Recession drags rising number of Albertans into financial ruin

[Derek Sutton]

Originally Posted by FlamesAddiction

All I said was that it was one of the biggest financial mistakes people can make. I didn't say it was a mistake for everyone every time.

When you buy a car on credit you have to accept that you are going to overpay on something that is most likely going to depreciate in value greatly.

Other then real estate, everything you buy depreciates, I think all posters here know that. Any reputable dealership will show you how much interest you pay over the term of the loan and let the buyer make an informed decision for themselves.

[FlamesAddiction]

This probably explains what I mean better than my post:

http://www.investopedia.com/articles/pf/05/041405.asp

(point 4)

[I_H8_Crawford]

Originally Posted by FlamesAddiction

Making car payments for a personal vehicle is probably the biggest financial mistake people make and ruins a lot of people.

I'm very much a cash is king guy, but right now am looking for a car to replace my 10 year old Acura.

When I can lease a car with 0.4% interest rate, Then the $30-40K I would spend on a car is better sitting in my investments earning me ~8+% instead.

I think the key is knowing your finances so you don't go nuts on buying a car above your budget.

In my case a new car+my housing wouldn't even be 50% of my personal take home income, not factoring in my wife's.

[FlamesAddiction]

Originally Posted by I_H8_Crawford

I'm very much a cash is king guy, but right now am looking for a car to replace my 10 year old Acura.

When I can lease a car with 0.4% interest rate, Then the $30-40K I would spend on a car is better sitting in my investments earning me ~8+% instead.

I think the key is knowing your finances so you don't go nuts on buying a car above your budget.

In my case a new car+my housing wouldn't even be 50% of my personal take home income, not factoring in my wife's.

That's fine. I am certainly not judging anyone. I am just looking at it from a neutral perspective. If someone can absorb the consequences with ease, then not every decision needs to be based on its financial worth. I was just saying that it's big mistake for a lot of people. I don't even understand why it's a controversial point at all.

I currently have a bigger house than I need which is also a common financial mistake for a lot of people and i wouldn't be upset if anyone pointed out that fact. I have a credit rating of 870/900, so I am doing something right.

[Pizza]

Originally Posted by CliffFletcher

How many people would go for a long period of time with zero income? There are jobs out there - crappy, low-paying jobs. I've worked many of them. They suck. But they pay money. And you can use that money to pay for things like rent, bills, and food.

A couple of friends of mine are managers at these businesses with "crappy, low paying jobs" and consensus is among their peers in the food/retail industry is not to hire people with an O&G background.

They all know that oil is bound to bounce back and these former O&G people will leave immediately, so there's no point in wasting time hiring them

so i feel for these laid off O&G workers because not only can they not only get low paying jobs, but there's this myth like you're perpetuating that they're entitled or too lazy to settle for those jobs

[Hockeyguy15]

That's a pretty disgusting attitude for your friends and their peers to take.

I bet they willingly took money from people working in O&G, so it seems a bit hypocritical to not even consider hiring someone because they have worked in O&G in the past.

[CliffFletcher]

Originally Posted by Pizza

so i feel for these laid off O&G workers because not only can they not only get low paying jobs, but there's this myth like you're perpetuating that they're entitled or too lazy to settle for those jobs

A lot of people do feel too entitled to settle for low paying and low status jobs. That's why so many of those jobs are performed by recent immigrants. And it's not just O&G people. I've known a lot of guys in the trades who will not, under any circumstances, work for less than whatever the going rate is for their trade in good times. If they get $30/hr for commercial painting or concrete finishing, they'll go six months without work before they'll stoop to doing general labour or hanging drywall for $20.

[jayswin]

Originally Posted by Hockeyguy15

That's a pretty disgusting attitude for your friends and their peers to take.

I bet they willingly took money from people working in O&G, so it seems a bit hypocritical to not even consider hiring someone because they have worked in O&G in the past.

