Many Cdns. rely on lotto winnings, inheritance for financial plans
You know, throughout the recession and this long, snarled recovery period much of the world’s still in, Canadians have kind of floated above the fray, our global reputation preceding us.
After all, tight banking regulations ensured our economic freefall wasn’t quite as severe as that of others, and, hey, look, they even took one of our top finance minds to be the world’s bank regulator.
Perhaps consumers, too, began to walk with a swagger. With recent news that Canadian household debt growth is at a ten year low, is there any doubting our fiscal responsibility?
Wellllll … hold on a tick. At the risk of a wrist injury from patting ourselves on the back, here’s a sobering stat (or two) sure to crash Canada’s cash conservatism to the ground.
As a point of fact, when you lift the hood on Canadian consumer savings rates, smoke looks like its starting to billow from the engine.
*Bing: Lotto winners that went broke
While household debt growth has slowed, household debt remains high. According to Stats Canada’s latest numbers, Canadian household credit market debt still stands at 163 per cent of income, about the level, the Globe and Mail notes, in the U.S. before the housing crash of ’07-’08.
But here’s the doozy, the rotten icing on the overcooked cake.
According to a new study by Credit Canada Debt Solutions and Capital One Canada, about one-third of Canadians admit their financial plans include relying on cash won in a lottery, or handed out in an inheritance.
Yes, 18 per cent of Canadians said they believe winning a lottery will contribute to their future financial picture, while a further ten per cent said they’re relying on an inheritance payment to help out.
“It’s troubling to see so many Canadians putting more trust in the lottery than sound financial planning,” said Laurie Campbell, Credit Canada Debt Solutions CEO, abstaining from adding, “You morons.”
Truly, this is a tough one to swallow, and perhaps it paints a picture of Canadian consumers that undoes the national profile we’ve earned on the global scale.
Seems like we need a distraction. Something to throw the world off the scent. Oh! Here’s one. See, we’re not the dumb ones. Right?
Posted by: Dave Brown | Nov 9, 2021 1:24:04 PM
Is this a case of looking for a silver lining, where some of the individual household responsibility is being shuffled into public debt?
www.huffingtonpost.ca/2011/10/03/canada-debt-cfib-road-to-greece_n_992480.html
Although I would have thought the opposite, it is interesting to observe the context of how debt has manifested itself within the Canadian context.
Wealth has typically been created by identifying an asset (either physical or technological) or an inefficiency and marketing or addressing the inefficiency in the marketplace. Increasing size of government and bureaucracy, only serve to increase inefficiency.
It might be arguably better to see public debt reduced and household debt increased. Milton Friedman would argue that a person usually spends their own money better than an institution would spend taxpayers' money.
Posted by: Fred T | Nov 10, 2021 1:08:45 PM
People who are waiting for Lottery wins will be waiting a hell'va long time cause as far as I'm concerned the Government has their fingers in the pot......what I mean....is this the friggin Lottery is FIXED and everyone is starting to beleive it. I said my piece......
Posted by: Gordon Finlayson | Nov 10, 2021 2:13:20 PM
In response to Laurie Campbell's comment about Canadians putting more faith in lotteries than sound financial planning, I am guilty as charged because I have no idea of how to plan my finances. This is a subject that has always eluded me, and I don't know where to turn for advice.
Posted by: brian | Nov 10, 2021 4:51:56 PM
i won the lottery, ten dollars a week is a wise investment,my mutual funds arent even worth what i paid for them,what kind of crap investment is that? buy that ticket to your dreams!!!!
Posted by: Jim | Nov 10, 2021 10:54:27 PM
It's a dream. Could happen but the odds are against it. Investments are for the rich. At today's rates of return you are lucky to break even. Need big dollars to make big money in the markets, and , you have to be able to afford to lose. Really tired of articles that make it look like Canadians didn't try to save for retirement. Not everyone had the job and personal situation to support an investment strategy. Nice that some did, but most will work until they die.
Posted by: SP | Nov 11, 2021 7:52:24 AM
Well when one considers that the bottom 40% of the US population combined has only 0.3% of the wealth and the top 20% has nearly 90% of the wealth AND that Canada isn't vastly different from the USA, this article is hardly surprising.
The question for our Dear Leaders is this: "What happens when the bulk of the baby boomers come to retire and discover that the people who control the assets decide to 'de-fund' the few remaining pension plans?"
Nortel, etc are just warnings.
There aren't many retiree's yet in Canada and a flood of new third world immigrants aren't likely to keep the future retiree's living 'in the style to which they've become accustomed'.
Should make for interesting times.
Posted by: Paule | Nov 11, 2021 1:42:37 PM
Pretty much all the savings and or investment oportunities, favour the bankers, investment brokers while you make dick shit. 1.5% GICs you have to commit to 5 yearfixed rates. Savings accounts forget it. Those of us who have saved are being paid nothing, the intrest rate held on the floor, what, to pay for the trillions of $ the big shot bankers stole. Its bad enough they were paid 6 million a year, but they had to have bonus of 3 times that, then when they got firered they got another 20 million in bonuses, then they walked accross the street, and started all over again. Front loaded commissions, rear loaded commissions, management fees, bank service charges on everything, brokers collect BMW's. We go to 4437.