The following is re-published, with permission, from an article my friend David Spigelman wrote on LinkedIn on January 9, called “Troubled Times Ahead”. To see David’s LinkedIn profile, click on the picture.

http://www.huffingtonpost.ca/2015/01/08/canada-housing-debt-deutsche-bank_n_6438440.html

I have to agree with the following article, the new generation of 20-35 year olds need to learn the value of a dollar. I feel the main issue for this inflated housing market is that the 20-35 year olds are so quick to live like our parents that they do not realize the time our parents put in to get where they are.

My wife and I in the last five years have purchased two properties, one a rental and this year a resident. Both times we spent months looking and always offering less than the asking price. The first purchase was 20 under asking and the second 50 under original asking price. A lot of people might wonder how we did this.

First we were not in a huge rush to buy and second we knew OUR LIMIT. This is not the limit the bank gave us, this is the limit we gave ourselves, yes we bought older homes but we are also in a safe position for when interests rates rise which is currently occurring now.

The fixed rates everyone has are great but the 2-3% your rate is now will be around 3-5% within the next 2-5 years. Is wallet ready for the increases.

The other great item to note is the automobile industry that has been able to successfully get the 20-35s to buy cars like they were phones. Leasing is not only the most expensive way to “own” a car but there is never value in the car. The only convenience is the premium you are paying to replace it with a new model three years later.

Our generation needs to stop and look at their finances before we reach retirement and realize it is too late to be money smart.

Cheers,

David Spigelman