With interest rates falling as of late, refinancing your existing mortgage and switching to a lower rate may save you a lot of money – possibly thousands of dollars per year.

Imagine what you could do with the savings – anything from renovating or investing to going on a much-needed vacation or putting money towards your children’s education.

Perhaps your home is financed through a first and second mortgage. If so, reviewing your options to combine the two could also result in having more money left over at the end of each month.

With the high cost of holiday gift-buying and entertaining now behind you, this may also be the perfect time to get 2009 off to a fresh start by refinancing your mortgage and freeing up some money to pay off high-interest credit card debt. With access to more money, you will be better able to manage your debt.

By refinancing now and paying off your debt, you can put yourself and your family in a better financial position. It’s very important to not rack up your credit cards after refinancing, however, so set your goals and budgets, and stick to them.

There are penalties for paying out your existing mortgage loan prior to renewal, but these may be offset by the extra money you could acquire through a refinance.

Also keep in mind that by refinancing you may extend the time it will take to pay off your mortgage. That said, there are many ways to pay down your mortgage sooner to save you thousands of dollars. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.

You can also change the way you make your payments by opting for accelerated bi-weekly mortgage payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage.

If, for instance, you have a $100,000 mortgage, an interest rate of 5% and an amortization period of 25 years, your monthly mortgage payment would be $581.60 and your total payments for a year would be $6,979.20 ($581.60 x 12).

To understand the savings accelerated bi-weekly mortgage payments can make, take the monthly mortgage payment of $581.60 and divide it by two ($581.60 ÷ 2 = $290.80).  Next, take that payment and multiple it by 26 to arrive at your total payments for the year ($290.80 x 26 = $7,560.80).

As you can see, by using the monthly mortgage payment plan, you’ve made payments totalling $6,979.20 for the year, while using the accelerated bi-weekly mortgage plan you’ve made payments totalling $7,560.80 – a difference of $581.60. 

Basically, with accelerated bi-weekly mortgage payments, you’re making one additional monthly payment per year.

Using this example, you would reduce the amortization on your $100,000 mortgage from 25 years to just over 21 years and your total savings on interest over the life of the mortgage would be just over $12,000.

 

Provided by Brian Marling, Accredited Mortgage Professional,Neighbourhood Dominion Lending Centres, Cobourg

Those are fairly ominous words, and as I like to say…Never Say Never! However, when they come from someone like Benjamin Tal, senior economist with CIBC World Markets, we ought to listen.  This past Monday afternoon Deborah & I had the privilege of attending a luncheon in Toronto where Benjamin Tal was the keynote speaker.  The question is, ‘What was he referring to?’

Well, among other things, he was specifically talking about the unbelievable opportunity that presents itself right now with regard to current interest rates and real estate values.  It seems as though all the cosmic forces have aligned themselves at just the right time in order to present an unprecedented opportunity.  As far as real estate prices go he made the point that we are in no way experiencing the kind of free-fall in prices that has been witnessed south of the border. The decline in housing prices the past 8-12 months is nothing more than a direct response to the recession we find ourselves in. In other words it is a typical cyclical correction (say that 3 times fast!). In fact, according to Benjamin Tal the decline in the housing market has begun to stabilize. Therefore, there is no good reason to delay purchasing a home. Could prices fall further? Sure they may, but the combination of current lower prices and historic low interest rates will not last forever.

Lets talk about interest rates. He calls these rates “Emergency Rates”, and stresses that they are somewhat of an anomaly!  With respect to the recession he feels that we are in the 7^th-8^th inning of this ball game and that the worst is definitely behind us. He noted that last fall the world came within inches of a total economic collapse and that the central banks of the world absolutely did the right things in pumping all the monies into their respective economies that they did. When we start to pull out of this recession, which he believes will be later this year or early next year, we will see with that a rise in both inflation and interest rates.

So where does all this leave us?  As with many things in life … snooze & you loose! When a window of opportunity presents itself you must first realize that  at some point the window will be shut. When that happens there will be a number of responses: first of all there will be  those who never knew the window was even open – thanks for coming;  then there will be those who knew, but procrastinated, and only heard the sound of the window closing on their sluggish behind;  and then there will be those who take advantage of this unique situation and benefit for years to come!!  Which one are you?

