The phenomenon of 'financialisation' is becoming more and more marked in Canada. Financialisation is a state in which people fall farther and farther into debt. The higher and higher profits of the banks do not reflect real progress but just the measure of how people are falling deeper and deeper into debt.

Financialisation makes a few corporations richer, but it does not help the economy. Why? because when people are in debt they cannot spend, thus slowing domestic consumption. but the whole canadian system pushes people to this state.

high rental fees encourage people to take out a mortgage; people then borrow money to buy a car; then insurance is needed to cover these assets. More and more products, even software, are bought on credit. But all this borrowing in the end compels people to live way beyond their means. In the end, they end up paying MUCH MUCH more than the actual price/value of a product because of interest.

The Canadian consumer culture ENCOURAGES people to live beyond their means.

In Indonesia it is striking to see just how some people succeed. They succeed by simply not living beyond their means and not falling into the trap of financialisation. I met the head accountant of a major oil company, a Chinese Indonesian, and he sleeps on the floor in a rented room ! WHY? Because he doesn't yet have the means to buy a house... so he doesn't live beyond his means. But he saves 80% of his paycheck! When he moves into a house, he will own it.

Many of my friends in canada have invested in houses/cars/various gadgets, etc. and they live like paupers. True... they can live in a nice neighbourhood, but their bank balances are at zero. And woe to the people who depend on CPP or OHIP too when they are older....

Anyway, my message is... take the red pill... don't follow the herd. Live within your means. Don't let your kids pressure you into buying them things. Think of the FUTURE value of an asset and factor in the interest the salesman says you have to pay.

Canadians are living in a dream. It's a sweet dream, i admit: but it's still a dangerous illlusion.

Chris nice article. Yeah it’s really true that we people borrow money to buy luxurious things. As an Indian & specially as a north indian, I have seen most of the north-Indians believe in show off.

We don’t believe in simple living & high thinking!!! & that’s the worst part of our culture. I have seen lots of people who borrow money to buy some luxurious things but don’t have money for their future.

As for my point of view We have to change this culture. We have to stop show off . Cut your coat according to your cloth!!!!!!!!!!

Good research

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True and well said Jyoti

Thanks and regards.
Biomed

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"Change before you have to" : Jack Welch

Hello,
I agree to you all in principle but at the same like to say that the indonesian example is the other extreme and personally I wont like to continue like that either.
The idea is that one should be smart enough to know how to use these services( some might not agree to this word ) and not end up being used by the service providers. I guess, a healthy mix would be ideal.
But great issue to raise Chris, really appreciate it, most people really go overboard without thinking about the consequences.

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Cheers,
JSethi

Thank you for your positive comments, everyone.

In my view, the situation is a precarious one. Everything is dependent upon the price of real estate. Canadians pay mortgages in the hope that real estate prices will continually rise. Immigration is part of this... if there is a constant stream of immigrants, then there will be an ever increasing demand for housing, thus steadily pushing the price upward. However, if immigrants decide that canada has no opportunities and opt for other countries, then the whole fabric of canadian society would fall apart !

this sounds extremist, but consider the following: immigrants stop coming to canada, the demand for housing falls, people are then better off renting than buying since if you buy a house for $200,000 plus interest over 20 years and the value of the house actually goes down... or you can't sell it at all... everyone would lose out. The banks would then lose a major market for loans. The pace of the whole economy would slacken.

so, to end this argument, i've seen many people asking why canada wants/needs immigrants, but as you see, the fortunes of the canadian economy to a great extent relies on the future of immigration.

To tell you the truth, i'd like to live a simple life. Enjoy the company of friends... greet all comers with a hot cup of tea... read good books... spend time with my children... but i can't ! who can?

I work 12 hours a day. Jakarta is a crazy city. You can't go outside and stroll around. You're stuck in a taxi or an office all day. Why do i do this? Stress... pressure... insurance payments... house payments... the wife always moaning that she needs this appliance or that appliance.

I wish i knew how to get off the treadmill, but i feel i would be letting my children down. how will i pay for their education if i don't work like a dog? why would they respect their father if he doesn't provide for them? and thus, we all work until we die, i guess. i can see no other way.

i don't know... they tell us society is improving, technology is improving, yet quality of life seems to be going downhill every day.

Credit cards can be tempting no doubt. I do not think you can save anything on $8-10/hour jobs to pay back what you borrowed on the credit card.

These things are anyway going to spread to other countries and India. Already you can see in India, getting loans has become easier with coming up of private banks. There are so many new credit cards coming out in India too. You can check apnaloan.com.

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