Half of Americans are poor, have no savings

[Occasionally]

Finance really should be taught throughout elementary and high school. Why isn't it?

The curriculum needs and overhaul.

Agreed.

Schools have no problem forcing kids to learn quadratic equations (which almost nobody uses), or some Shakespeare play from hundreds of years ago (fictitious stories anyone can read at any time) yet something basic like life skills (budgeting) is not. They will teach kids reading, math and writing skills, but something just as important such as finances they don't. That sure makes sense.

You'd think budgeting would be linked to math skills... learn math skills first, then apply to finances.

 

[glamphotographer]

If Kevin O'Leary was PM, finance would be taught in schools. He expressed openly how it would benefit kids and the future of Canada, if they were taught finance at an early age. There is some good in Kevin after all.

 

[Occasionally]

Credit cards are not evil like everyone makes them out to be.
I have several that offer me no annual fee, free out of country health insurance, free car rental insurance, free life insurance and i get to purchase whatever i want and not have to pay for 3-4 weeks. On top of that i get 2% cash back every year around christmas on everything that i spend with no limits. If that isn't enough they gave me 200$ just to accept their card. I love credit card companies. They're literally giving me money for free every month and i've never given them a single penny in interest.

Credit cards are fantastic. Who wants to be forced to go to the bank, take out $100s of dollars every week to buy things in cash like it's 1950? Nobody. Next year, I'm going to buy a 4k TV. They go for around $1,500 now. Without a credit card, I'm suppose to go to the bank, take out a stack of bills and hand it to the cashier? lol

Problem is, people have no control and max out their credit cards like idiots.

I have no annual fee, cash back cards myself. Fantastic. They pay me back 1-2% every year for doing nothing except use their card.

The point of credit cards AND mortgages is so people aren't living on the street trying to save cash to buys things outright. Mortgages can be viewed as no different than credit cards, since people are borrowing.... and in the $100,000s and $100,000s.

What people don't know (or are too lazy), is that if someone is in a cash crunch and needs to go into debt and pay interest, why use a credit card? Every bank will hand out lines of credit, which is at prime + 1-4% depending on your credit rating. Some people can borrow at prime which is maybe... 3%? So borrow $5,000 line of credit at maybe 5% interest instead of paying VISA $5,000 at 19.99%.

Again, people are just too dumb or lazy to look for deals.

 

[Occasionally]

Those baby boomers bought their houses 30 - 40 years ago, not 5 - 10 years ago. They've made a killing!

I've never understood why it would be difficult to retire if you have a mortgage free home or investments. Move to a warmer climate with a cheap standard of living like Ecuador and live out the rest of your days in bliss.

I'm not even close to retirement age and I think about dipping out of the Canadian rat race all the time. Why do I insist on staying in this frigid expensive place when I can sell off everything and live like a king elsewhere? Right now it's just the promise that I can sock away more money before calling it quits.

Agreed.

Anyone who bought a home even 10 years ago is making a killing. All the baby boomers who bought a home for $100-150k decades ago probably have homes worth $1M now.

House rich (equity) is just as valuable as cash. It's just that it's not accessible till you sell and cash out.

Some people will take those gains and move to a smaller or cheaper part of town (or country), bank the savings and sit on a beach sipping margaritas the rest of their life. However, some people will continue the rat race of appreciating home values, sell their home and then sink it all into a more expensive place, so their cash flow is net zero. It will plow back into paper gains.

As for me, when I retire, I'm going to move to a crappier, cheaper, more suburban place in town. I like the GTA, my friends and family are here. But I have no problem sacrificing a centrally located place to bank gains by moving to the outskirts of town. It's all about lifestyle and how much someone wants to give back as opposed to trying to keep up with the Jones and have it all.

 

[Occasionally]

They might only have $1k in the bank but many also own their home, have investments, and pensions. So the $1k is misleading.

Remember the stories years ago about retirees eating pet food to survive. It was myth.

Yeah, money in the bank means little. I typically only carry $3,000-4,000 in my chequing account at all times. The second it gets higher, I transfer it to savings or investment accounts. If I'm heavy into investments, my chequing/savings accounts might have $3,000. But my investment portfolio is 6 digits.

The key metric (if it's actually calculated somewhere), is net asset value. Let's say asset value of people in different age brackets starting form maybe 20 years old and older, since trying to do it for kids is pointless.

So lets say in the 30-40 bracket, people are put into different buckets from big gainer to big debtor. Mortgages should be included since that is a person's biggest financial impact in life. The big mortgage is countered with the property's appraised value, which for most Canadian's in big cities should be a huge gainer if you own.

However, I don't see how something like this can be accurately calculated. It takes a mix of banking, mortgages, credit card balances, car loans, lingering student loans etc...... It would also have to be smart enough to include/exclude people if a husband or wife is a stay at home parent, or perhaps have their wealth split 50/50.