It's not really disgusting, it's smart on the part of non-Oil and Gas companies. It sounds harsh as there's so many people looking for work, but the reality is people employed in Oil and Gas will almost always go straight back the second they have a chance.

Again, nothing wrong with that on the part of O&G workers, but they have to understand that their intentions and career plans are crystal clear to hiring managers at lesser businesses and they have to do what's best for their business.


Candidate A: worked in retail/fast food for ten years, knows the routines, knows the pace expected, is comfortable with the atmosphere, has a life set up that is based around $12-$15hr, will stay for a long time if the job suits him/her.


Candidate B: has worked for $65-$85k for the last ten years, isn't used to the demanding, stand up pace of fast food, feels embarrassed at surving burgers, needs to get something higher paying asap to keep up with a higher earning lifestyle.

You take candidate A, it's a business decision, not personal.

[polak]

I also think a lot of people are "all in" in O&G and it's hard to get out of. If all of your experience is in O&G, significant investments are tied to O&G (housing in Calgary and company shares), and all of your network and contacts are based in O&G, you're pretty much screwed when the industry collapses like it has.

Networking is great but if its all in one industry who is going to hire you when no one in the industry is hiring?

[Pizza]

Originally Posted by jayswin

It's not really disgusting, it's smart on the part of non-Oil and Gas companies. It sounds harsh as there's so many people looking for work, but the reality is people employed in Oil and Gas will almost always go straight back the second they have a chance.

Again, nothing wrong with that on the part of O&G workers, but they have to understand that their intentions and career plans are crystal clear to hiring managers at lesser businesses and they have to do what's best for their business.


Candidate A: worked in retail/fast food for ten years, knows the routines, knows the pace expected, is comfortable with the atmosphere, has a life set up that is based around $12-$15hr, will stay for a long time if the job suits him/her.


Candidate B: has worked for $65-$85k for the last ten years, isn't used to the demanding, stand up pace of fast food, feels embarrassed at surving burgers, needs to get something higher paying asap to keep up with a higher earning lifestyle.

You take candidate A, it's a business decision, not personal.

I couldnt have said it better

Staff turn over is costly to a business and we shouldn't fault them for making decisions that would minimize the number turn over, regardless of whether the majority of their customer base is O&G or not

[Sylvanfan]

My 3 vehicles combined are 30 years old. I live in a 25 year old house that eats up 35% of my monthly take home pay. I'm still flat broke. Having a family is bloody expensive these days, and things are getting worse ever month.

Sucks to work hard and barely be above the welfare class. At least I have savings....woeful as they are.

If you have young kids and lose your job it would be brutal. Much tougher to pick up and move.

[FlamesAddiction]

Originally Posted by Pizza

I couldnt have said it better

Staff turn over is costly to a business and we shouldn't fault them for making decisions that would minimize the number turn over, regardless of whether the majority of their customer base is O&G or not

Yeah, when we moved, my wife had a heck of a time finding a job in the industry that matched her university science degree, and so she tried in retail but kept getting the over-qualified marker. They knew that as soon as something in her profession came up, she was gone. She eventually got on at Tim Horton's and Wal-mart, but higher end places wouldn't bother.

[GGG]

Originally Posted by polak

I also think a lot of people are "all in" in O&G and it's hard to get out of. If all of your experience is in O&G, significant investments are tied to O&G (housing in Calgary and company shares), and all of your network and contacts are based in O&G, you're pretty much screwed when the industry collapses like it has.

Networking is great but if its all in one industry who is going to hire you when no one in the industry is hiring?

Yep it's why I sell shares as soon as they vest and get them out of O+G. All my savings are also as little do do with O+G as possible although some of the index based stuff does have exposure there.

I'm surprised that outside of options where there is tax advantage to waiting why people leave their stock based bonuses in the company.

[Shazam]

Zero percent loan for my latest vehicle. My van was falling apart fast though so I probably didn't get the best deal I could have.

