Why not Leverage Credit to Create Wealth instead of Creating more debt to Finance Liabilities?
The fact is that Canadians are very comfortable carrying high debt loads to service their lifestyle. The average Canadian will carry $50,000.00-$95,000.00 in credit card and personal debt; while comfortably carrying an additional $400,000.00-$600,000.00 in mortgage and auto finance debt.
From the outside looking in the average Canadian appears to be doing quite well based on what you can physically see. However the reality is that the average Canadian is carrying $405,500.00-695,000.00 in liabilities with little to know assets.
Home owners with a mortgage truly believe that they own a home when really they are paying rent to the lender until the debt is paid in full. The "debt paid in full" generally will not happen due to the fact that; Canadians either use the equity in their home as a vending machine by consolidating the debts, or upgrade to a bigger house.
This cycle will continue until retirement at which time the average Canadian will then obtain a reverse mortgage to finance retirement years. The next generation will then inherit a debt estate instead of a wealth estate to build on. If the next generation is not taught how to do something different, the debt cycle continues from generation to generation. Canadians must learn how to leverage credit to create wealth instead of service debt to manage liabilities. FORVAN Financial Firm Financial Solutions OUTside the Box!
June 8, 2012