# This is why Canada is likely doomed… perhaps all the Western World



## Siwash

We're screwed… 

http://www.cbc.ca/news/business/lottery-win-is-retirement-plan-for-34-of-poll-respondents-1.2517046

Was talking to a colleague today who just sold her recently deceased grandfather's house in inner-city of Toronto… a construction worker who came over from the old country… lived an honest, simple and frugal life.. He left over a million in assets to her (including the house sale)… that breed didn't even invest.. they just stashed it under the mattress...

Not too many people left like that.. we can learn from them


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## BoringInvestor

I don't follow - why are we screwed?

It looks like respondents could give multiple answers as to how they expect to fund retirement... do one of those answers concern you?


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## Westerly

I think it's more media manipulation to convince us we need an enhanced CPP or the new pension scheme the provinces are pushing. Watch for tomorrow's headlines.


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## sags

There is the OAS and GIS too, unless it is eliminated by the government, which will never happen.

What this article says to me is that a lot of people already collect GIS............and a whole lot more will be joining them.

Taxpayers get to pay this.............so all the griping about a "tax" for improving the CPP doesn't tell the whole story.

At least with a CPP enhancement, the retiree and employer have to chip in something.

Perhaps the government will include assets as qualifications for collecting the GIS, to offset higher future costs.

Why should the taxpayers support someone who owns a million dollar home?


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## Siwash

Not media manipulation… I know quite a few people who don't have a penny saved and LOTS of debt… these are working people, with good jobs… aside from the board members here who are obviously savvy (or savvier) with their money, most people don't invest, save or spend within their limits… 

And to Boring Investor, you don't find it troubling that debt levels are at record high levels??

What happens when their credit runs out? They stop shopping… Note the recent retail layoffs, or the massive layoffs in general in Canada?

There is a pattern here..


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## Rusty O'Toole

That's normal. Probably 90% of the world has no retirement plans. They have to work until they drop dead or can't work and starve. This was the retirement plan of nearly everybody. Then there was a brief period from about 1950 to 1990 when an ordinary person could look forward to a few golden years before they died. That era seems to be gone now, except for the lucky few who are multi millionaires or work for the government.


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## Westerly

Most of those people surveyed will probably work to at least 65, but won't necessarily be in the higher end of the life expectancy:
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/health26-eng.htm. 

I agree GIS, and perhaps OAS should be means tested including assets. GIS already has a very low income threshold, OAS has been moved to 67, and you can now benefit by taking CPP when you're 70. Doesn't look like a lot of years to collect on something you've paid into for 40 years. Guarantee it will be there and give my estate the balance, or call it what it is.


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## BoringInvestor

Siwash said:


> And to Boring Investor, you don't find it troubling that debt levels are at record high levels??


Are we talking about the article you linked to?


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## alingva

BoringInvestor said:


> I don't follow - why are we screwed?





> 34 per cent hoped to win a lottery





> Twenty-eight per cent say they expect to get financial assistance from their children or other family members


A small secret - parents hope that their kids will help them. Kids hope that their parents will help them out. Everybody hopes that Gov will take care of everybody. In top of that every third Canadian hopes to win a lottery. Every dollar we earn has $1.67 of debt....Should I continue?


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## alingva

Westerly said:


> Most of those people surveyed will probably work to at least 65


And beyond...till they drop


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## alingva

Westerly said:


> I think it's more media manipulation to convince us we need an enhanced CPP or the new pension scheme the provinces are pushing. Watch for tomorrow's headlines.


I absolutely agree with you..But this is not the first survey that has similar stats
http://www.theguardian.pe.ca/Busine...tery-or-inheritance-for-financial-plan-poll/1
People live in a Wonderland.


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## Westerly

While I have no basis to doubt their results, both surveys are non-random, non-statistically relevant. Look also to whose behind the lotteries. "But hey, you never know." (google that phrase, I didn't realize how wide-spread it was.) The message from the lotteries is consistent.


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## My Own Advisor

Like Rusty said.....

"Probably 90% of the world has no retirement plans."

Those that do are very fortunate, very lucky or both.


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## Nemo2

My Own Advisor said:


> Those that do are very fortunate, very lucky or both.