I have been telling my clients for the past number of months that this may be a great time to consolidate debt, purchase an income property or buy that first home.  One client, by re-structuring their debt actually created an $1800 per month cash flow while eliminating all debt except for the mortgage. Wow – better than playing the lottery for sure!  Another client has saved over $120,000 in interest costs thru our restructuring plan. There are many other examples I could share of how my clients have taken advantage of this great opportunity.

For those of you who have not checked into this yet, do not miss this opportunity to see if you can save some money.  Please call me any time at Neighbourhood Dominion Lending Centre  905-372-7222 for a free analysis. I hope to hear from you soon.

 

The next time you’re looking for a mortgage for that new house or you’re up for renewal on your existing mortgage, think about using a mortgage broker – their services are free and they offer you an abundance of choices the banks simply can’t compete with.

 

Mortgage brokers have access to a vast array of lenders – up to 90+ institutions, including some of the big banks – which enables these professionals to negotiate the best possible mortgage products and rates on your behalf. In comparison, if you approach your bank with a mortgage request, they can only offer you a narrow choice – namely, their own products.

 

Mortgage brokers do their homework on available mortgage products and keep themselves abreast of any new products, or changes to existing products, to ensure they find the best mortgage to fit your specific needs.

 

Unlike the banks, mortgage brokers can also cater to self-employed borrowers as well as those who have suffered credit blemishes due to life experiences such as divorce or illness. Brokers will listen to your story, whereas the banks have a very narrow view of what fits into their financing box – and this is unnegotiable.

 

If you’re thinking of buying a home, Dominion Lending Centres mortgage professionals can find the best mortgage rate and term for your unique situation.

 

Top Reasons for Using a Broker:

1. Choice – access to multiple financial institutions
2. Costs – using a broker is free and they can negotiate lower rates for you
3. Knowledge – brokers stay up-to-date on available products and services
4. Flexibility – mortgage products are even available for the self-employed or those who have credit blemishes 

 

 

Many homeowners wished they’d asked more questions

when they got their mortgage. They assume there’s

nothing they can do until the mortgage matures. Not

so. A mortgage broker can review your mortgage at

any time and offer tips on how to save money.

Typically, we think of a fixed term mortgage as a

non-negotiable contract. And it’s true that there are

financial penalties to re-negotiate. But many homeowners

ask mortgage brokers for a mortgage analysis

– a detailed look at the penalties versus the payoffs –

– to determine whether it’s worth refinancing to get a

lower rate, finance a renovation or roll other debt into

the new mortgage. Like many Canadian homeowners,

you may find that refinancing makes sense.

 

When you signed your mortgage a few years back,

you were thrilled with the rate you had negotiated:

possibly the lowest in your home-owning memory.

That was then.

Who would have believed that mortgage rates

would have continued that marvelous downward

trend? Today, mortgage shoppers are looking at

some of the lowest rates in history, and many homeowners

with existing fixed-term mortgages are

experiencing some “rate envy” about today’s rockbottom

mortgage rates.

It might be worth a conversation with a mortgage

broker about your options.

 

There are two approaches to refinancing: you can

simply pay out the penalty on your existing mortgage

and start fresh with a new mortgage, or you can opt

for what is termed a “blend and extend.”

Firstly, understand that you won’t reap immediate

rewards when you refinance; it will take time to see

the savings, since you’ll have some up-front penalties.

Your mortgage broker can help you to assess your

“payback” period: the length of time required to see

any savings, based on the penalties you will incur

and the difference between your existing rate and

your new one.

 

Speaking of penalties, what does it cost to get out of

your existing mortgage? Generally, you can expect

to pay out the greater of either a) three months’ interest,

or b) the interest-rate differential. The interest rate

differential can be high; in effect, your mortgage

lender will expect you to pay them the equivalent of

what they will lose by releasing you from your mortgage

and lending the money at current rates. If you are

close to the end of your mortgage, these penalties

may not be too severe, but a quick analysis from your Mortgage Broker can give you the answer.

