The level of household debt has been steadily increasing for the last 20 years in Canada so it should be no surprise that it continued to rise again this quarter. The average Canadian household now has an average of 19.6 cents of debt for every dollar of networth and household debt is averaging about 123.8% of personal disposable income.
This is a frightening figure at this stage of the financial cycle as it is much more likely that interest rates will be rising than decreasing. An increase in interest rates will of course make managing this debt much more difficult for many Canadian households. How does your household debt compare to your personal disposable income?
Thursday, July 17, 2008
Friday, July 11, 2008
How satisfied are you?
If you are thinking about enlisting the services of a full service broker you may want to check out the results of the following survey by J.D. Power and Associates. Their survey measured how satisfied Canadian investors are with full-service investment firms. Based on a 1,000-point scale here are the results:
Edward Jones: 758
Berkshire Investment: 752
Wellington West Capital: 747
Dundee Wealth: 731
Raymond James: 729
RBC Dominion: 728
National Bank Financial: 727
Credential Securities: 726
Desjardin Securities: 724
Canaccord Capital: 723
Industry average: 720
Laurentian Bank: 717
CIBC Wood Gundy: 713
Assante: 709
Scotia McLeod: 699
TD Waterhouse: 694
BMO Nesbitt Burns: 689
Edward Jones: 758
Berkshire Investment: 752
Wellington West Capital: 747
Dundee Wealth: 731
Raymond James: 729
RBC Dominion: 728
National Bank Financial: 727
Credential Securities: 726
Desjardin Securities: 724
Canaccord Capital: 723
Industry average: 720
Laurentian Bank: 717
CIBC Wood Gundy: 713
Assante: 709
Scotia McLeod: 699
TD Waterhouse: 694
BMO Nesbitt Burns: 689
Thursday, July 10, 2008
High Interest Saving Accounts - Guest Post
GUEST POST FROM http://nocommunism.blogspot.com/
Middle Class Millionaire has foolishly agreed to let me do a guest post. I apologize in advance for the mass exodus away from his blog.... to mine! Ha ha!
Sucker.
Oh, right. I was supposed to make a serious point about something.
Okay, most of us have a very similar problem. We don't have enough money. Even when we get a little extra, we're either using it to pay down debt, or we're plowing it back into our investments.
If you were, say, this guy or this guy, you'd definitely want to place to park your excess cash. But where? Don't worry son, I can help!
Let's start with the big banks, just so we can get them out of the way early. They all suck. The best one offered is RBC, which offers a high interest savings account at 2.75%. The catch is that all you get on that account is online banking.
As for the other big banks? You either need ridiculously high minimum balances, or the rate sucks. Most are 2.25%, and quite a few have a minimum balance of at least $5000.
Now onto some more interesting options.
E-Trade Canada will let your uninvested cash earn 3.05%. This is interesting if you already have an account at E-trade, since there'd be no transferring back and forth. Even though there's better rates out there, if I was an existing E-Trade client I'd just plow my money there.
ING was the company that started the high interest savings revolution, at least in Canada. They offer a rate of 3%, combining that with the promise of zero service charges if you switch all your banking to them. They also have an interesting option for your U.S. dollar cash, an account yielding 1.75%.
PC Financial's rate is a comparable 3.05%, plus a bonus of about .05% on your anniversary date. It sure was nice for PC to remember our anniversary date, cause I, uh, forgot to get PC Financial a present. Guess I'm not getting any tonight.
Manulife offers 3.00% on a pretty standard account. HSBC is the same.
Canadian Tire Financial Services is interesting. They offer 4.3% for the first 90 days, (up to $100k) then the rate drops to a more realistic 3.05%. Still, if you average those out over a year you get 3.32%, which isn't too shabby. No word on whether they pay you in Canadian Tire money, but I'd hope not.
Altamira offers a decent yield of 3.2% for their account. Citizens bank is at 3.15%.
The winner is... ICICI BANK! With an astonishingly high 3.4% interest rate, the boys from India come through on this one. Great job guys. There's just one thing. What's up with that name? Get on that, wouldja?
Upon further searching at Globefund, the average 5 year return on a money market fund is around the 3% range. You could try to cherry pick a better fund, but good luck with that.
Taking the time to set up one of these is actually worth your time. The difference between ICICI and my savings account is 3.15%. (3.40%-.25%) Having a 10,000 balance would get you an extra $315 per year.
Middle Class Millionaire has foolishly agreed to let me do a guest post. I apologize in advance for the mass exodus away from his blog.... to mine! Ha ha!
Sucker.
Oh, right. I was supposed to make a serious point about something.
Okay, most of us have a very similar problem. We don't have enough money. Even when we get a little extra, we're either using it to pay down debt, or we're plowing it back into our investments.
If you were, say, this guy or this guy, you'd definitely want to place to park your excess cash. But where? Don't worry son, I can help!
Let's start with the big banks, just so we can get them out of the way early. They all suck. The best one offered is RBC, which offers a high interest savings account at 2.75%. The catch is that all you get on that account is online banking.
