Are you “Smart Poor” or Possibly “Dumb Rich”?

“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.” —Edmund Burke

Current Vancouver MLS stats indicate an average house price of $1,310,071 as of June 2017, so it may be a good time to stop and reflect on our own spending behavior with the economy, Canadian dollar and real estate seemingly sending mixed messages to all of us. Nanaimo has seen a rise in real estate prices although our average price for a residential home is still below $500k (based on the average sales for the past 12 months), while Victoria has begun to experience the push and pull effect of anxious buyers resulting in the average sale price rising to $829,600 in June, compared with $721,000 last year.   It will be interesting to see if this type of market is sustainable, but I would caution young buyers to really consider what they can afford to buy, especially when interest rates rising, and the prospect of 25 years (or more) of borrowing that they take on when purchasing a home.

Smart buyers will ensure that they are buying less than they can afford as well as saving for “rainy day” events that all homeowners have experienced – whether it be a leaky roof, furnace repairs, or just maintenance costs involved with owning a home.  Own a condo or townhome?  You are not out of the water either.  Strata corporations are finding the cost of insurance and Hydro on the rise, so be leery of those enticingly low strata fees for a new building.

An interesting book that I recently read titled “Smart is the New Rich” by Christine Romans, describes the recession as having a pivotal effect on the American family.  In 2007, real estate was at all-time highs in Canada and the US.  As Romans points out “this country went from flat-screens for Christmas in 2007 to foreclosures for Christmas just 12 months later”.  Romans compares money to nutrition.  She recommends asking yourself if you will feel great (like a sugar rush or glass of wine) once you buy a product, but since you don’t need it, it may hurt you (and your financial health) in the long run as it was an unnecessary purchase.  I found the book extremely fascinating as it stated that Americans on average have 13 credit obligations on record with their credit bureau!  What is the breakdown? 9 are for credit cards, department stores, gas, and 4 are car loans and mortgages!  Take a quick look in your wallet.

You can earn less, but save and invest more if you are smart when it comes to your finances.  It is estimated that there are 75 million Americans who have not even saved $1 towards their retirement.  If you have any type of savings plan, you are doing better than MILLIONS of others, regardless of your income.  If you earn a high income but make poor choices when it comes to budgeting, you might find yourself being described as “dumb rich”. Just as the recession caught many people by surprise, some individuals believed that their income stream would never end.

As you browse the Craigslist ads, you will often spot a newer RV, truck with specialized parts that has oversized tires and rims, boats, quads and other “toys” that are now for sale.  It may seem that I am making light of this situation, but that is absolutely not the case.  Many of these people become depressed, see their health deteriorate, and face struggles in their relationships as a result of the economic situation they find themselves in.  This is why I am a huge advocate of teaching kids in school about money and budgeting as only 6% of schoolchildren will receive even a basic overview of credit and finance, and so it is not surprising that these kids become adults without the insight into saving and managing credit.

Be honest with yourself and your spouse when it comes to money.  Try to save a little bit from each paycheque and question your reasoning before buying any major purchases.  If you are thinking about buying a home or investment property, get the real estate team with proven results who can assist you to secure the lowest mortgage rates possible and be there for you every step of the way throughout your purchase.

Brian & Myles McCullough – personal real estate corporation – take a look at our listings!

SELLING? If you are interested in selling your home or property, please feel free to contact us to get a FREE market evaluation of your home and learn the current value of it in today’s market. This is completely at NO COST to you and you are under NO OBLIGATION to list your home. However, like any investment, it is wise to know the value of your home so that you can make informed decisions when making any changes to your investment plan or portfolio.

BUYING? If you are interested in buying or investing in real estate, view some of our featured listings on my website at Feel free to call McCullough Marketing anytime at 250-751-1223. We look forward to hearing from you.

McCullough Marketing is dedicated to assisting our clients and providing professional advice and guidance throughout each step in the real estate process. Don’t forget to “LIKE” us on Facebook. Here is an easy link to our McCullough Marketing Facebook page:

If you would like a FREE, No Obligation Current Market Evaluation of your home or property, please contact our McCullough Team at 250-751-1223. View all of our listings and projects at

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