Don’t be put off by what looks like a big penalty: it’s

only one factor in your analysis.

So is it worth it? Only your mortgage professional

can tell you for sure, but many homeowners are

experiencing significant savings – even with rate

differentials of two points (or possibly more).

Begin with a visit to a mortgage broker, who has

access to rate information from a broad selection of

lending institutions – and who can provide you with

the kind of detailed analysis you’ll need to assess

your options. Many choose to consolidate their other

debts at the same time in order to maximize their

savings & improve their credit.

 

This article is brought by Brian Marling of Mortgage Intelligence

905-376-5326

This Article is Provided by Brian Marling, Accredited Mortgage Professional

 

If you’ve been thinking about purchasing your first home, but haven’t yet made up your mind, now is an ideal time to think about taking the plunge into homeownership. Since Canada’s currently in a buyers’ real estate market and interest rates have been dropping to historic lows as of late, now is the perfect time to consider your mortgage options.

 

Your first step in the home-buying process should be to talk to a licensed mortgage professional. These experts have access to a vast array of lenders – up to 90+ institutions, including big banks, credit unions and trust companies – which enables these professionals to negotiate the best possible mortgage products and rates on your behalf. In comparison, if you approach your bank with a mortgage request, they can only offer you a narrow choice – namely, their own products.

 

Mortgage professionals can get you pre-approved for a mortgage so that you know how much you can afford to spend on a home before you start shopping.

 

And thanks to the latest federal budget, there are a couple more reasons why now is the optimal time to purchase your first home.

 

First, the budget proposes a $5,000 increase to the RRSP Home Buyers’ Plan, meaning first-time homebuyers can now withdraw up to $25,000 from their RRSPs for a down payment – tax- and interest-free.

 

The budget also proposes a $750 tax credit for first-time homebuyers to help with closing costs, such as legal fees, disbursements and land transfer taxes.

 

The tax credit is based on an amount of $5,000 for first-time homebuyers who acquire a qualifying home after January 27, 2009 (ie, the closing is after that date).

 

An individual will be considered a first-time homebuyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.

 

If you’re thinking of buying your first home,  mortgage professionals like Brian Marling can answer all of your mortgage-related questions.

 

There has never been a better opportunity than right now, so don’t delay. Call Brian to have all your questions answered.

‘There’s No Place Like Home’

Many seniors would like to spend their retirement years living in the home they raised their family in, and around people and places that are familiar to them. Indeed, as Dorothy says at the end of that great classic, “The Wizard of Oz,” while clicking her ruby red shoes, ‘There’s no place like home.” Unfortunately, due to increasing maintenance costs and rising property taxes, many seniors are beginning to question the viability of this sentiment.

According to a survey conducted by Decima Research, while rising property values enhance an individual’s net worth, the corresponding rise in property taxes places an increased burden on

senior homeowners. The survey, conducted in two key Canadian markets, found that although 84 per cent of seniors believe it’s important to be able to remain in their homes for their retirement years and still have money to spend, maintaining their homes and paying property taxes are their two biggest financial concerns.

 

Faced with this financial struggle in retirement, many seniors often consider downsizing.

However, given the many costs associated with this approach, such as purchase or rental price of the new home, real estate commissions, legal fees and moving expenses, this may not be the best solution, notes Kelly Healy, a Toronto realtor with Sutton Group.

 

CHIP Home Income Plan provides an alternative to those seniors who want to remain in their home, but are finding it difficult due to the loss of income in retirement. A simple and sensible borrowing option, a CHIP Home Income Plan allows seniors to access up to 40 per cent of the equity they have built up in their home, while maintaining ownership and control of it. It can also help them create long-term financial stability.

 

“Often seniors think that selling their home and moving to a smaller place is the only way for them to regain control of their finances, even when they really want to stay in their home,” says Healy. “The truth is, by unlocking the value in their home, seniors can often receive the same amount of money they’d save by downsizing, or even more. It is important senior homeowners consider all their options so they can determine which is best for them.”

