CASH IS KING – household debts

CASH IS KING

not only that, it also is QUEEN and all the other assorted royals. In other words, if forced into a situation of whether to use your own cash for a necessary cost (one that cannot be avoided) or to instead take on a loan from a Bank, choose using your own cash. According to this, and compared to the statistics on average Canadian household debt loads [ https://www.cbc.ca/news/business/statistics-canada-debt-1.5609510 ], I am not only KING but in this case also QUEEN. No mortgage (thanks, Bank, but no thanks), no vehicle, no loan for anything.

Example: An older condominium building requires a number of substantial renovation projects, amounting to over one million dollars. Each condo owner must contribute (in six monthly installments) a certain amount of cash. Due and payable at the start of each month. If not paid, the strata company (who manages our property) takes 10% interest on what is owed and unpaid. Bad news for all those whose condominiums are already mortgaged (maybe, to the hilt), or those who simply do not have the needed cash when due. Mostly, those larger renovation projects draw out over a long period, during which Banks are all too happy to offer loans. It sounds nice and enticing, especially when loan rates are low. Even if the Bank of Canada rate is only 2.45%, the mortgage rates are around 4% (or higher). However, since our Canadian Banking system is conservative and well regulated, mortgages must be secured. Means, a debt must be registered against a property title.

Imagine I only need $10,000. I am still saddled with the mortgage/loan registration costs for about at least $500 – legal, document, registration costs. I refused the Bank offer of a (short-term) loan, even if the interest rates were very attractive. Why ? because of the mortgage document and registration costs (to register a loan and de-register again); these costs are not refunded.

Instead, I am using all my CASH savings for this enormous building renovation project. Lucky, I had some savings. How easy it is to fall into the debt trap.

Likewise, what should be paid off first ? when money is scarce. The credit card ! In fact, consumers who cannot afford a credit card, should not have one. Food for Thought: Most household debts can be attributed to the rigorous commercial advertising for (needed, or not needed) products, especially automobiles.

Easy Mortgage Money

Nothing easier than that. Most big Banks are running after you and literally glue themselves to your behind in order to shove a mortgage (or loan) down your gully. Why ? You don’t even have to be a psychologist to understand the common human psyche. Greed, greed, greed. Most people want to have what the neighbor has, and they want to have more of everything. For that, one needs money. Although there are now a larger number of millionaires walking the streets, the basic assumption still applies: “Most consumers do not have enough money for what they want.” Even if some guy had a million, how on earth can anybody expect that poor little bitch to actually live on a lousy million ? No, no. He wants two million, at least. That is where the Banks come in. Please, Mister (being already deep in debt) take out a loan or a mortgage, we offer fab rates – today’s special – like under 3% variable, not bad. At the same time the Banks do not give a rat’s ass if a person can actually pay a loan. They know, sooner or later payments are due and the borrower is up to their eye balls in debt. Cannot pay. Take out another loan to cover the first loan. Why not ? Or loose whatever you bought for that loan. Goes back to the Banks. Debt, debt, debt. Nobody seems to care, because life is short and borrowers want to live to the fullest – WITH OTHER PEOPLE’S MONEY. Man, am I glad. I am the richest person in the world. I don’t have debts. Even if Mr. Google – when opening my Gmail – offers me dozens of different mortgages (as ‘side ads’), based on my e-mail (sent or received) which some of them may be from somebody I talk to about “what my plans are” blah, blah, blah – about HEH ! I may be interested in some mortgage. There you have it: Not interested in what the Banks want to shove down MY gully !