Or perhaps they've worked hard, been frugal, and earned it?


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## hystat

from the article: _*34 per cent hoped to win a lottery*_

so 66% of Canadians don't even hope they win a lottery? Sounds like we must be a nation of well-off, common sense folks, many of which don't even play lotteries. 
My kinda country.


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## Nemo2

hystat said:


> from the article: _*34 per cent hoped to win a lottery*_
> 
> so 66% of Canadians don't even hope they win a lottery?


A quick Google, (with perhaps outdated data), indicates that:

1) Macleans 2011 "More than half of Canadians play" (so 16+% buy tickets but don't hope to win?)

2) CBC 2009 "Approximately a quarter" (or ~ 9% don't buy tickets, but hope to win?)

It's all so confusing.:rolleyes2:


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## Echo

Rob Carrick - "People sometimes say in surveys paid for by financial companies that they’re relying on a lottery win to fund their retirement. I think they’re kidding around."

http://www.theglobeandmail.com/glob...elp-you-build-wealth-in-2014/article16032484/


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## Mechanic

My intention is to win the lottery every time I buy a ticket,:encouragement:. A multi million figure jackpot would change my plans for sure.


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## Jon_Snow

Nemo2 said:


> Or perhaps they've worked hard, been frugal, and earned it?


This.


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## m3s

Nemo2 said:


> Or perhaps they've worked hard, been frugal, and earned it?


Fortunate/lucky to be born in Canada though. (he said world)


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## Nemo2

m3s said:


> Fortunate/lucky to be born in Canada though. (he said world)


So those born/living in Canada who are broke are simply "unlucky"?


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## Tawcan

Once again it just shows why personal finances should be taught in school.


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## m3s

Nemo2 said:


> So those born/living in Canada who are broke are simply "unlucky"?


The opportunity to retire early is obviously much higher in Canada than some places. Are you saying you would do the same regardless where you were born?


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## none

If school is meant to provide a foundation for citizens to live productive and happy lives, I have always thought it odd that more life skills, such as cooking, balancing finances etc are NOT taught in school. Some say that should be the job of the parent but the same could say the same of calculus. Indeed, I believe a good understanding of calculus is integral to living life to its limits.


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## Nemo2

m3s said:


> The opportunity to retire early is obviously much higher in Canada than some places. Are you saying you would do the same regardless where you were born?


_Advocatus diaboli_........if it's down to luck of birth/residence, yet the majority are unprepared for retirement, then there must be factors at play other than Karma.


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## RBull

alingva said:


> A small secret - parents hope that their kids will help them. Kids hope that their parents will help them out. Everybody hopes that Gov will take care of everybody. In top of that every third Canadian hopes to win a lottery. Every dollar we earn has $1.67 of debt....Should I continue?


My thinking exactly. 

To the OP it's not Canada or the whole western world that is screwed. The people who have failed to plan are screwed.


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## Jon_Snow

Maybe I'm getting cantankerous in my early 40's but I think the majority of people only have themselves to blame. 

Many lack the work ethic to make more, or they lack the discipline to spend less - and quite often the deadly combination of the two. Not a lot of sympathy from me - I made a decision many years ago NOT to be a financial train wreck, and live my life in such a way that I would not become one. Sounds a bit arrogant I know. But its how I feel.

I realize that many are struck by misfortune in their lives and I am not talking about these folks.


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## dogcom

The worst one of them all for people who make enough money Jon Snow, is when people say I am just no good with money. What they are really saying is I just don't want to be responsible in any way and spend until I can't anymore. It can't be the math because all you have to do is not spend more then you make. These people I feel have earned the right to be poor and deserve little sympathy.


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## sags

There was one other interesting tidbit that 49% of the people polled planned on selling their homes to finance their retirement.

With 9 million boomers heading for retirement, many of them owning homes, that would be a lot of homes for sale.

In many cases, the boomers will be okay. They will be in a position to sell their homes........because they bought them 30 years ago, paid a lot less for them, and can afford to take a much lower price to get some equity out of them.

30 years ago, a really nice single family home cost $70,000. Boomers have lots of wiggle room on price.

