Canadians using RRSP's for expenses.

[firstdoo]

http://www.cbc.ca/news/business/rrsp-retirement-savings-1.4538878

It sucks to here of people needing to do this. One of the DUMBEST things that this personal finance expert suggests in this article is:

"She recommends looking at other ways to access money like taking a short-term low-interest loan or using a line of credit as a more 'financially sound' was to deal with financial problems"

How can you be a financial expert AND tell someone to borrow money. Since when is borrowing money to (most likely) pay for existing debt a 'financially sound' decision. It's very important to save for retirement, and it's very unwise to use those savings. I'm by no means a financial expert but getting advice from a financial professional that tells you to borrow money to pay for the money you spent that wasn't yours to begin with does not seem like a 'financially sound' decision to me. We have a sh*t economy right now, with a sh*tty federal and provincial (AB) governments, and rising interest rates. The last thing people need these days is sh*tty financial advice like this.

The news outlets would be better off promoting a guy like Dave Ramsey. He's got a christian based financial program, but you don't need to be a christian to learn the financial stuff he teaches. Even if you're not in a financial bind I highly recommend looking into his Financial Peace University. Its american but he's added Canadian taxes and finances to his program. And if you have a f ton of money, he's a guy that will tell you to spend what you want. He's also got a radio talk show thats easy to find.

On a side note, Ontario has a provincial election coming up in 100ish days. I can only hope that they do the right thing and get rid of Wynne and the Liberals. Theres going to be a HUGE problem left for the new ontario PC's to clean up. It'll take them some time but they'll figure it out. More importantly, as an Albertan, I can't wait for the next Alberta provincial election to get rid of the NDP and then we can dump Trudeau and the Liberals 5 months later.

 

[Halon60]

That financial advisor is employed by a bank. Thus it’s financially sound for them

 

[MK4TDI]

I'll second the Ramsey Solutions organization. Live like no one else, so later you can live like no one else.

I think this is part of the leftist agenda really. Get everyone bankrupt then tell all the bankrupt people we the government will take care of you but you have to give up more rights before we will take care of you.

It's all the big government plan... which is the most pathetic at managing than anyone else.

 

[catalac]

Hey when we are taxed to death for everything and everything is going up in price I guess people are dipping into savings. My house last month was $600 for heat and power ten years ago was a third of that. And thanks to Notley and Trudope just my gas bill was $52 in carbon tax, the extra 11 cents a liter I pay for gas and the trucking companies pay for fuel to deliver groceries has made made food costs increase. Was in states last week, $12 for 15 pack of beer, here the same is what $28. Face it we are in a socialist country now and it’s not going to get better until people stand up and vote in politicians who will actually let us keep our money for our selves.

 

[Cdnfireman]

Nothing wrong with taking out a low interest consolidation loan to pay off high interest credit cards etc if you’re dumb enough to run them up. The sensible thing is to not run up the debt in the first place.
Even if the governments we all hate get replaced, we’re gonna be facing several years of austerity to turn things around. The liberals and NDP have no qualms about running up huge deficits that following governments will have to pay down. The coming upswing in the USA economy is going to result in increasing inflation and interest rates.
We’re gonna be right back where we were in the mid 80’s.... huge government debt and higher interest rates. The result for all us working class stiffs are higher taxes and reduced government services.
Keep your debt load low as you can. It’s gonna get interesting out there.

 

[Ronaha]

Using debt to pay debt for some reason,has been logical to mass population for quite some time now. This is a "me"generation and they have their dream home and cars before they have even worked for it.The government wants every penny traceable, they don't want you using cash,etc.I don't believe in RRSP your basically loaning the government money. Most financial advisers are 60,000 a year mutts, they don't care about your money,best thing,as always is,have no debt at all, and have real value of any sort.

 

[pfi572]

^^^^^
Needs,
You need a roof over your head ,rent or a mortgage if prices aren’t through the roof.
One vehicle to get around .”not a Escalade lol”
And food on the table .
Wants ,
You work harder and pay cash for them or do without until you can afford.
Has worked for me but have did without a lot of toys in my younger years .Didn’t hurt me one bit .

 

[Cyle]

IMO anyone recommending RRSP's are idiots anyway. I was convinced to open one at 18 and put money in. Didn't think much of it, pulled all out to buy my first house and never put a penny back. It's a terrible way to try and save for retirement. Instead I bought rental properties. Renters pay off the mortgages, and in 25 years you are bringing in good money each month, the other bonus is if real estate prices go through the roof again you dump and cash out huge.

I see no problem with debt as long as it makes sense. I owe a lot because of my 3 rental properties, but it's stuff that makes sense. I mean if you're running up credit cards buying dumb chit, that makes no sense.

As far as borrowing to pay off debt, it really depends on the situation and person if it's a good idea. Lowering interest rates always help. But paying off credit cards with a loan, some people would just run them up again.