[OMG!WTF!]

Nm

[OldDutch]

Originally Posted by GGG

I'm surprised that outside of options where there is tax advantage to waiting why people leave their stock based bonuses in the company.

The old "I know a guy who worked at xyz Oil for 30 years and in 2006 the stock went from $10 to $100. He's retired in kelowna laughing"

Really just a variation on the same real estate story we all hear. People like them who knew nothing of investing got shares and are now retired. It is way easier to do that then put in the work to learn how to strategically invest.

I don't blame most as you spend so many hours at work and you come home and reading up on investment strategy is the last thing most people want to do. So they either leave it in their company stock or give it to a broker who goes on to lose it.

Most will err on the side of trusting the people they work for than learn it in their spare time.

[V]

Originally Posted by Hockeyguy15

I bet they willingly took money from people working in O&G, so it seems a bit hypocritical to not even consider hiring someone because they have worked in O&G in the past.

Well that's a different and strange slant on it. I'll take money from anyone, but I won't let just anyone work for me. Weird.

[btimbit]

Originally Posted by V

Well that's a different and strange slant on it. I'll take money from anyone, but I won't let just anyone work for me. Weird.

So true. I'm sure a few drug dealers have ate/shopped there too

[dobbles]

Originally Posted by calgaryblood

Way to throw everyone in the same category. "Like CP", what does this even mean? There were 9 total replies before you chimed in, and not all were harsh. Glad you could make a statement for an entire board with that.

We are like 80 posts in now and a vast majority of them are still just people piling on with reasons they are so good with money and everyone else is so bad. It's a theme that pops up pretty regularly and even is a CP mini-meme that often is used as a joke in other threads.



OT - I obviously have a different view as I am in the states, but I think there are lots of things that get overlooked when we are too busy trying to throw others under the bus for poor financial decisions...

One that was touched on a bit but I think is important is that renting has become such a bad option these days. Rent prices are through the roof in most larger cities and make it that much harder to save for a down payment. Sure you can always get roomates and tiny apartments, but there are significant sacrifices that are made to rent that make buying a reasonable alternative when the cost if often equivalent or lower.

Another one that I was happy to see some responses on was the ability for laid off workers to get random low laying jobs. As someone that tried that, I can say it is harder than it looks. My wife and I moved to South Carolina 6 years ago and I gave up my job so we could move and she could start our career. But because I wanted to get working and making money, I was applying for anything. I applied at grocery stores, banks, home improvement stores, etc. And I often didn't even get a call. I was college educated with many years of white collar experience. I did get a couple interviews at a bank for a teller position but the manager was worried I would leave if I found something better so he went with someone else. I ended up working at Best Buy for a few months before I was able to get on with a company as a business analyst. Things worked out for us, but the point is that sometimes jobs are hard to come by even when people are willing to go for less pay and less prestige than they are used to.

Another factor is day care. I never realized just how expensive day cares can be. I thought that it would just be in home care or independent facilities that would be high, but in our area, even the large scale 'factory' places are costly. We currently pay $200/week for our son to be in a daycare that is not even that great. When we have our second child in the coming weeks, we are actually considering switching to an in home nanny because the cost difference for day care is similar. Our day care expenses for 2 children is about to eclipse our mortgage as the largest single monthly expense. While lower income folks often get subsidized rates, it still makes any situation with children much more complicated. Especially if you are talking about the lower wage jobs that people are supposed to be taking to make ends meet.

Anywho, I've rambled too long. I look forward to seeing what others think.

[chemgear]

Originally Posted by dobbles

We are like 80 posts in now and a vast majority of them are still just people piling on with reasons they are so good with money and everyone else is so bad. It's a theme that pops up pretty regularly and even is a CP mini-meme that often is used as a joke in other threads.

I'd say it's just people in general.

https://en.wikipedia.org/wiki/Illusory_superiority