An earnest request, if you consider it relevant, if I may

joyfulguyNovember 30, 2013

In recent years, few people in our society have enjoyed anything but minimal increases in employment earnings, if any.

But the cost of living has continued to increase.

The official rate is something in the neighbourhood of 2%... but if you've visited a grocery store or various other retail outlets recently, you'll be inclined to doubt the veracity of the claim.

In recent years many people, not wanting to curtail their earlier lifestyle, or for whatever reason, have run up substantial debts.

Quite a number of them have been on credit cards ... and if one asks quite a number of the users what rates of interest they charge, apart from major penalties for late or missed payments ... many don't know, or their knowledge is a bit foggy.

On regular cards, the usual rate is around 18% ... and most stores who issue cards charge more like about 28%.

Recently, payday loan "stores" have been popping up in this area like mushrooms.

Most of them charge about $40.00 for a loan of $400.00 for about two weeks.

Please - DON"T USE THEM!

And if you owe amounts on your so-called "credit" cards: the minute before you use one for the first time you have no debt (there, at least), and the minute after you use it - you have debt.

A so-called "credit" card is really a "debt" card!

If you carry balances owing on your "credit" card from month to month ... that means that you pay next month (or in 6 months) for eating that you did last month, doesn't it?

If you want to eat now ... and pay later ... doesn't that mean that you're getting no benefit now ... from part of the work that you're doing now? That is, part of the time that you're working ... you're working for nothing, doesn't it?

Here's a serious question that I hope that you'll ask yourself ... do you expect that substantial raises in pay will be forthcoming in the next few years, in our neck of the woods?

I'm pretty sure that your answer will be, for most of us - NO!

And here's another: do you expect that prices will level out, that actual inflation will get really low, anytime soon:?

In which case ... please make a substantial effort to pay off your consumer loans, with the most effort given toward paying the ones with the highest fees first.

And when you have that accomplished ... please carry on that effort, to do as most personal financial advisors have counselled for years, to build up a substantial financial cushion, so that your hair doesn't stand on end (or you more or less sweat blood) when a financial emergency arises.

Please build a 3 - 6 month, and in current volatile economic conditions, more like 9 months' to a year's income as a savings, or emergency fund.

Because with costs going up ... and wages showing little increase ... if we think that we're having a hard time making ends meet now ... I'm pretty sure that it isn't going to get easier, any time soon.

If your prognosis of our current economic situation in our part of the world is less onerous ... I hope that you're right.

But I have a major concern that you're not.

Good wishes for you and yours as you look forward to Christmas, if that celebration is important to you, and to all of you for good things in the New Year.

ole joyful ... a personal financial advisor who, selling no financial products, had no conflict of interest ...
... and who celebrated Thanksgiving a month and a half ago - before the snow

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Very good post.

Since 2008 a number of people lost their jobs and started living on credit cards "to tide us over" until they got another job. But the new job never happened, and they got in over their heads.

And we had record numbers of personal bankruptcies from 2009 to 2012.

As far as cost of living goes, I have no idea why food and fuel are NOT included in the calculations. As an example, chicken has reached an all time high in grocery stores due to the droughts last year.

But according to the government, everything's just hunky dory.

    Bookmark   December 1, 2013 at 7:24AM
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I am Canadian. I do not expect an economic turnaround any time soon - and it is a bad time to be near retirement age, as my husband is. We do use credit cards and pay them monthly in full. With our type of Amex card you have to do that anyway. Admittedly we do have a fee paying card linked to Aeroplan that we will switch to a no fee card when my husband retires - little travel so pointless. I do know the interest rates charged by our credit card companies etc. I agree about the cost of living. In January Toronto water rates will go up another 9% (for the second time). Property taxes are going up again - and we just live in a small bungalow. Even the garbage bin cost is going up. Then there are the electric and natural gas rates - plus the cost of gas and insurance for cars. House and car insurance rates have also gone up. My husband's medical plan at the office has just changed - coverage has been greatly reduced as has his life insurance - both due to the plan changes and his approaching 65 birthday. He is going to work until age 67, all going well. And, we have a dog.....

    Bookmark   December 1, 2013 at 3:11PM
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Forgot to mention the price of food in Toronto, Ont. It is very high. Meat, dairy etc. Yikes.

    Bookmark   December 1, 2013 at 3:13PM
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Hi eccentric,

Here south-west of London, as well.

Here's a suggestion.

Shouldn't the Liberal Party of Ontario cough up, say, a quarter to maybe a third of the cost of relocating those new electrical generating stations that were planned for Etobicoke and Mississauga?

Also, when I get my power bill, almost half of it, way more than the cost of generation, goes for "Delivery".

