Mike Wells- Financial Planner

What is your biggest Financial fear?

Have you ever asked yourself, why do places like Walmart, Canadian Tire, Costco, heck even Tim Hortons try to get me to sign up for a Credit Card? simple it makes them a lot of money! Some of the latest stats is that for every dollar Canadian's earn, we are spending $1.70. In order to cover the extra $0.70, we use thing like Credit Cards, Lines of Credit, and Pay day loans to cover the deficit.
With the help of The Rule of 72 it will aid us to illustrate why Credit is such big business.
Lets say we have a Credit Card that has an interest rate of 18%. 72 goes into 18 four times. So if you are not making your payments your debt will double in as little as 4 years. and if your making the minimum payments by the time your done paying your debt off you have paid for that item a couple times over. Payday Loans are even more scarier, lets say we get a rate of 30% (I've seen them as high as 48%) Your debt can double potentially as quick as 2 and a half years. With rates like this you might as well be running up an escalator backwards. I'm not telling you to go cut up all your cards, and not to get payday loans, but will have a better understanding when you go to use that plastic card.

If I have peaked your interest, and you would like to get some more information. DM me and we can chat.

The Rule of 72 is a mathematical concept that approximates the number of years it will take to double the principal at a constant rate of return compounded over time. All figures are for illustrative purposes only and do not reflect the interest rate of any product. Additionally, they do not reflect the many types of risks, expenses or charges associated with any actual product or account. Past performance is not an indication of future performance. The interest rates on various products and accounts will fluctuate over time and, as a result, the actual time it will take any sum to double in value cannot be predicted with any certainty. It is unlikely that any one rate of return will be sustained over time. Additionally, there are no guarantees that any product or account can outpace inflation.

Check out my new website https://wfgconnects.ca/mwells and take the "How Money Works" Challenge

Mike Wells WFG – Believe in a Better Financial Future