Canadian Personal Finance Blog

A household’s debt as a percentage of it’s net worth keeps dropping. What does this mean? It means we are worth more and/or our debt is worth less as a percentage of what we own and what our total net worth is. Who cares, I hear you ask? I do, for one, because it means I am worth more, my debt load is not dropping but the things I own and my worth is increasing as well. In my case my net worth mostly is increasing because the house I am living in, is increasing in it’s value, and to a smaller extent the investments I have are also appreciating.

The caveat to keep in mind is:

Households continued to build up mortgage and consumer credit debt. Household debt continued to outpace growth in personal disposable income. However, the gains in both financial and non-financial assets in the first quarter reduced the ratio of household debt to net worth to 17.5%, down from 17.6% in the fourth.

Which means on average most Canadian households debt load is INCREASING, but the value of our assets is outstripping this. Our debt load increase is, however, out running our personal disposable income (how much money we have left to spend). This is something to keep in mind, debt is a dangerous mistress (or master), and the sooner you dispose of their demands, the better!

Another week passes financially, and I don’t have a set theme for this Friday, so here are some things to think about from this week.

• When is Tax Freedom! day for you ? It’s a synthetic date, but it still scares me how long into the year I have to work, to “break even” with my major creditor (i.e. the Government).
• The Canadian Capitalist talked about Market Timing where basically if you knew when to sell stocks you’d be much richer. My opinion of the concept is it is wishful thinking, if I knew winning lottery ticket numbers, I wouldn’t have to buy stocks! Well written article.
• Off Topic, Air Canada will ban pets traveling on passenger flights as of July 15th, which is interesting. You’ll have to ship Fido via FREIGHT if you want him to go to Vegas with you. Not a great PR move, but maybe it is such a headache for the system, they may be helping themselves. This Canadian No Fly list is getting nasty, now they aren’t letting Fido on the plane!
• Telus BCE merger talks continue as well, and it drives the BCE share price over $40.00, Thank You.
• Alberta’s provincial government posted an $8.5B Surplus (they earned that much more than they spent). Wow! How do I buy stock in them?
• Google is getting into the Hybrid Car Business? Well their philanthropic side of things are, which is thought provoking. Google keeps trying to widen their scope, what’s next? The Google Bank?
• How scary is the iPhone launch day to retailers? 2000 more security guards for one thing!

Interesting Week Postings

• May Inflation Steady at 2.2%
• Ronco goes for bankruptcy