 

For further information about a FREE seminar on Financial Solutions For Seniors on March 19/09 at the Cobourg Library please call Brian Marling at 905-372-7222.

Provided by Brian Marling, Accredited Mortgage Professional,

Neighbourhood Dominion Lending Centres, Cobourg

Have you considered leasing your business-related equipment as opposed to buying it outright? Leasing enables business owners to pay for the product as it is being used while the revenue generated by the equipment ‘pays’ for itself. Virtually any other financing demands a substantial down payment, deposit or compensating bank balance. By leasing, business owners can quickly acquire use of the required equipment without major cash outlay.

Leasing can be an especially attractive option given that lease payments can be 100% tax-deductible, which may mean a more rapid write-off for business owners. And because the lease term is generally shorter than the depreciable life of the equipment, payments can be expensed in a shorter duration.

Neighbourhood Dominion Lending Centres has a leasing division – Dominion Lending Centres Leasing – that offers leasing programs providing 100% financing and requiring minimal investment for the ‘purchase’ of the equipment. Business owners can immediately take advantage of the benefits of the new equipment without using existing capital or credit, and continue growing their businesses. As an alternate credit source, leases don’t interfere with established credit lines, which, in turn, expands available working capital. Also, through Neighbourhood DLC a lease arrangement will NOT show up on your credit bureau.

Leasing options include new equipment leasing; used equipment and vehicle leasing; customized solutions through vendor finance programs; and lease-backs – where the lender buys equipment from a business owner and the owner leases it back.

Technology, heavy equipment and trailers, furniture and hospitality equipment, and manufacturing and industrial equipment are just a few examples of leasing options available to business owners. With today’s rapidly changing technology, some equipment can become obsolete relatively quickly. Leasing frequently enables business owners to acquire the new equipment they need without having to keep costly equipment working years beyond its profitable lifespan.

Vendor finance allows equipment vendors to offer customers another financing option besides cash-on-delivery or 30-day terms. On high-ticket items, this can be a major benefit, since it may not be possible for some customers to meet immediate payment terms. By extending the financing option through Neighbourhood DLC Leasing, the vendor provides a choice that allows customers to better maintain their own cash flow.

Vendor finance is also known as vendor leasing and helps build vendor-customer relationships while improving vendor sales volume. Customers can view the vendor as a one-stop shop where they can fulfill their orders and get financing, rather than having to seek financing beforehand from a bank or other lending institution.

With access to multiple lending sources, lease professionals can cater to leasing deals for a variety of credit scenarios ranging from A to C credit quality. Leasing provides known payments over a specified period – helping take the guesswork out of budgeting.

And because Brian Marling of Neighbourhood DLC is also a licensed mortgage agent, he can offer standard equipment leases and creatively structured solutions for seasonal, new or growing companies. Working with someone who is both a lease and mortgage expert enables business owners to even use commercial and residential mortgage and property credit line products, alone or in combination with lease financing, to help achieve the best solutions for their equipment acquisition needs.

Neighbourhood DLC leasing experts can even break up large-dollar transactions into multiple leases across a number of funders to ease and simplify the approval process.

As with any licensed mortgage agent who is also a leasing professional, they work for business owners and consumers – not lenders – ensuring all efforts are made to acquire the best available products and rates with their clients’ interests front and centre.

September 2009

Provided by Brian Marling, Accredited Mortgage Professional, Neighbourhood Dominion Lending Centres, Cobourg 905.372.7222

 

If you are like many of my clients you have probably never had any formal (or informal for that matter) training/education in the area of Personal Financial Management. And what does that even mean?! Well, unless you were an accounting or commerce major in school, or your parents were Ward & June Cleaver (for all you Leave it to Beaver fans), you probably have arrived at your current financial state (good or bad) more or less by trial & error. And hopefully you are on the positive side of the net-worth equation.

