Stop spending so much, think of future: reporter
Pat Foran of CTV’s consumer Alert has hit the bookshelves across the country again with his second book, The Smart Canadian’s Guide To Building Wealth.
In this book, CTV’s consumer adviser takes readers through the steps it takes to build equity and accumulate wealth. He talks to financially successful Canadians such as Ted Rogers, Ed Mirvish, Moses Znaimer, James Pattison and Alberta premier Ralph Klein, who told Foran, “Never spend what you do not have. It is far better to put off a purchase for three months until you can afford it than spend the next six months paying it off. Do not line the pockets of the bank; line your own!”
The Guide To Building Wealth runs with Klein’s attitude and action, as he has led Alberta to its debt-free status, something which Foran’s book aims to do for every Canadian.
“My book is about building wealth,” he said. “If you’re careful with your money every week and you don’t spend more than you make, then you will get ahead. The problem is that too many Canadians are spending more money than they make.”
It is the consumer-driven, “own it now” philosophy of Canadians — especially young Canucks — that leads to a larger reliance on credit cards and a lack of personal savings.
Foran told Metro that about 20 years ago people would save roughly 20 per cent of their disposable income, compared to 10 years ago when savings were chopped to nine per cent. Now, Canadians are saving an estimated one per cent of their incomes. Last year, 100,000 Canadians declared bankruptcy, and it is expected that number will climb this year to 105,000, Foran said. When you declare bankruptcy, your credit rating is damaged for seven years.
“So many people say ‘I’m going to spend it now because I could get hit by a bus tomorrow’,” he said. “But the situation is that most people are not being hit by buses; a lot of us are living until we’re 70, 80 or 90 years old.”
Some keys to building wealth include selecting the credit card that works for you and using it sparingly. He also suggests looking for the right insurance packages, whether car, home or life.
Getting the right mortgage is also extremely important, Foran says, adding that everyone should try to pay off their mortgages as quickly as possible.
Still, you should take 10 per cent of each paycheque to pay yourself.
Have debts? There are ways to get pay them off, but it is hard work, Foran says:
- Firstly, pay off your debts with higher interest because they cost you much more money.
- Avoid consolidating your debts, if possible.
As a consumer reporter, Foran has covered stories on designer hand bag rentals for $100 a month, and a $6,000 massage chair for your living room.
“I tell people about these things, but would I buy them? No way. I wouldn’t buy any of it.”
The Smart Canadian’s Guide To Building Wealth is available at amazon.ca for $17.81, or chapters.indigo.ca for $18.08.
For questions about debt and money management, visit www.patforan.com. To check your credit, call Equifax at 1-800-465-7166, or TransUnion at 1-800-665-9980.
Foran’s tips for starting out