As for the other big banks? You either need ridiculously high minimum balances, or the rate sucks. Most are 2.25%, and quite a few have a minimum balance of at least $5000.
Now onto some more interesting options.
E-Trade Canada will let your uninvested cash earn 3.05%. This is interesting if you already have an account at E-trade, since there'd be no transferring back and forth. Even though there's better rates out there, if I was an existing E-Trade client I'd just plow my money there.
ING was the company that started the high interest savings revolution, at least in Canada. They offer a rate of 3%, combining that with the promise of zero service charges if you switch all your banking to them. They also have an interesting option for your U.S. dollar cash, an account yielding 1.75%.
PC Financial's rate is a comparable 3.05%, plus a bonus of about .05% on your anniversary date. It sure was nice for PC to remember our anniversary date, cause I, uh, forgot to get PC Financial a present. Guess I'm not getting any tonight.
Manulife offers 3.00% on a pretty standard account. HSBC is the same.
Canadian Tire Financial Services is interesting. They offer 4.3% for the first 90 days, (up to $100k) then the rate drops to a more realistic 3.05%. Still, if you average those out over a year you get 3.32%, which isn't too shabby. No word on whether they pay you in Canadian Tire money, but I'd hope not.
Altamira offers a decent yield of 3.2% for their account. Citizens bank is at 3.15%.
The winner is... ICICI BANK! With an astonishingly high 3.4% interest rate, the boys from India come through on this one. Great job guys. There's just one thing. What's up with that name? Get on that, wouldja?
Upon further searching at Globefund, the average 5 year return on a money market fund is around the 3% range. You could try to cherry pick a better fund, but good luck with that.
Taking the time to set up one of these is actually worth your time. The difference between ICICI and my savings account is 3.15%. (3.40%-.25%) Having a 10,000 balance would get you an extra $315 per year.
Tuesday, July 8, 2008
Want to Retire Rich? Stay Married
I think everyone out there knows at least a few people who have had to for one reason or another part ways with their spouse. Other than the emotional costs of divorce there is a huge financial burden as well. Let’s just do a little exercise, take all of your networth (including pension) and divide it in half. Before you divide your networth in half don’t forget to subtract the thousands of dollars usually required to legally file for divorce and all of the associated real estate fees that go along with selling the cottage, house etc...Next you’ll want to take all of your shared living expenses, mortgage, heat, hydro, gas, cable, internet, house taxes etc... and double them (because you’ll each need your own place now).
Get the point? Divorce is expensive...so if money is tight it just might be worth working a little bit less (not more) and spend that time with your spouse instead....(especially if you live in Quebec)
PROVINCIAL DIVORCE RATES
Newfoundland and Labrador - 17.1%
Prince Edward Island - 27.3%
New Brunswick - 27.6%
Nova Scotia - 28.9%
Saskatchewan - 29.0%
Manitoba - 30.2%
Ontario - 37.0%
British Columbia - 39.8%
Alberta - 40.0%
Quebec - 49.7%
Source: Statistics Canada, 2003
Get the point? Divorce is expensive...so if money is tight it just might be worth working a little bit less (not more) and spend that time with your spouse instead....(especially if you live in Quebec)
PROVINCIAL DIVORCE RATES
Newfoundland and Labrador - 17.1%
Prince Edward Island - 27.3%
New Brunswick - 27.6%
Nova Scotia - 28.9%
Saskatchewan - 29.0%
Manitoba - 30.2%
Ontario - 37.0%
British Columbia - 39.8%
Alberta - 40.0%
Quebec - 49.7%
Source: Statistics Canada, 2003
Friday, July 4, 2008
BCE Deal is Done!
Well the BCE deal is finally going to be done and is expected to close before the 11th of December! I purchased BCE in December 2007 and although I didn’t expect the volatility, or the favourable ruling for the bondholders it is nice to see that my rational for buying was correct. To see my original thesis behind purchasing BCE please click here.
Whether BCE is actually worth $42.75 is a whole other story though....
Whether BCE is actually worth $42.75 is a whole other story though....
Wednesday, July 2, 2008
Requesting Guest Posters
As you can probably tell by the reduction in posts this is turning out to be a very busy summer for me at Middle Class Millionaire. So...I am asking you (readers and/or other blog owners) if you would be interested in submitting a post or two over the next couple of months. I am open to receiving posts on anything related to finances, investing, retirement planning, market conditions etc... I will post it on my blog but will of course give you all the credit for your writing. If you are interested please send me an email at middleclassmillionaire.blogspot.com or just leave me a comment with your email address and I’ll get back to you.
Thanks.
Thanks.
Requesting Guest Posters
As you can probably tell by the reduction in posts this is turning out to be a very busy summer for me at Middle Class Millionaire. So...I am asking you (readers and/or other blog owners) if you would be interested in submitting a post or two over the next couple of months. I am open to receiving posts on anything related to finances, investing, retirement planning, market conditions etc... I will post it on my blog but will of course give you all the credit for your writing. If you are interested please send me an email at middleclassmillionaire.blogspot.com or just leave me a comment with your email address and I’ll get back to you.
Thanks.
Thanks.
Subscribe to:
Posts (Atom)