People who bought within the last 10 years aren't in the same position.

The lack of retirement income may very well have negative repercussions for the entire economy.


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## Brian Weatherdon CFP

I believe it is the example of people like that who prove Canada's strength. If you remark on the personal strength and savings of those grandparents, some of the grandchildren will be exhibiting very similar (personal) values in their own lives. Much to Canada's benefit.


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## sags

I agree Brian.......but the "lessons learned from hard times" seems to be weakening as the generations pass through.

Younger people think hard times is having the cable go out for an hour.

Today's retirees will be alright, I think. They know how to cut back........they just have to remember when they first married.

The generations after that.........have never experienced hard times..........yet.

But the job markets, lower incomes, no pensions,............is going to make it a tougher world for them.


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## andrewf

Sags, I think you are about to earn an eye-roll. Kids these days have it so easy, I had to walk up hill both ways to school in my grandpapys pyjamas! On the other hand, you were once able to get a decent job with a high school diploma, if that. These days there are many grads who have a hard time finding a job to repay their massive student debt.


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## Nemo2

As an aside, and with reference to Sags' comments......I, like most/all of us, read Canadian and international news online and, (with acknowledgement that we have faster & faster available information daily), it _seems_ there are more young people committing suicide, generally over basically trivial issues, than ever before.

If this is indeed the case, why? Is it absence of backbone? Is it that they've never learned how to lose because competition is being downplayed, (or outright discouraged), at schools? 

I'm perplexed, and if it is indeed accelerating then it's not a good omen.


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## sags

Well Andrew...........you do know that it is a rather recent phenomena to "borrow" so much money to go to post secondary school ?

My wife worked full time as a waitress for 5 years after high school to save the money to go from Saskatchewan to Scarborough General Hospital Nursing School.

My niece worked part time at Walmart during high school and University. She also worked full time in the summer at GM for 5 years. She left school with an Honors BA in Business and an upper management job at Walmart. She had no debt when she graduated.........and had saved enough to buy a new car when she graduated.

Yes, it does cost more for post secondary education today...........but too many young people seem perfectly willing to just pile it on.

In today's world they are in for a rude awakening. I don't wish it upon them........but it is the reality they face.


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## lightcycle

Nemo2 said:


> it _seems_ there are more young people committing suicide, generally over basically trivial issues, than ever before.
> 
> If this is indeed the case, why? Is it absence of backbone? Is it that they've never learned how to lose because competition is being downplayed, (or outright discouraged), at schools?


I have background on this. Suicide is not caused by "trivial issues". 9 times out of 10, the cause of suicide is mental illness, most often untreated depression. 

Mental health issues are the least understood illnesses. The prevailing attitude is, "Why can't they just snap out of it?" or, "They need to put things in perspective!", and "Suicide is selfish and cowardly!". If you really understood it, you'd see that it is an act of relief for intense and unbearable pain. Just because you don't understand it, doesn't make it less real for those suffering.

There's an unspoken (and very un-PC) belief by some who work in mental health that until a cure for depression is discovered, maybe it is a terminal disease; that suicide is the eventual outcome for someone whose medication or counseling can no longer do any more good.


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## donald

I wish I could think of where I read this the other day(might of been something penned in cnn money or something)
It is false that today's youth are spend-thrifts.According to data gen y and mili's are developing savings rates on the same trend as depression era folks(ie 1920's)
Because ''we'' have seen first hand the effects of 08 and all that it entailed their is a acute pain point that was experienced!
This generation we have here will likely mirror what many of ''our'' grandparents had to endure(20's/dirty 30's ect)
It is actually the boomer's that according to the article I read,that are the bigger problem and drain.(always the booms!lol)
It may not look like it but today's youth don't have it easy but they are displaying fortitude and are overcoming the ''great'' recession and the academic school ''bubble'' ect.....something like that,i think today's youth are not going to get a rude awakening BECAUSE,they have been living the memo already(aka right now)


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## Nemo2

lightcycle said:


> Just because you don't understand it, doesn't make it less real for those suffering.


OK....so, and considering Donald's point that younger people are actually exhibiting fortitude, is depression among younger people dramatically on the rise?


