Are you prepared for Bank Of Canada Interest Rate Increase?

For the last week or so, one of the hottest item in the finance section of Canadian news has to be this: Anticipation of Bank Of Canada announcing officially that the era of low interest rate is over!

Headlines read, for example :

Be prepared for Bank of Canada to raise interest rates

GDP is rising and the bank seems to feel it will continue to do so, despite weak oil prices and trade
uncertainty with the U.S.  – Toronto Star

Interest rates are about to go up in Canada — no, for real this time

Bank of Canada may hike interest rate for 1st time in 7 years next week  –   CBC

 

It has been 7 years that the interest rate in Canada has been kept low. This has somewhat become the ‘new normal’ for many household.

Spending habits, risk tolerance have been mentally adjusted for the low interest rate to stay. Just look at the increase in debt load of the average Canadian will show that this mentality has settled in.

So, the more important and pressing issue is this – what happens when the Interest rate is raised.

The news networks have also touch on this issues:

House prices and debt loads a growing concern, Bank of Canada says

CBC News

 

For you and me, who now has to shoulder the reality of higher interest rate, it means less money to take home and more to the bank. This amount can be considerable.

What if you can find a way to pay down debts faster? The faster you pay down means paying less to banks and borrowing institutions and more money in your pocket.

However, most of us feel the pinch of not being able to maintain the current standard of spending(living?). We want to keep the status quo for our lifestyle. For some, it is already cut to the bare bones just to survive. For some, job security can even be an continuous issue to content with.

What if you can pay down your debts faster – by doing what the banks do and not what the banks tell you to do? Yes, by turning the game on the banks.

Do you know that there are algorithms for strategic payment (amount and timing) that can work to your advantage without changing your current lifestyle?

Actually there is a system that can do that – and even more.

If you will like to learn about this system, just fill your contact information and we can get in touch with you to run through the numbers and see if this system works for you.

 

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What’s The Cost Of Living In Your City?

Yesterday (April 6, 2017), we were at a GenY Entreprenuer Seminar in Markham, Toronto. (We love going to GenY events! Lots of energy, fresh ideas, never boring 😉 )

What caught my attention when they talked about what the picture looks like concerning the cost of living in Toronto. It really drives home many issues that comes to mind.

But, let’s first jump in and see what this picture looks like.

We wanted to double-check with other evaluation of the picture and we found the following after some quick search.

The variation is expected because it depends on the basket of items used to determine the cost of living, the lifestyle etc.

Notably, cost like mortgages and loan financing is totally excluded from these estimates. And we know very well that most people are saddled with this category of financial commitment to some degree.

Nevertheless, it drives home the message that it is quite some financial discipline is required to earn and make sure to make ends meet for the average person living in the modern economy.

This segment of the Entrepreneurship Seminar also raise some questions:

  • What does it take to be able to bring in the income to sustain the required standard of living? That is, the amount over and above the cost of living, so that one will not dip into negative income
  • With the quality of job falling into temp and contract, it takes discipline to set aside buffer for period of unemployment or under-employent
  • How do one manage to earn, save and pay off mortgage and loans
  • Is it necessary to work for a side or Plan-B income stream that can generate a good source of on-going revenue

Perhaps you can think of even more questions!

What are your thoughts?