While many people advocate going to school and getting an education, the reality is that education costs are more expensive than most people realize. Canada thankfully provides reasonably priced educations compared to the rest of the world, but it is far from free. Given that I grew up in Chilliwack, and that I had to move out to Vancouver to attend UBC, I spent approximately $11,000 per 8-month period, which included housing on the UBC campus along with a university food program (which tasted fairly similar to prison food, I imagine). Of those costs, approximately $3,000 went towards tuition, ...

The senate passed the deal to raise the debt ceiling today, which means the United States can pay their bills and not default. But truthfully, that’s probably the worse thing that could have happened, since the US has delayed dealing with some very hard problems. First, let me comment on the ratings agencies. Right after a deal was announced, two of the three major rating agencies reaffirmed the United State’s AAA credit rating. These are the same ratings agencies that also gave AAA ratings to the credit default swaps and other securities that were the underpinnings for the 2007-2008 financial ...

I’m scheduling this post for when I’m out tomorrow for a while, so it’s possible the US may find some common ground on the current US debt negotiations. I don’t it though. Right now things aren’t looking very good for the United States, and the time is almost out where a solution can be reached and implemented before the debt ceiling expires. Negotiations continue to stall, and both sides seem unwilling to deal with some of the harder issues, like coming up with a long term financial strategy that will reduce the deficit and the debt. I actually thought there was only about a 10% chance ...

It’s no secret that most of the organized governments in the world are essentially broke. The current debt to GDP ratio in the United States is almost 100%, a fairly incredible number that continues to rise. That number alone indicates that the US is in poor financial shape, and it’s not even that accurate a number. For example, the US has a number of off budget items that are technically debt as well – all the Freddy May and Fannie Mac purchases, Social Security (the US has been taking the money every year and basically putting an IOU in its place) and Medicare. If you factor in all of ...

One of the things I’ve come to realize over the last year is that in most cases, debt is horrible thing. Granted, many businesses look towards debt as a way to fund capital purchases in their beginning stages, and I have no problem with small business loans. But all the other debt that people are addicted to is ultimately bad for the economy in general. There are many people who believe that the reason housing prices are skyrocketing in North America, as well as education costs, is due to the availability of cheap credit. I’m one of those people. Stated another way, housing and education costs ...

The following graph formed the basis for Glenn Beck’s video talking about hyperinflation, but I thought I would repost it here. Inflation, by definition, is the expansion of the monetary base in a country. While conventionally most people associate rising prices (as measured by the consumer price index – CPI) as inflation, that’s just the symptom of inflation — the root cause in the expansion of the monetary supply. Most people concede that price increases tend to lag inflation by a year or two. So any inflation of the money supply today probably won’t be felt in terms of prices for ...

I’ve been waiting for a rather big cheque to finish clearing in my account this past week. I woke up this morning, logged into my online banking, and noticed it had cleared, so I decided I would finally make the call I have waited almost ten years to make, and pay off my first student loan. At one point I had nearly $40,000 in student loans, something that seems almost insurmountable when you finish school. But unfortunately, that is the high price of an education nowadays, and banks sure don’t seem to mind capitalizing on that. Back in March I paid the final $8,000 of my car, and today I ...

Placed call #2 a few seconds ago. My BC student loan of $682.47 is now officially gone too, freeing up a whopping $30 a month back into my pockets. Happy trails, student loan. I have one last student loan remaining, valued at $1,630. I’ll try to knock it off sometime soon as well. ...

While I’m not officially debt free yet, I’m close enough that I’m going to do a post about it. Strangely enough, making those calls today to pay off my loans felt a bit anti-climactic. I’m sure it’ll sink in over the next few days, but right now it doesn’t really feel that much different. It’s amazing how debt changes your life though. Had I been debt free years ago, I probably would have quit my job in Vancouver and branched out on my own then. But unfortunately, when you have nearly $1,000 worth of monthly debt payments, you really can’t afford to take that much risk. The only ...

I just wrote myself a $12,000 cheque, which represents money saved up on various web projects over the last year or so. Since leaving Vancouver, I’ve been living fairly frugally (in fact, I probably have only paid myself about 25% of what I was making in Vancouver), mainly because I wanted to once and for all be done with my student loans and finally be debt free. In March, I dropped the last $8,000 on my car, finally becoming the official owner of a 2006 Mazda 3 Sport. Given that the car I had before that was a totally junky 1993 Toyota Tercel, I’m obviously pretty proud of myself for buying ...

I’ve slowly been chipping away at my loans these last few years, hoping for that day to come when I’ll be debt free. My net worth is positive, thanks to some RRSPs and the down payment I put into my car, but having debt hanging over your head obviously kind of sucks. I have a little spreadsheet that sort of tracks where I’m at. In April of 2008 I owed around $25,500 in both student loans and car loans. At my peak, I had around $40,000 worth of student loans, a fairly hefty debt load by anyone’s standards. Back in January I finally paid my car off. The payments on that were $400 per month, ...

I ran across this article this morning about credit card debt, and started trying to figure out what it meant in terms of numbers. Nearly 80 percent of American families have at least one credit card, 44 percent of families carry a balance on their credit cards, and Americans pay about $15 billion a year in penalty fees, according to Treasury Secretary Tim Geithner’s office. The current population in the US is around 305 million (2008 census). I don’t know how many families are in the US, but let’s take a rough stab and there are about three people per family, or around 100 million families. ...