53% of Canadians on the brink of insolvency

So here's something I find confusing. Occasionally when I go back to work at the lawn care company, which is my fallback in between jobs I usually end up in the middle income neighborhood Huntclub in Ottawa. Driving through there where the newest houses are I will see everyone has a brand new car maybe two each worth 75K and the house 3 years ago would have been worth 300K.

So is everyone making 200K +? I can't afford all that and I have been in the upper 10% for 15 years now obviously I think to myself I must be doing something wrong. It's only been the last 3 years that I even started spending money on myself and just the past two years I started doing upgrades to my house as I had to save up the cash first as I didn't want to take out any loans.

I have 14K more to do on the house reface kitchen ($6000), new flooring (do myself $2000), 3 more windows ($2000), parge foundation do myself ($500), and new roof for garage (do myself $2000), two new doors (do myself $1000).
I have the cash but waiting until my contract is confirmed in June. I can't imagine going into more debt unless it is actually necessary. The only time I take on debt was mostly when I was young in inexperienced such as a car which I need to get to work, but I buy mostly used cars, a mortgage as you need a house. I would never borrow to go on a trip anyplace.

I have money set aside for buying when people start selling because they are in trouble, but nothing seems to be happening yet.

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Originally Posted by MikePal

Yea when you head into solvency because of poor financial decisions, those kind of toys get sold first...HaHa.

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Originally Posted by MikePal

Yea when you head into solvency because of poor financial decisions, those kind of toys get sold first...HaHa.

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I am starting to see the people complaining about their tax bill - CERB recipients. I have family in Windsor that are pissing and moaning about their poor kids tax bill (eye roll). I asked my sister-in-law if they saved any of it because they knew they were going to be taxed. I then asked how can someone working retail, and a security guard making close to minimum wage still living at home spend their CERB cheque on? What changed in their lifestyle because getting CERB was like an instant raise of about 100% plus.

This will be a great lesson on adulting 101.

Re-Real Estate prices.
I am not 100% sure i can present fully the theory i am to describe,and I am not 100% sold on it either.
Yet-Interesting and makes good sense.

Increasing Real Estate prices works greatly for the Government and Pension Funds(think RRSP)
Think growing number of Canadians entering retirement.
We all are chalked up to receive so much money/ month.
More takers-less money to share.

How to increase the $ amount in those Funds? Increase value of the "things"they invested into.
Real Estate is one of them.
The more the Fund has $,the more chances they will be able make their obligations.

Thus- (i can be wrong)this surge works for just about everyone(for now)
Except the New Home buyers. But hey, they are not the main focus(this time).
Plus-the bigger the Mortgage-the more to pay interest-the longer to pay interest-Banks must love it.
Likely it will be in no ones interest to stop this cycle.
Slow it down -yes.To a degree.

How this will end-i do not know,but more then once in our life Big Factors behind the curtain decided our fate.............

as Pierre Poilievre pointed out:

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Banks are warning of a housing bubble, as people take on houses & mortgages they can't afford
So why do these same banks lend mortgages that might never be repaid?

Because government, not the banks, take the losses, with over $500B in CMHC loan loss insurance.

Banks get profit, taxpayers get risk & mortgage loans debtonate.

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Originally Posted by MikePal

as Pierre Poilievre pointed out:

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Yes, I also listened to the video. Looks like if the bubble bursts taxpayers (CMHC) will be on the hook for the mortgage defaults exceeding the 16 billion dollar slush fund.

Here's the link if you haven't seen it :

https://www.facebook.com/PierrePoili...58213349752379

The comments below the video are as educational !!

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Originally Posted by greatwhite

Driving through there where the newest houses are I will see everyone has a brand new car maybe two each worth 75K and the house 3 years ago would have been worth 300K.

So is everyone making 200K +? I can't afford all that and I have been in the upper 10% for 15 years now obviously I think to myself I must be doing something wrong. It's only been the last 3 years that I even started spending money on myself and just the past two years I started doing upgrades to my house as I had to save up the cash first as I didn't want to take out any loans.

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The folks may be public service employees working from the "bottomless pit". They've also been using SLOC on their homes. They likely bought @ $400K (give or take). With RE prices going insane over the last coupe of years,the SLOC qualification allow them to increase the debt to equity increasing the amount of the SLOC. That allows them to drive real hard bargains for car loans or use the SLOC to pay for the vehicle,outright. Trouble arises when mortgage renewal time rolls around. Banks will have tightened financing rules and homeowners can find themselves in deep,deep doo-doo.