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## m3s

Nemo2 said:


> OK....so, and considering Donald's point that younger people are actually exhibiting fortitude, is depression among younger people dramatically on the rise?


Many point to a "correlation" between materialism and depression. The most prosperous economies have the highest rates of depression, and the change is noticed in the newly developed countries as well. There are many possible explanations. Everybody knows that financial success often comes at the price of family etc. People become more individual and competitive, sacrificing life and community for extrinsic rewards. Depression sets in if you realize it was a fool's errand, ignorance is bliss. A lot of youth were probably raised in a shallow environment and don't even know where to start without money, having been promised a "better life" with a degree. And now we have the rise of the hipsters.


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## lightcycle

Nemo2 said:


> OK....so, and considering Donald's point that younger people are actually exhibiting fortitude, is depression among younger people dramatically on the rise?


Suicide in Canada rose in the 1960s and peaked in the early 80s and has been slowly declining ever since. Most of this is around the education and awareness surrounding mental health, but maybe also because of the effectiveness of emergency medical services.

The age group most at risk for suicide is, and historically, always has been 40-59. Roughly twice the risk of committing suicide than those aged 15-39. Perhaps what you are seeing is a media bias in reporting, as it's sadder to hear of someone younger ending their life.


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## Nemo2

lightcycle said:


> Perhaps what you are seeing is a media bias in reporting, as it's sadder to hear of someone younger ending their life.


Yes, quite possibly.


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## Nemo2

A debate between Bill Ayers and Dinesh D'Souza.......if you can wade through Ayers' insufferably pretentious opening remarks, and subsequent meaningless hyperbole, D'Souza's responses/views are worth waiting for:

http://therightscoop.com/watch-live-debate-dsouza-vs-ayers-at-dartmouth-at-730pm/


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## alingva

sags said:


> With 9 million boomers heading for retirement, many of them owning homes, that would be a lot of homes for sale.


A lot of them do not own a home, they share "their" home with their bank (banks can call themselves "proud Canadian landlords")


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## RBull

alingva said:


> A lot of them do not own a home, they share "their" home with their bank (banks can call themselves "proud Canadian landlords")


Are you saying "a lot" Canadians will not have their home paid for by/in retirement? If so do you have a source for that claim and can you define "a lot".?


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## Nemo2

RBull said:


> Are you saying "a lot" Canadians will not have their home paid for by/in retirement? If so do you have a source for that claim and can you define "a lot".?


http://www.cbc.ca/news/business/taxes/canadians-carrying-debt-into-retirement-1.1168936



> A 2012 study by BMO found that more than half of Canadian homeowners* expect they'll have a mortgage in retirement. And a recent CIBC poll found that 59 per cent of retired Canadians were carrying some kind of debt.


(*Renters, I presume, are considered a different category, over and above 'homeowners', which would lower the percentage of retired Canadians who own their own homes outright.)


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## RBull

Nemo2 said:


> http://www.cbc.ca/news/business/taxes/canadians-carrying-debt-into-retirement-1.1168936
> 
> 
> 
> (*Renters, I presume, are considered a different category, over and above 'homeowners', which would lower the percentage of retired Canadians who own their own homes outright.)


Thanks for replying with that. Absolutely astounding to me. 

I would expect however that the word retirement will need to be redefined. It is likely many of these people will continue to work at something on at least a part time basis, so they will not really be retired. My wife and I have "retired" from our main careers but do something on casual and P/T basis for about 4 years now. We don't consider ourselves "retired" though until we stop working altogether this coming summer. I wonder what that definition is for the purposes of the study.


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## richard

Nemo2 said:


> A debate between Bill Ayers and Dinesh D'Souza.......if you can wade through Ayers' insufferably pretentious opening remarks, and subsequent meaningless hyperbole, D'Souza's responses/views are worth waiting for:
> 
> http://therightscoop.com/watch-live-debate-dsouza-vs-ayers-at-dartmouth-at-730pm/


No thanks, I already wade through enough insufferably pretentious remarks and meaningless hyperbole online


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## Nemo2

RBull said:


> We don't consider ourselves "retired" though until we stop working altogether this coming summer. I wonder what that definition is for the purposes of the study.


