I don’t mean to scare or discourage you, but it is important for everyone to be well informed of the hard times we will have ahead in the New Year. The best you and anyone else can do is be informed and prepared. However, I am in no way whatsoever a psychic – but it doesn’t mean this makes no sense.
Here is an article you can read as a reference.
A good friend of mine made a good observation on an article comment, and I quote:
Canada Today:
Buying things we don’t need…
With money we don’t have…
To impress people we don’t know…
To fill a void which won’t go away…
As you may already know, the world is currently floating on so much debt, that it has hampered economies such as Greece and Italy, but what you don’t know is that countries such as the United States and Canada are no better off than they are. The United States are $14 trillion+ in debt and Canada has just surpassed their $1 trillion dollar mark (Federal and Provincial debt accumulated). What does this mean for all of us? This means we will be taking on this debt. With debt, there is interest (money paid as a fee for borrowing), and it varies according to your credit rating (how good you are at paying your bills). Take this for example: If you were never good at paying your credit card bills, why should I keep lending you more money? Well the solution to that is to actually charge you more interest because I may never know if my money will be coming back. This is the problem with accumulated debt. It gets to a point where it is impossible to pay back the interest and the principal (the amount you borrowed from me).
It’s a path that many of our countries are heading into. A country only produces so much money every year. By overspending and borrowing, you put yourself in a bigger and bigger hole… to a point of no return. So what’s the solution? Stop borrowing over your means to spend. Especially on stuff that you don’t need. Be responsible with your mortgage and credit cards. If you can’t afford it, don’t buy it! This is going to be especially important when the government finally realizes this and starts their austerity measures by cutting everything from jobs to services. Times will be bad for every single one of us, so it’s important that you SAVE and PRODUCE more for the economy in order for us to repay our debts and afford to live while we repay our debts. Turn off the heat and bring out the sleeping bags, it’s time to live like a soldier!
What’s even worse for us is that we have many, many people who do not understand this concept about how the monetary and economic systems work. This poses a problem to all of us because if you are not informed about your personal contribution to our economic debt, you hurt every single one of us in the end. I personally do not have a degree in Business, Economics, Finance, Accounting, etc. I have a degree in the Arts and still understand this concept. It’s Finance 101. It’s knowledge that you need to know for your own personal benefit, and for the long-term benefit of our society’s way of life.
When you see low interest (borrowing) rates to borrow money for the new house/car do you think of it as an opportunity or a burden?
If you saw that as an opportunity, you are contributing to the problem if you cannot pay it off. – Exercise responsibility.
If you saw that as a burden, then you’re right. If you needed to borrow money in the first place for something, it means you cannot afford it. Don’t let your desire for consumption overtake your rational financial decisions.
There needs to be a balance of Saving & Producing versus Spending & Borrowing. We have severely unbalanced our financial system. It is up to our generation to be informed and know that we will be living a hard life of repayment. We will be paying more for less, there will be hard times ahead. Just know why it’s happening. Hope for the best but be prepared for the worst.
FulPhilled 