 

However, the statistics would suggest that the opposite is likely true. The sad reality is that personal finances is still a “taboo” subject in most circles and unfortunately this only serves to exacerbate the problem of having large numbers of people quietly living lives of financial desperation! And the assumption by many is that no one else seems to be going thru this and therefore – shame on me. Nothing could be further from the truth. Perhaps you just haven’t had the proper coaching in the area of Personal Finance.  And as I like to say, “You don’t know what you don’t know” – or translated “Quit beating yourself up”.

 

It is my firm belief that financial stress is the number one cause of marital and family break-up. This is supported by the fact that Financial Difficulties, and the stress that accompanies them, are still reported as the leading cause of divorce. Nearly every marriage goes through times of  monetary trouble, but with a sound financial plan much of the stress & strain can be alleviated.

 

The trouble is, many couples don’t even discuss money issues, plan a budget, or set savings aside. And in this society of instant gratification, money problems can quickly escalate. I like to talk to clients about making a Spending Plan as opposed to using that B-word (above) which nobody likes!! And doesn’t a Spending Plan sound more fun than making a B…?! A Spending Plan is simply deciding how you are going to spend the money you make – as opposed to over-spending money you haven’t even earned yet. What most people do not realize is that one day they are going to be a CEO of their own life and probably their family as well and without sound advise…well, good luck with that.

 

The key is to work together on a realistic spending plan based on your goals. Track your spending and make your dollars go further by sticking to your plan once it’s in place. A Plan offers a step-by-step formula for figuring out how to best use your hard-earned money. Although one of you may be better at spending than the other (is my wife reading this-just kidding), make sure you both offer input.

 

When you’re sitting down and setting your plan together, make sure you’re not going to be distracted. If you need to drop the kids off at a friend or family member’s house, then plan around that as well. Or, set some time aside after the kids are in bed. Sadly, most people spend more time programming their VCR then they do on planning their Life.

 

Start by listing your household income, then your household expenses, and review your spending habits. All of this can be done on a pad of paper or on a computer spreadsheet.

 

Keeping receipts for everything that you spend will enable you to accurately keep track of where your money is going each month so that you can review your plan on an ongoing basis. A critical analysis of your cheque book & the past 6 months credit card statements will be a revealing exercise.

 

Look at all the areas of your life from entertainment to the type of food you buy, where you buy your food and clothes, and how and where you travel. Also examine your spending personality and adjust if necessary. Are you a saver, a splurger, a spontaneous shopper or a hoarder? Become smarter with your money and avoid impulse buying.

 

If you find you’re spending a lot of money in one area, such as entertainment for instance, set aside a reasonable amount each month and prepare as a couple to stop spending money in this area once your planned spending has been exhausted.

 

Planning provides you with the opportunity to re-evaluate your needs and wants. Do you really need the magazine subscriptions, the gym memberships and all the other things you might be involved in as an individual? Although everyone needs some “me time” to wind down, could you not get that by taking a walk or reading a good book you borrowed from the library etc., – get creative.

 

Following are some tips for addressing common financial issues:

 

1. If you have built up equity in your home, consider refinancing your mortgage to pay off your debts and start fresh. You will feel much better starting over with a fresh slate, and your plan will help keep you debt free. As Your Mortgage Professional  I will be able to show you exactly how much you will be able to save each month by consolidating your debt. Those savings then go into the Spending Plan.Decide together how you can cut costs and pay down your debts.

 

1. where you can place a predetermined amount each pay period that you will not touch unless it’s absolutely necessary. This will enable you to put money aside for a rainy day, which should help ease your worries. The goal is to accumulate 6 months of living expenses.Set up a savings account

 

1. Don’t panic over financial stresses. Sit down together, take a deep breath, and grab a pad of paper to put the issues in writing. To ascertain your needs, visualize your situation. If your financial problems are severe, contact a professional, such as myself, a financial planner, a credit counsellor or bankruptcy trustee to consider your options. Many of these professionals will be able to point you in the right direction when it comes to clearing up your debts. The worst thing you can do is sit back while your debts spiral out of control and your credit score suffers.Contact a professional.

 

1. Once your financial situation is in order, start planning for the long-term, including sending your children to school and retirement.Set long-term goals.

