A new report shows Canadians are some of the richest people in the world, but we need to change our personal financial habits because we are taking on too much debt.
According to the fifth global wealth study released this week by financial service company Allianz, Canada ranks eighth in net per-capita financial assets at about $94,000. Switzerland is No. 1 at more than $207,000.
Worldwide, growth of private household assets grew by 9.9 per cent in 2013, the highest rate of growth since 2003. The reports said growth was driven by exceptional gains on the stock markets in Japan, North America and Europe. In Canada, assets held in securities were up 12.6 per cent in the year and the gross asset base of private households is up 34 per cent since 2007.
However, the report warns that "the financial situation of Canadian households is anything but sustainable."
Canadian households are at a historic per-capita debt level of more than $50,000 and our debt to disposable income ratio is at an all-time high. For every dollar of disposable income, the average Canadian has $1.70 of debt. "Rising interest rates, a labor market slump or falling house prices could pose a serious threat to the solvency of highly-indebted households."
These are all circumstances the Bank of Canada has repeatedly warned Canadians about.