It costs a great deal to expand the power grid to carry that extra power from Sarnia and ... where, Smiths Falls? to Toronto, and we all know that there's line loss as the power is carried over distance ...

... so don't you figure it to be somewhat fair for the good citizens of Toronto to agree to a surcharge on their power bill, since they don't want it generated in their back yard, of, say 10% on the delivery portion for, what, something like the next 35 years?

Speaking of which ... since we haven't built a major new generating plant in Ontario for the past 35 years or so ... don't you figure that there should be money in the till to pay for a major portion of building a new one ... rather than our being required to pay that "debt retirement charge" that's been on our power bill for ... how many years has it been?

ole joyfuelled ... who lives within two miles of Toronto's new garbage dump

    Bookmark   December 3, 2013 at 5:07PM
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Hi, I don't disagree about the surcharge - but I don't want to have to pay it! Our bill is largely "delivery" as well as is our natural gas bill and I have the heat pumping. And we were one of the 10,000 Toronto residents who were selected for the smart meter trial program so while other people were burning every light in their homes and using every appliance at normal rates we were charged the variable rates. I don't think anyone should have had to pay the smart meter rates until everyone did. Same with the garbage bins - once again we were the first to receive them in Toronto - so were restricted as to what we could put out - whereas people on the other side of Yonge St. were putting out half of their house contents it often seemed (and no, we don't put out that much - but still). Then of course both of us have been called for jury duty - last time for me it was for a 4 month first degree murder trial. I know a lot of people who have never been called - and others who have gotten out of it for the most stupid of reasons. So I figure with just the two of us we are paying our share. Then there is the couple with hardly any health issues that can be treated who must pay for everyone elses' 12 prescriptions (the average - no kidding). Funny you should mention electricity though. You may have heard on the news just the other night that it is expect that hydro bills will go up 33% over the next 2 - 3 years. Apparently people are going to be allowed to purchase energy efficient windows and pay for them via their hydro bills - they sure had better be paying for ALL of their own windows - and what happens if they sell? More money for the real estate lawyer for sure. A disaster waiting to happen, I can see it now. I don't know what I am going to do next election - I am somewhat of an independent although there is one party I will absolutely never vote for - and the one I would have voted for has a leader that will cost them the election. Then of course there will be the Toronto elections - particularly for the mayor. I do have a candidate in mind unless he/she is endorsed by our ward Councillor and then it will be back to the drawing board.

Re groceries I can't believe how much cheaper dairy is in the U.S. and meat. I read on this forum how much (little) people are paying for dairy and meat and I can't believe it. Of course, the dog gets only the best....And I did buy a $50 million Lotto max ticket for this week - I do not expect to win. Great that they tracked that woman down who won and had lost her ticket. It is a very good thing that she paid via her credit card and was the only person who had a cc purchase of $16 that day. I would be really ticked off to have 6 numbers but not the bonus for the 7th and only receive $115,000. But someone has to win, so why not me (or my dog, who might share). Should I win tomorrow night it will be a very long weekend waiting for 9:00 a.m. Mon. morning. I would have our banker come and take the deposit at the lotto office. A woman who won $12 million several years ago did exactly that. She told her bank that if they wanted the money to come and get it. They made the right decision. Oh, to be in that position.

    Bookmark   December 5, 2013 at 1:33PM
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If I were to win, or otherwise come into, 12 million ... or even 1 million ...

... it wouldn't be going into any bank!

Unless for a couple of days while I made plans to use it elsewhere.

Banks lend out each dollar that I lend them (and about 8 - 10 - a dozen other dollars, beside) to others ...

... and make more on it than I do!

I like my money working harder for me than for someone else.

When I was younger, I had brains and hands at work to produce an income.

During those years, I put brain to work to learn how to manage money (and tax issues) reasonably effectively.

Now that I'm not working with my hands and brain to bring in pay regularly for myself ... my hands aren't working any more (except to operate a garden) but my brain is still at work to produce what I expect to be a (usually) increasing annual income ... and, most years, to grow themselves in number as they do so.

When the dollars that I've put to work for me bring home increasing numbers of others like themselves, month by month and year by year, that suits me well.

And when the number of dollars that I've invested grows, year by year, that suits me fine, as well ... even though they shrink some, from time to time.

Better to run out of days ... before one runs out of dollars!

And these days, when one retires, if at 65 ... one could well have another 35 years to live, which includes putting a roof over one`s head, in some parts of the world, heating the space under it ... and fuelling one`s self by mouth. With one`s years of retirement being almost as many as were one`s working years.

But I`ll not be winning any lotteries: as a personal financial consultant for a number of years, I call buying those tickets a bad investment.

ole joyful

    Bookmark   December 13, 2013 at 7:07PM
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