 

1. As you accumulate money in your rainy-day account, you will be able to also save for specific purchases – avoiding the buy now, pay later mentality.Save up for big-ticket items.

 

One of the great joys in my business is assisting my clients in turning around stressful financial situations. These are the kinds of things we discuss on a daily basis with our clients – hopefully before mistakes are made. As Mortgage Professionals we care about your entire financial picture and offer expert advise designed to help you become debt-free as soon as possible and on your way to creating real wealth.

 

Because Neighbourhood DLC is one of Canada’s largest mortgage teams, we can offer you the absolute best products, service, advice & pricing. Call me today, Brian Marling 905-372-7222 for a Personal & Private consultation.

October 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

I had the priviledge recently of meeting Gail Vaz-Oxlade, the host of the popular Slice TV show “Till Debt Do Us Part”. She was the main speaker at a local fundraiser put on by The United Way  in support of the local Womens Shelter.  It was great to be able to chat with her after everyone else had left and simply affirm that the things we often discuss with our clients on a regular basis are the exact same issues she deals with on her television show – maybe I should get a TV show?!  Anyhow, the popularity of the show and the surprising number of male constituents just goes to prove that it has really hit a nerve in the general population. Plus the fact that the event was packed only underscores to me the tremendous need that exists for sound yet simple financial advise for the masses.

 

It may seem odd to some that our mandate at The Neighbourhood Mortgage Team is to help people become debt free including their mortgage.  The question I often get is,”But aren’t you in the business of selling mortgages?”.   Of course I am.  However, our ultimate goal is to see our clients become debt free including their mortgage and to begin to create true wealth in their lifetime.  Our mortgage business is primarily sustained by the referrals we receive from existing clients, friends and family.  There will always be a need for mortgages and we feel that the value we add to our clients is our passion to help people get out from under the burden of debt that seems to enslave so many.  And, frankly, it is simply not the banks mandate nor is it in their best interest to see you become debt free – quite the opposite actually.

 

This excerpt from a recent Globe & Mail publication highlights the debt problem Canadians are facing… Carney warns on debts

Bank of Canada Governor Mark Carney warned Canadians today to curb their enthusiasm for debt. Using particularly strong language, Mr. Carney said in a midday speech that the ratio of household debt to disposable income hit 146 per cent in the first quarter of the year, a record and a level that is closing in on that of the U.S.

 

Canadian consumer confidence sags

“This cannot continue,” the central bank chief warned, adding that while the net worth of Canadians is about six times the level of average disposable income, asset prices rise and fall but “debt endures.” And despite the “buoyancy” of the real estatemarket, the debt-to-asset ratio among Canadian households is at its highest in more than two decades.

 

“With Canadians working, but not as much as they would like, they have been borrowing,” Mr. Carney said. “Real household credit expanded rapidly throughout the recession, in contrast to previous downturns, and has continued to grow through the recovery. Canadian households have now collectively run a net financial deficit for 37 consecutive quarters. That is, their investment in housing has outstripped their total savings for over nine straight years. In effect, households are demanding funds from the rest of the economy, rather than providing them, as had been the case through the 1960s, 1970s, 1980s and 1990s.” Household balance sheets are growing “increasingly stretched,” and it’s possible Canadians are beginning to address the issue.

One way that we are trying to help & address the debt issues with our clients is thru our Financial Fitness Seminars. At our most recent one it was evident once again that there are scores of people who need some help to get out of the ‘Debt Rat-Race’.  The problem for many is that they simply do not know where to even begin let alone who to talk to. For some there is a sense of shame and/or embarrassment that goes with their debt. We understand all of these things having gone thru our own financial difficulties in years gone by which is why we feel deeply about the need to genuinely help others. And when you combine our mandate with record low mortgage rates there has never been a better opportunity for us to help you then right now.  Don’t wait another day, or certainly not until rates go up again, before you give us a call. We’ll be glad to help.