When I, temporarily, relocated to Ottawa in 2004 I found a new doctor who asked if I was retired - I said "Sort of"........he replied "You either are, or you aren't"..........my response was "Well, I don't work, but I had nothing to retire _from_".


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## richard

Nemo2 said:


> When I, temporarily, relocated to Ottawa in 2004 I found a new doctor who asked if I was retired - I said "Sort of"........he replied "You either are, or you aren't"..........my response was "Well, I don't work, but I had nothing to retire _from_".


Great, we've found the solution to youth unemployment! Really though, retirement isn't black and white. I hope the doctor's knowledge of medicine was better than his financial planning wisdom.


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## Nemo2

richard said:


> I hope the doctor's knowledge of medicine was better than his financial planning wisdom.


We're finding, more and more, that, akin to economists for whom everything is "Unexpected", the mantra for medical practitioners is all too often "I don't know".


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## richard

Nemo2 said:


> We're finding, more and more, that, akin to economists for whom everything is "Unexpected", the mantra for medical practitioners is all too often "I don't know".


They can't, really. No one has time to read all the new information that's available to them.


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## Rusty O'Toole

Nemo2 said:


> We're finding, more and more, that, akin to economists for whom everything is "Unexpected", the mantra for medical practitioners is all too often "I don't know".


Or, after fooling around for a month and getting the results of all kinds of tests, "we think it might be". By that time you have cured yourself or you are dead.


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## alingva

RBull said:


> Are you saying "a lot" Canadians will not have their home paid for by/in retirement? If so do you have a source for that claim and can you define "a lot".?


Here is another one http://jaybanks.ca/vancouverrealestatenews/2013/08/20/mortgage-retirement/. 
I know it because I deal with retirees and their huge amount of debt, I do not need to read newspapers about that


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## sags

TD Bank reports that homes are overpriced........and are manageable because of record low interest rates.

Car manufacturers are offering 0% down payment and 0% payments for 84 months.........but people are too broke to buy a new car.

Retirees are entering retirement with previously unheard of debt loads.

Students are entering the workforce will previously unheard of debt loads.

Everybody it seems............is in debt up to their eyeballs.

Spend your pay paying as many bills as they can...........put the rest on credit cards..........pay off the credit cards from the HELOC........start the cycle again.

25 years of payments........and using the house as an ATM........and they owe more than when they bought it.

They hope home prices rise enough that they can sell and get out...........with a little cash in their pockets after they pay all their debts.

It has been going on for years..........and the end is coming. Stagnant wages and skittish banks will end it abruptly.

Everything.........depends on home prices.

When they fell in the US.........the online message boards lit up with people complaining the bank had frozen their HELOC and the credit card companies wouldn't raise the credit limit anymore. "What am I supposed to do", they said. "The HELOC is my savings account.......it is my kid's education fund. It just isn't fair".

People who were responsible with their money..........were caught up in the mess too. Their home, which they had diligently paid down for years and years, suddenly lost 50% of it's value..........because half their neighbors couldn't make the mortgage payment and moved out.

Responsible people were laid off. Responsible people had to use their savings to survive. Responsible people watched their portfolio's get crushed and their retirement plans vanish. Responsible people had their relatives move in with them.

I wonder if Canada will get "lucky" again, or is it time to pay for the "free lunch".

Low interest rates are when you are supposed to pay down your debt..........not accumulate as much as you can bear.


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## Just a Guy

Sags, you had me agreeing until your last point. There's no reason to pay down your debts in low interest rates, but the kind of debt you take on is ALWAYS important.

The one good point that Robert Kiyosaki had was teaching the difference between good debt and bad debt.

I've lived debt free for several years in my past and, now that I'm older, I regret those years. Had I borrowed and invested that money instead, I'd be richer by at least an order of magnitude today. Granted, a lot of that money depended on unprecedented growth in real estate, business and the stock market, but even without that, I'd be significantly better off.

Going in debt to buy good cash flowing investments instead of toys isn't a bad thing in my experience. A time of low interest is a gift to make you wealthy. Of course, most people didn't do it, and now want to take it from the few who did...


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