The sudden income stop and financial market drop year-to-date have taken most by surprise and stories of hardship are far and wide.
Every one of us needs to make our financial decisions as if human life is full of risk every day in every way–because it is. Against this universal truth, the same factors mitigate individual outcomes at every income level and they are these: how much of our income is consumed by living expenses and payments, whether we have debts, how much of our income we save regularly, how much we have in savings versus our burn rate, and the extent to which our savings are exposed to the risk of loss versus safe, liquid and available when needed.
These are financial management basics for everyone. Like people of lesser means, millionaires and billionaires often have financial problems when they mismanage these basic principles. Big incomes don’t solve poor management choices.
As explained by Scott Terrio below, insolvency filings in the past couple of years were concentrated in households who did not own real estate. Now, property owners are the new growth group for insolvency filings. And so the credit cycle goes…
Consumer proposals and insolvencies are surging, as the skyrocketing cost of living pushes more and more Canadians to the absolute financial brink. For more on how some Canadians are “hitting the wall” when it comes to debt, BNN Bloomberg spoke with Scott Terrio, manager of consumer insolvencies at Hoyes, Michalos & Associates. Here is a direct video link.
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