Here at Neighbourhood not only do we provide Award Winning Service and the best selection of mortgage products in the country, but we also offer our Free Financial Fitness Seminars and have added Personal Financial Coaching for those who truly desire a change but would like some assistance along the way. If you don’t change something then don’t expect different results.  As always you can call us anytime to discuss how we may be able to help you.

At Neighbourhood, & the home of the Brian Marling Mortgage Team, we are concerned for the total well-being of our clients. That’s why we are taking the years of experience from our award winning office and offering a series of  FREE Seminars to our clients and their friends & families and to the public at large. The seminars, entitled ‘Financial Fitness’, will be offered free of charge and will cover all the secrets of successful personal financial freedom.  If interested please call our office at 905.372.7222 to reserve your spot as seating will be limited.

 

 

October 2009

Provided by Brian Marling, Accredited Mortgage Professional, Neighbourhood Dominion Lending Centres, Cobourg 905.372.7222 

 

“Are we moral cowards or mathematical illiterates? Shouldn’t we accept delayed gratification as a virtue and not a punishment? Using bad debt to take the waiting out of wanting eventually leaves you wanting.” – Jon Hanson

 “The lovely toy so fiercely sought hath lost its charm by being caught” – Lord Byron

 By the time you read this article we will have already digested the piles of mashed potatoes, turkey, stuffing and all the other wonderful additions that make up our Thanksgiving celebrations. And as much as I personally love this time of year I want to ask you if you took the time to reflect on all the blessings in your life and the numerous people & things you have to be thankful for?  The reason this is such a critical exercise for all of us (and not just at ‘Thanksgiving’), is because for the rest of the 364 days of the year we are bombarded with the message thousands of times daily that “we can have it all now”!

What does this message really produce? As our culture has bought into it the result is an entire nation that has embraced a “consumer entitlement mentality”. Why wait until you can actually afford it when you can have it all now. Sounds good until you wake up one day & realize the prison you have created for yourself. Not to mention the fact that you have likely  ransomed your future. The progression goes something like this…from awe, to I’d like to have that, to I must have that, and finally to I am entitled to that! Where entitlements are perceived, neither common sense nor actual need is considered.

I guess the problem with delayed gratification is that it isn’t a very exciting or sexy notion. As a political platform the promotion would go something like this – Delayed Gratification; spend less than you make; provide for your own future; put back more than you take; continue your own self-education; maintain personal responsibility and self-government.  But what is the alternative…get it all now; spend more than you make; rely on government and company benefits for your future; take more than you put back; do not maintain personal responsibility for anything. Hmmm, maybe our parents and grandparents were right after all when they said things like, “If you don’t have the cash to pay for it then you can’t afford it”.

Isn’t this where the concept of Thanksgiving comes in? Shouldn’t our focus be on our daily blessings and the things we do have, as opposed to always wanting more. If we fall into the entitlement trap when is enough ever enough? And before we start feeling too sorry for ourselves economist Thomas Sowell points out, “Most Americans (I think Canadians too) living below the official poverty line have air-conditioning, microwaves and VCRs. About half have a car or truck.”.

Where I see this in my business is when clients who could otherwise afford to purchase their own home are restricted from doing so because they have made poor financial decisions in the past. Most of those decisions involve the purchasing of STUFF that could have been delayed if only they understood the consequences. A young couple in my office recently, who understand delayed gratification, were commenting with wonderment at why anyone would spend $X per week for a television they are renting when they could simply save the same amount of money for a few months and pay cash and own it. I think they get it!

“We derail the very success we seek when we step off the path to pretend that we have arrived. The inability of the Consumerati (pretenders) to delay gratification keeps the cash drawers of our merchants overflowing. The very essence of delayed gratification is to stay the course until we meet with success uncommon to those who cannot delay their desires.” – Jon Hanson

At Neighbourhood we care more about you than we do about the ‘deal’. That is why our clients have come to trust us and recommend us to family and friends. That is also why the people of this great community have made us the Readers Choice Award Winners on more than one occasion. Our mission is to continue to earn your trust as we continue to care.  

 I am thankful to Jon Hanson author of ‘Good Debt, Bad Debt” for some of the inspiration behind this article.