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Saltin
Aug 20, 2003
Don't touch
You know your car is part of the problem, but let me crystalize this for you and anyone else reading who doesnt understand this.

Saltin's two rules of buying a new car

1)If you are buying a new car and have to amortize more than 4 years, you cannot afford it. This is true even if the rate is close to or equal to 0. There is a utility to cash flow that people who are smart with money understand, and this means you don't get involved in paying for a loving car across six years. It's laughable.

2)If you are buying a new car and cannot put 20% down to ensure you'll never be upside down on the loan, you cannot afford it.

If you can meet those two criteria, fill your boots with whatever makes you happy.

Saltin fucked around with this message at 22:31 on Jul 28, 2011

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Saltin
Aug 20, 2003
Don't touch

tuyop posted:

Maybe it's harder to get debt in Canada?

It isn't really. There are definitely less of those "we don't care about your credit history" type places here, but as long as you're reasonably solvent, the banks here will lend to you - they are all in wonderful shape with lots of money they are anxious to loan.

Saltin
Aug 20, 2003
Don't touch

DuckConference posted:

Also the whole "use the wildly rising value of your house as an ATM" is somehow still very much a thing here. HELOC ads/promotions are everywhere.

Until recently it was, but Ottawa withdrew government insurance backing on lines of credit secured by homes in January, and since then they arent being pushed any more. Great move which demonstrates a willingness to return to the sanity our financial system is generally known for.

Saltin
Aug 20, 2003
Don't touch

Vomik posted:

People do do this. I grew up dirt poor and was so accustomed to saving everything I could so I wouldn't end up like that and feeling anxiety about spending any money that I stockpiled a bunch of money and lived way below my means in a radically different tax bracket than my parents. I would constantly check my checking account and savings accounts. I know other people like this too.

Can we agree that the ideal is (as usual) somewhere in between the two extremes?

Being in serious credit card debt is undesireable, and avoidable. Planning for your future by saving wisely is important - so is enjoying your money. I take my retirement and my child's future education seriously and plan/save appropriately. I also own a brand new $60,000 sport sedan that makes no sense from a purist standpoint, but gently caress do I love it. The difference between me and a guy like the OP is that I can easily afford it, and if I sold it today I wouldnt be anywhere near upside down.

Good financial planning is a ying and yang between the "I want it now" and the "I need security later". It's possible to do both, and ultimately I think that's what this forum should be about. This is the goal we should all strive for.

You don't need to watch every penny you spend if you save appropriately. You also need to be sure you can afford what you do spend. There should be more reason on this board and less "all or nothing" penny pinching.

Exercise does happen to be a good analogy here - if you want to get fit and cut everything you love in life out, you'll never get there. There is a place called "good enough".

We're rational and emotional animals, and the best plans account for both sides of the equation.

OP you are far too offside on the emotional side right now, and the majority of the respondants here are offisde on the rational side. Realize this is a reaction to how emotional your approach is. Look for the middle ground. Look for good enough. Being debt free is part of good enough. Do what it takes, take your lumps and you can get back on track.

Saltin fucked around with this message at 00:02 on Aug 1, 2011

Saltin
Aug 20, 2003
Don't touch

tuyop posted:

For retirement, one way or another I'm going to get a nice government pension. The military one is sick, like 80% of your ending salary, and a teacher one is similar. Do I need to save for retirement?

Depends, do you think the pension deal will be anywhere near that sweet 35 years from now? (it won't). Do some reading about the number of people that are retiring in Canada in the next 5-10 years and the sort of shape pension plans will be in. In 2030 they estimate just 3 workers for every retiree in Canada. That's down from 6 workers per retiree in 1980.

To keep the big pension funds solvent, the fund managers can (and will) do a few things. None of them are good for you- cut benefits, increase minimum retirement age or raise premiums.

You bring up teachers, which is a great example of how hosed things are - in 1970 there were 10 teachers paying into the pension plan per retired teacher. Now there are 1.3 teachers per retired teacher. (Ontario teachers)

I know this poo poo and don't even have a pension plan (other than my own considerable nest egg which I manage myself). You're at the back of a very long line and I would not count on the helpings of prime rib to be cut so thick by the time you get to the front. I wouldnt even count on it being prime rib - more like ground chuck. Act accordingly.

Saltin fucked around with this message at 13:14 on Aug 20, 2011

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Saltin
Aug 20, 2003
Don't touch
This thread is crazy. On one side there are a bunch of hard core rationalists that think the only way to get straight financially is to be super disciplined. Look at the huge back and forth regarding fitness and smoking and how expensive it is.

Look guys, that's great advice and you're right. I don't think Tuyop would argue that smoking is good for you, financially or otherwise, but you're missing something...

On the other side we've got Tuyop, who's clearly a more emotional fellow who likes to enjoy life, is far too impulsive with his money, and has a smart alecky answer for almost everything. He's young and doesnt understand the hole he is digging/has dug for himself.

You can't come at a guy like this with "stop doing everything you do" (i.e. smoking, sell the car, stop buying boots, etc, etc). it won't work, even if it's right . If you seriously want to help this guy change you've got to focus on a small thing that is reasonable to change.

I see people fail all the time at the gym, for example, because they think "I need to diet hard core and exercise 4 days a week". That's way too much for most people, even if it is best. How about "exercise 3 days a week and cut out soda". You can still have pizza on Friday night for now, enjoy yourself. Who's going to be able to keep it up longer, generally speaking? it is loving exhausting, emotionally, trying to change to many things at once that require great discipline to change

Id say something like "hey dude, take 10% of your gross income monthly and put it in an RRSP/401k. Pay your credit card debt down as priority one, and you know what? Don't focus on the debt with the highest interest rate (GASP!), pay off your smallest debt. You'll be able to do that, and when you do, you'll feel progress and a satisfaction that will appeal to your emotional nature, and you'll continue on to paying down the next debt". Here the change is broken off into bite sized pieces, and we've focused on something that will deliver the quickest result. It isnt technically correct from a financial perspecitve, but it is absolutely correct from a change management perspective, and after all, we want to implement a change here, right?

Guys like the OP can succeed this route.

Instead people want to talk about cigarettes and it's sort of silly.

Saltin fucked around with this message at 17:49 on Aug 24, 2011

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