Thornhill Wealth Forum 
 
Not all debt is bad. Good debt means you are able to borrow money and repay it on time.This way you are able to 
build up a good credit record which enables you to borrow in the future.

On the other hand, bad debt means you take out a loan, but are unable to repay on time and you don't have enough money to live on. If your credit record shows that you did not repay on time it will be difficult to borrow in the future.

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This blog entry has been contributed by Courtney Carroll from Financial Fitness

During the past several weeks I have shared with you my thoughts regarding 4 key strategies for setting you on a path to Financial Fitness.  Today I would like to share with you the 5th strategy for living a more purposeful life.  The 5th strategy to be explored and incorporated in your plan is Charity.

Charity begins at home, we have often heard that.  This strategy is often overlooked by those who are living pay check to pay check because they fear that giving will leave them with very little for themselves.  Unfortunately they do not understand the universal law that there is more than enough to go around and that those who give shall receive.  Even in the good book (the bible) it is written that it is better to give than receive and that when you give your rewards will be multiplied ten fold.

Imagine the following scenario, a man has within his grasp $20.00 and he could share a portion of this $20.00 with others who are also in need but instead he clutches to that $20.00.  The unfortunate reality is that unless he is willing to open his hands and share what he has no more will come to that closed fist.  And so it is with charity, in order to receive you must open your hands and give willing to others.  By doing so, you set the stage for more to be returned to your hands.

The wealthy in society have been doing this for years.  In fact many of them give 10% if not more to worthy charities all over the world.  They understand the universal law and give willingly, knowing that by giving they will be blessed and rewarded accordingly.

Now giving doesn’t always mean giving your money.  Money is only one aspect of what is meant by charity.  For many of us our most precious resource is our time, so giving back to your community by volunteering in a senior’s home, working with children in a group home or giving back to your school community are all aspects of giving and it is your time.

What is your time worth?  Maybe you have a dollar value of $50.00 an hour for your time.  Well if you multiply that dollar value by the number of hours you volunteer per week that is the monetary equivalent of what you are contributing.  So giving does not have to be physical dollars, it can be time.  One of the blessings that come from giving is that you never know whose life will benefit from your charity.  You get the opportunity to touch countless lives through your selfless acts of kindness.  In order for you to be truly blessed and live a Financially Fit life you must become a willing giver to those in need.
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According to the CD Howe Institute,  Canada is unlikely to see a “massive wave of defaults” in the housing market as the market cools.

The report comes day after the Canadian Centre for Policy Alternatives released a report saying six Canadian cities – Vancouver, Calgary, Edmonton, Ottawa, Toronto and Montreal – were due for a correction because prices have increased beyond what’s justified by the broader economy.

“A comparison of housing market policies in Canada versus the U.S., however, suggests that there is little likelihood of a U.S.-style surge in foreclosures or a collapse of house prices in Canada.”

He said a decline in underwriting standards was key to the dramatic bust in the United States, which saw prices plummet up to 50 per cent in the last three years in some markets. Although both countries have kept interest rates at historic lows, regulations regarding who could get in on the market differed significantly.

“During the U.S. housing boom, both private insurers and government-sponsored enterprises facilitated looser underwriting standards by increasing their exposure to high-risk mortgage products such as low-documentation, interest-only and adjustable rate mortgages,” he said.

“This buildup was a key factor in the U.S. housing market crash, since when house price appreciation slowed (and then reversed) many borrowers found themselves unable to meet their monthly mortgage bills or to rely on higher prices to refinance. The resulting rapid rise in foreclosures, in turn, seems to have played a role in driving the large decline in U.S. house prices since 2006.”

Canadian officials didn’t give in to the temptation to ease qualification criteria, he said, which means fewer homeowners should find themselves in a position where they can’t pay to keep their homes. Indeed, after a short period of looser standards from 2003-2006, the government clamped down and forbade zero-per-cent-down mortgages with amortization periods longer than 35 years.

It further tightened standards this year, insisting buyers qualify for mortgages at the five-year rate instead of the lower variable rate, and insisting on higher down payments for investment properties.

“Canadian housing policies, which avoided the sharp decline in underwriting standards seen in the U.S., worked well in reducing the possibility of a housing bust in Canada during 2008-2009, and continue to mitigate the risk of a massive wave of defaults in the future,” he wrote.

“To the extent that current policies impose on taxpayers a significant exposure to mortgage insurance guarantees and, therefore, some of the aggregate risk of a decline in housing prices, it will be in the interest of all Canadians if policy makers recall the lessons of the 2008-2009 experience should pressures to relax underwriting standards reoccur in the future.”
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