MNP Consumer Debt Index - January 2018 | Page 2 | General financial discussion | Discussion forum

The problem with experts Loonie, is they're only right 50% of the time!

I will eventually be renewing my GICs which come due this year for 5 year terms and I will put any new money I put into GICS in for 5 year terms as well. I do try to keep an equal ratio of my GICs in 5 year windows so that I am always getting the best and worst rate. Is that what you mean by laddering?

Depending on how our move pans out, I may have a much larger amount of money to put into GICs than normal. If that occurs, I won't put all the money into 5 year terms, but I might put more than my even distribution method dictates as I am happy with returns over 3% for what I'm looking to accomplish. I did put a largish amount of our portfolio into redeemable GICs last Feb. I did get a much lower rate, but I'm glad I did it as interest rates are actually rising. If it wasn't for the uncertainty with us moving in the summer, I would be locking those all into 5 year terms as they come due, but I have not temptation to lock into 5 year terms now because:

1) I don't want to risk needing a bridge loan of some sort
2) I think it's pretty certain rates are going up more this year

So for now, I'm going to float what's being renewed this year in savings accounts or short term offerings like Huberts quarterly redeemable 1 year GIC, until I know for certain how much money we do need to avoid any temporary debt. Normally I'd be anxious about not locking in and sticking to my plan of even distribution on our GICs, but this year is different and this instability is a gift to relieve me from overthinking myself.

One thing I'm not certain of is how NAFTA will affect all of this. If it's cancelled, I would assume our dollar goes down. Will that give the BoC more room to raise rates and if it does, will they? At this point I feel the signals from the BoC is that they at best want to follow the US increases and at worst stay even with them. It will be an interesting year.

Lol, I'm the expert of course. As Craig Ferguson says, "tweet, tweet, TRUE"

You may be correct. I haven't cost out the bridge loan scenario yet, because my new money is currently sitting in Simplii and the to be renewed money isn't coming to term until next month. This is also where we get a little wierd. I've been in situations where I could buy something and pay lower on the loan than the rate on the investment, but we just don't like having any outstanding loans. For whatever reason, that's a ball we don't want to add to our juggle. It won't always make sense but that's human behaviour I suppose. You give good advice to think about that though.

This may not be a popular view and one I should keep to myself, but I think in the grand picture Canada doesn't matter much to the US or the World. About all we have to offer are resources and since we aren't a socialist pointing country which ensures it's citizens benefit from it's own resources, we sell our raw materials away at little benefit to our country. To me, NAFTA is all about Mexico. The US needs us, but I don't think they care about us because we're too weak in our stance and have basically zero bargaining chips. I feel like they already own most of what they want in our country and China owns the rest! lol! I think it should play out like you say and result in higher rates, but that will only help us if our dollar recovers long term to restore our buying power. Which I believe it would, because the US and Canada would probably improve their bilateral agreements as that 'guy' down south wants to do.

You're right. Ottawa has been more stable. I'm old enough to think the prices there are absurd too, even though they're much lower than Toronto. I've been thinking more and more about not buying a house though to avoid the risk of the market and playing into my dream to retire to another country. It probably doesn't happen, but you need to dream to have a chance of doing what you want.

Wow, that's awesome Bill. To achieved debt free so early. It really did change how we felt after we paid off our last bit of debt.

Lol, yes. I know it might sound crazy to want to leave Canada, but I've had the good fortune to live and travel to many places and surprisingly found a place which suits myself to a tee. I probably would come back to Canada eventually if I was lucky enough to try out the dream, but who knows. Sometimes it's hard to appreciate what you've got and recognise where you are until you leave.

I see Canada signed off on the TPP. I wonder how long until we can get better deals on Japanese cars and how this will affect our country's relationship with the US. I hope we start to diversify our reliance on the US more. I don't know if we're doing it the right way, but at least we're trying something new.

Top It Up said
SO ... I'm unclear where you think the "better deals" will come from?

Depending on how the TTP is structured, I thought they may increase the number they import from countries where it is much cheaper to produce than Canada. This wouldn't include current models (most likely), but as new production methods are used for different types of vehicles or to cut costs further, prices here may drop.

For example, new cutting edge robotics are being used to further automate the construction process and a new electric vehicle is being constructed at a plant. For various reason it may be much cheaper for them to build it in Japan or Asia and ship it here under this new deal vs trying to convince the public here to automate a plant etc. I don't know if it's still the case, but Toyota for example, used to insist of building important vehicles to their profit line, in Japan. In order to keep the strictest of control over the manufacturing process. With their shrinking population, there is not resistance to AI and automation like there is in North America. It may be cheaper for them to do what they prefer and build some models in fully automated plants in Japan, where they can benefit from their own governments incentives and then ship to Canada. One thing about Japanese, they are masters of project management, efficiency and continual improvement on the most microscopic of scales. If there is a way to take advantage of the TPP to increase their market share, they will work harder than most to make it happen and I wouldn't mind benefiting from those skills by plunking down less money for a nice car! haha.

There is talk of the UK joining TPP. If that happened, then the price of the new Civic hatchback manufactured there may come down.

Those are just some thoughts I had, because I'm thinking of getting a new car and usually there big picture agreements never benefit the individual consumer in a directly obvious way, so I like to imagine.