In your hands

In the years that my pal Nik Nanos has been polling – sixteen of them – it’s never been this bad.

The question was simple: “Thinking of your personal finances, are you better off, worse off or has there been no change over the past year?”

Overall, Nanos found people are as grumpy, dark and stressed as they were when Covid came and nuked the economy. But the most remarkable response came from those aged 18 to 29 – Zs and young Mills. They’re in a bottomless funk. The polling numbers for kiddos have been in a freefall since the end of March, turning lower again after this month’s federal budget. This reflects a 11% unemployment rate among the cohort as well as the sentiment of 80% that they’ll never, ever, ever afford real estate.

Nationally, here’s how the polling looks now, as published in Bloomberg today. It’s ugly.

Only 11% of people (all ages) say they’re better off (the lowest since poling started in 2008). Fifty per cent say things are worse. Sentiment among the young is ten points lower. And falling. Clearly the April budget, touted as bringing ‘generational fairness’ to the nation, failed. The under-30 crowd did not see it as making housing more affordable, relieving climate anxiety, addressing wealth disparity or improving a future now addled with hundreds of billions in new debt added over the past eight years.

These are voters who never – prior to two years ago – experienced interest rates increases or meaningful inflation. Over the decade in which they entered adulthood and the working world the price of an average property in Toronto (for example) has gone from $622,000 to $1,152,000. A variable-rate mortgage in 2015 was 2.5%, and now it’s far north of 6%. Inflation in Canada was 1.6%, which swelled to 8% and is now just under 3%. And during this time of Trudeau reign, of course, we all went through a life-changing, isolating, damaging pandemic.

The changes have been intense, overwhelming and almost-completely negative. Sadly, understandably, many kids have given up. YouTube, Insta and TikTok teem with ‘I’m-outta-here’ vids posted by those leaving Canada, or wishing to.  Meanwhile election intentions have shifted massively. For the first time (ever) the youth vote has gone to the Cons – traditionally the bastion of Boomerism. It’s not so much an endorsement of Poilievre (who has the same housing policies as the Libs), but a repudiation of the ruling establishment.

Of course, the next guys won’t be able to make houses in Van or the GTA cost $600,000 again, push inflation to 1% or halve financing costs. Ironically, while the young are most supportive of Big Government and socialism-lite, Conservatives have traditionally believed in less government and more free enterprise. It stands to reason their expectatios may be squished.

So, as always, the best course of action is to take care of yourself.

Instead of moaning, whining, being pissy and morose, here are a few things to focus on.

First, take full advantage of the insanely generous tax shelters and savings vehicles this unfocused government has delivered. The TFSA can shelter seven grand a year from taxation. The first-home savings account can be fed $8,000, not only yielding tax-free compounding growth but also a full deduction from taxable income, with a tax-free withdrawal. The RRSP contribution limit has swollen to $31,500 (and you can move over forty grand plus growth from a FHSA). The total contribution room so far to a TFSA is $95,000.

Yeah, I know you need actual money to take advantage of these gift horses, which is why spending needs to turn into squirrelling. Think about it the next time you lie down for a $400 tat, or spend two grand going to Mexico. Whatever you can set aside, do it – inside one of these vehicles. The impact can be dramatic.

Second, shed your risk fear and invest. Don’t save. Surveys show the young are the most conservative when it comes to placing money, with the greatest fear of loss. They flock into HISAs and guaranteed investment certificates, where rates are low and taxes can be high. The better option is to stick your funds into low-cost ETFs (exchange-traded funds) based on equities (stock markets), and especially the S&P 500 (the major American index). Don’t sweat days when markets drop, or even look at fund values daily, weekly or monthly. Over time you’ll profit handsomely.

Third, forget real estate. Not worth it. Prices are stupid. Mortgage rates have not dropped enough. Sellers are greedy. Realtors are carnivorous. Governments are confused, with policies, incentives and taxes making the market worse. There’s no shame in renting, which is far cheaper than owning and allows the potential of materially improving personal finances. You are get flexibility, mobilit, cash flow and choices. No onerous upfront costs. No crippling commissions getting out. And mostly you avoid…

Debt. It’s your enemy. Fight it. Debt, obligations and borrowing are everywhere in our nation now. Households carry trillions in loans. Governments owe more trillions to bond-holders. Interest payments are hobbling families, corporations and politicians. Mortgages extend a quarter century – or a lifetime. Debt is an anchor, dragging you lower and lower on Nik Nanos’ sad little chart.

Finally, yeah, lots sucks at the moment. But you live in Canada, not Kiev or Rafah. You’re in a free nation, not Kim’s Korea or Putin’s oligarchy. You have a functioning democracy with vibrant choices and young leaders, not the battleground of crusty octogenarians. You don’t have a convicted sex abuser, fraudster and election denier facing dozens of criminal charges close to taking power. In Canada women are not told what to do with their bodies and riot police aren’t busting heads on uni campuses.

It’s not all perfect. It’s not all bad. You have powerful choices. Use them.

About the picture: “This is Stella,” writes Big Al, in Edmonton . “She is 8 years old and seated on her purpose-built dog lawn chair (made by Kuma).  All dogs ought to have one.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.