Canada’s growing wealth under siege by rising debt

“We may never agree on music, but Canada’s Baby Boomers and Millennials have more in common than we might think. Recent data from Statistics Canada shows we’re riding a wave of unprecedented fortune, with the median net worth of Canadian families up 44.5 per cent from 2005 to $243,800 in 2012. That’s an 80 per cent jump over the 1999 median of $137,000, adjusted for inflation. Much of the increase is due to our frothy housing market as principal residences were found to be the largest asset among Canadians in 2012, followed by private pension assets, which include Registered Retirement Saving Plans (RRSPs) and company pensions.” Darah Hansen writes in an article for Yahoo Finance. Hansen continues, ” Hold the celebration, though, because we’re also spending like never before. Between sky-rocketing mortgages, car loans, lines of credit and credit cards, Canadians, young and old, managed to rack up $1.3 trillion in debt in 2012, putting our collective wealth under siege by growing debt. Kim Thompson, senior vice president of advisory services with the national wealth-management firm Credential Financial, has been following this trend closely and believes the statistics tell an interesting story about who we are and what we think about money. Notably, the data suggests a shift in our comfort levels towards debt from one generation to the next, driven, in part, by low interest rates that ‘trick’ us into thinking we can afford to consume more than we actually can or should.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

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