Chapter 6

http://www.vancouversun.com/business/fp/money/face+debt/3143925/story.html

Summary:

This article talks about a trend that seems to be a fast growing problem. It is apparent that more and more seniors are beginning to face financial problems. With living standards rising, prices have risen and costs are piling up, yet income has not increased enough to match. And along with debts, even if they are good debts, financial problems are becoming more common for people in their golden ages. Baby Bloomers faced strong economic growth and adopted the idea that saving isn't too neccesary, but as these baby bloomers are growing old at the same time, problems are rising. Another factor in causing this problem is the trend to retire early while living a long life.

Connection:

This article relates to chapter 6 as it talks about bad debt expenses. Many people in the Baby Bloomers era felt as if the economy was going to give them financial security. Bad loans such as high interest loans for recreational purposes are rising to the surface as concern. Stretched out mortgage payments are seeing the effects and many of these factors result in a lack of financial security for the aging population. A positive example in this is shown in the article as a couple did not loan money for anything after one was made for their house. Good use of credit and long-term stable investing also helped them smoothen out the bump that is bulging for many people going into their golden years.

Reflection:

Long-term planning has always been a priority for couples as well as singles. But things may not always go as planned. But by decreasing unneccesary expenses, you increase the chance of having financial security in times when relaxing is the best option for health issues. Compound interest needs to be exploited at an early age to maximize its benefits. I think that you can never have too much savings as later on in your life, you will need it. We need to be smart in creating expenses so that it does not cause a problem in our future. Shortening mortgages may be difficult but it can be one of the most effective ways in security financial stability in our futures.