wife's credit card.

[peter12]

Originally Posted by Scroopy Noopers

It’s amazing how many people have this issue though. I had a teacher in college, late 30s guy, had a quad espresso Starbucks every day. What’s that, like $10 + the overpriced snack he likely got? Every day.

Same teacher also started a discussion with the class “how much do you expect to be paid? Is $100,000 enough these days?”

Dude... it definitely can be.

Are people really bothered by how much other people spend?

[Scroopy Noopers]

Originally Posted by peter12

Are people really bothered by how much other people spend?

No not at all. But he was kind of preaching to the class that $100,000 isn’t considered a high paying job. Which was and is ridiculous. Just showed his mind set, that spending $5k in take out coffee a year is just normal life.

[Slava]

Originally Posted by Jason14h

A 'lot' is relative. But in your opinion how many people are saving more then they need.

Also, people who are good with savings or finance may not need your services as often.

It's probably the opposite though. People who don't save and have no plan for retirement probably don't think they need my services, so I see less of them than I do people who want to plan and have money saved. I get lots of people retired though, and they weren't in a good position for that before we put things together. But anyway, this isn't about a sales pitch for me and my services.

It's hard to come to a percentage on how many over-save though because I haven't done a good analysis of that. I think that there can be a question between how much someone has saved for retirement and how much of that can be safely used as income each year. But look at it from this angle. If you are retiring today, say at 65, we have to plan for you to live until 95. So you need 30 years of income. To keep it simple, let's say you have no company pension and some CPP/OAS (I used $18k/yr which puts you at the higher end of CPP) and you want $50k/year in after-tax dollars. I won't make allotments for reduction in spending as you age, and we won't get into what kind of return you can get or things like that. You need just under $1.5m to make that a reality.

To be entirely clear, no one should rely on that back of the envelope calculation and try to retire with it, as clearly YMMV. But that's a raw, no inflation, taxes totally estimated figure. So sure, you could withdraw money from a house, or have the cash in the bank or wherever, but over that 30 years you need that kind of cash coming in to sustain your lifestyle.

[undercoverbrother]

Originally Posted by Slava

It's probably the opposite though. People who don't save and have no plan for retirement probably don't think they need my services, so I see less of them than I do people who want to plan and have money saved. I get lots of people retired though, and they weren't in a good position for that before we put things together. But anyway, this isn't about a sales pitch for me and my services.

It's hard to come to a percentage on how many over-save though because I haven't done a good analysis of that. I think that there can be a question between how much someone has saved for retirement and how much of that can be safely used as income each year. But look at it from this angle. If you are retiring today, say at 65, we have to plan for you to live until 95. So you need 30 years of income. To keep it simple, let's say you have no company pension and some CPP/OAS (I used $18k/yr which puts you at the higher end of CPP) and you want $50k/year in after-tax dollars. I won't make allotments for reduction in spending as you age, and we won't get into what kind of return you can get or things like that. You need just under $1.5m to make that a reality.

To be entirely clear, no one should rely on that back of the envelope calculation and try to retire with it, as clearly YMMV. But that's a raw, no inflation, taxes totally estimated figure. So sure, you could withdraw money from a house, or have the cash in the bank or wherever, but over that 30 years you need that kind of cash coming in to sustain your lifestyle.

My money will go farther in Sierra Leone, lovely climate as well.

[peter12]

Originally Posted by undercoverbrother

My money will go farther in Sierra Leone, lovely climate as well.

Put some of those infantry skills to good use there too.

[Slava]

Originally Posted by undercoverbrother

My money will go farther in Sierra Leone, lovely climate as well.

There's a large number of Canadians who want to retire abroad for those (and other) reasons!