 

[Cyle]

^^^^^
Needs,
You need a roof over your head ,rent or a mortgage if prices aren’t through the roof.
One vehicle to get around .”not a Escalade lol”
And food on the table .
Wants ,
You work harder and pay cash for them or do without until you can afford.
Has worked for me but have did without a lot of toys in my younger years .Didn’t hurt me one bit .

It depends. I own 3 rental properties, and with the house I live in, I have 4 mortgages. Borrowing allows you to obtain more assets faster, and accumulate wealth much more quickly. If I wanted to buy a house in cash, i'd still be saving for the first one. Mortgage rates are dirt cheap, it makes sense to have as little equity as possible and put the money to better use (provided you use it wisely). Now on the flip side, if I sold 3 of my properties tomorrow, I could own the first one free and clear by the amount i've made on the others.

The other part is running a small business trying to buy equipment, etc is virtually impossible without borrowing. You need to spend money to make money, obviously provided you have the work to pay for it.

 

[pfi572]

IMO anyone recommending RRSP's are idiots anyway. I was convinced to open one at 18 and put money in. Didn't think much of it, pulled all out to buy my first house and never put a penny back. It's a terrible way to try and save for retirement. Instead I bought rental properties. Renters pay off the mortgages, and in 25 years you are bringing in good money each month, the other bonus is if real estate prices go through the roof again you dump and cash out huge.

I see no problem with debt as long as it makes sense. I owe a lot because of my 3 rental properties, but it's stuff that makes sense. I mean if you're running up credit cards buying dumb chit, that makes no sense.

As far as borrowing to pay off debt, it really depends on the situation and person if it's a good idea. Lowering interest rates always help. But paying off credit cards with a loan, some people would just run them up again.

Yes good debt and bad debt are two completely different things.

 

[JayT]

RRSPs are only good for tax purposes. If you make $300,000 a year right now, Throw a bunch into RRSPs to defer some taxes for when you are older and don't require as much in income, because maybe you no longer have a mortgage or any other debt and you are retired. That way you pay way less tax on the same money. That being said I don't have rrsps because I keep my extra cash in my business and reinvest it to make more money. Not everyone has that option though and at some point I think I may have to get rrsps just to avoid some tax. But rest assured it will be self directed so I invest my money where I want and the bank doesn't take half the profits

 

[Cdnfireman]

IMO anyone recommending RRSP's are idiots anyway. I was convinced to open one at 18 and put money in. Didn't think much of it, pulled all out to buy my first house and never put a penny back. It's a terrible way to try and save for retirement. Instead I bought rental properties. Renters pay off the mortgages, and in 25 years you are bringing in good money each month, the other bonus is if real estate prices go through the roof again you dump and cash out huge.

I see no problem with debt as long as it makes sense. I owe a lot because of my 3 rental properties, but it's stuff that makes sense. I mean if you're running up credit cards buying dumb chit, that makes no sense.

As far as borrowing to pay off debt, it really depends on the situation and person if it's a good idea. Lowering interest rates always help. But paying off credit cards with a loan, some people would just run them up again.

I disagree. RRSPS allow you to defer taxes to later in life when your income should be less, saving you money assuming you’ve done some proper planning. You’re comfortable being a landlord. I couldn’t. Dealing with low life renters, not getting paid, damage to property etc.... not for me. The only upside is if all goes well someone else pays the mortgage.
Either way, the key is discipline and planning. If you can’t do these your screwed either way.

 

[firstdoo]

It depends. I own 3 rental properties, and with the house I live in, I have 4 mortgages. Borrowing allows you to obtain more assets faster, and accumulate wealth much more quickly. If I wanted to buy a house in cash, i'd still be saving for the first one. Mortgage rates are dirt cheap, it makes sense to have as little equity as possible and put the money to better use (provided you use it wisely). Now on the flip side, if I sold 3 of my properties tomorrow, I could own the first one free and clear by the amount i've made on the others.

The other part is running a small business trying to buy equipment, etc is virtually impossible without borrowing. You need to spend money to make money, obviously provided you have the work to pay for it.

Im not against borrowing money entirely. Almost impossible to buy a house (or investment properties) without a mortgage. I was just pointing out a lefty article that may be giving bad advice. A consolidation loan to help lower interest rates is one thing, but with interest rates only heading up advising someone to get a line of credit to help with daily expenses probably isn’t sound advice. If I was having a tough year or had a lower income I’d rater pull out my rrsp’s and pay the tax I deferred than getting a line of credit and paying someone else Interest. Like I said in my original post, I’m no financial expert, just how I feel.

 

[drew562]

I have self directed rrsp. Put the money in for tax savings. Then buy safe stocks like visa or Td bank ect. You can grow that money big time over time

 

[fj40]

A financial expert is only a salesman for the bank or financial institute
No different than a car salesman so yes when you borrow money they make money,
Likewise when you pull your rrsp they don't make money.
As stated borrowing for needs is OK but lots of people think they need a new truck,car ,sled, have to take a vacation, eat out, their morning double double.
This is what gets most people in trouble.