The main problem the majority of us have is that of personal debt. We need to focus on eliminating debt that prevents us from creating that comfortable nest egg that will see us through to the end of our retirement.
People are given exposure to the problem that they are facing even though they may not be aware of it. The cost of small mortgage in Canada, for example $200,000 at 7% paid with a normal bank schedule will cost $220,241 in interest, for a total cost of $420,241. It is worse than this. You would have to earn $700,402 and pay taxes in order to have the money to pay off the $200,000 mortgage. The sad joke here is that many think this is a pretty good deal because when they look at their credit card debt, they are paying 19.99%, and if they need a cash advance, because much of their paycheck went to the mortgage, they will pay a startling 22.99%. No wonder our credit card company sends me blank cheques every month, inviting me to use the funds to travel or renovate using their money. You would too if you thought I would pay you a rate of return of all most 23%.
Some statistics you may find of interest. 84% of Canadians consider being debt-free a high financial priority (33% consider it to be their TOP financial priority). So how have we as Canadians done with our debt elimination? 44% failed to reduce their debt over the past 12 months, 27% have more debt than they did a year ago. 65% did not shop around when their mortgage (their largest debt] came up for renewal and simply stayed with their current lender, (almost a third simply accepted the first offer that was presented to them). 43% have credit card debt that they don’t be paid in full each month. 65% have two or more separate debts outstanding and could benefit from consolidating at a lower rate. In spite of these surpising statistics a recent poll conducted by Harris/Dexima indicated that the average Canadian expects to be debt free by age 63. Would you like to be part of that group yourself?
If you found yourself reflected in any of these statistics please look at reviewing your financial situation and making debt elimination your first priority. Start with your mortgage and investigate the possibility of refinancing at better rates. There are mortgage brokers available will be pleased to give you their assessment and advice to reduce your costs. Debt is a big stumbling block toward the creation of wealth, don’t let it be yours.
If you are interested in restructuring your debt situation we have mortgage brokers affiliated with our company and we will be pleased to help you make those important connections. Contact us at Ayoba@telus.net or our office number at 604-589-4884.