will inevitably slow.

The Royal Bank of Canada did some research in early 2006 and found that 90% of Canadians surveyed viewed buying a home as a good investment and that almost one in five expected their home to be their primary source of retirement income.

However, I was not shocked by those statistics. Why?

Because it is “The Canadian Way”.

Most Canadians have the bulk of their net worth ti

Have you taken stock of your net worth recently? If you have you are probably feeling pretty smug.

Recent returns in both the residential real estate and equity markets have many Canadians feeling flush. So much so, that many are spending their windfalls and traditional savings have dropped to almost nil. (Savings in 1990 was 13% of income now it is less than 1%.)

According to a recent TD Canada Trust study over the past 25 years housing prices have risen an average of 5.6% a year. However, with an average inflation rate of 3.7% over that same period the real increase is only 1.9% a year!

One has to wonder if this trend will continue. And if so, how are Canadians going to meaningfully increase their nest eggs as they work toward their retirements?

(I did my own research and if you want to see how various asset classes have performed over the past 21 years you can download it here. http://HowToGetRidOfYourMortgage.com/AssetClasses.pdf Just “right click” and “save as” to your “desktop”)

Something else to consider is “the baby boomers”. Remember them?

They are beginning to retire and as these demographic pressures continue to build there will be more pressures on the housing market - downwards. The beginning of the “boomer generation” are already downsizing and investing the difference in assets that produce income to fund their newly found retirement lifestyle.

With the housing-driven wealth effect unlikely to be sustained and with equity markets probably reverting to single digit returns over time, many Canadians will have to revisit their investment strategies as the heady pace of real estate and stock market gains will inevitably slow.

The Royal Bank of Canada did some research in early 2006 and found that 90% of Canadians surveyed viewed buying a home as a good investment and that almost one in five expected their home to be their primary source of retirement income.

However, I was not shocked by those statistics. Why?

Because it is “The Canadian Way”.

Most Canadians have the bulk of their net worth tie

y over the past 25 years housing prices have risen an average of 5.6% a year. However, with an average inflation rate of 3.7% over that same period the real increase is only 1.9% a year!

One has to wonder if this trend will continue. And if so, how are Canadians going to meaningfully increase their nest eggs as they work toward their retirements?

(I did my own research and if you want to see how various asset classes have performed over the past 21 years you can download it here. http://HowToGetRidOfYourMortgage.com/AssetClasses.pdf Just “right click” and “save as” to your “desktop”)

Something else to consider is “the baby boomers”. Remember them?

They are beginning to retire and as these demographic pressures continue to build there will be more pressures on the housing market - downwards. The beginning of the “boomer generation” are already downsizing and investing the difference in assets that produce income to fund their newly found retirement lifestyle.

With the housing-driven wealth effect unlikely to be sustained and with equity markets probably reverting to single digit returns over time, many Canadians will have to revisit their investment strategies as the heady pace of real estate and stock market gains will inevitably slow.

The Royal Bank of Canada did some research in early 2006 and found that 90% of Canadians surveyed viewed buying a home as a good investment and that almost one in five expected their home to be their primary source of retirement income.

However, I was not shocked by those statistics. Why?

Because it is “The Canadian Way”.

Most Canadians have the bulk of their net worth ti

set classes have performed over the past 21 years you can download it here. http://HowToGetRidOfYourMortgage.com/AssetClasses.pdf Just “right click” and “save as” to your “desktop”)

Something else to consider is “the baby boomers”. Remember them?

They are beginning to retire and as these demographic pressures continue to build there will be more pressures on the housing market - downwards. The beginning of the “boomer generation” are already downsizing and investing the difference in assets that produce income to fund their newly found retirement lifestyle.

With the housing-driven wealth effect unlikely to be sustained and with equity markets probably reverting to single digit returns over time, many Canadians will have to revisit their investment strategies as the heady pace of real estate and stock market gains will inevitably slow.

The Royal Bank of Canada did some research in early 2006 and found that 90% of Canadians surveyed viewed buying a home as a good investment and that almost one in five expected their home to be their primary source of retirement income.

However, I was not shocked by those statistics. Why?

Because it is “The Canadian Way”.

Most Canadians have the bulk of their net worth ti

f the “boomer generation” are already downsizing and investing the difference in assets that produce income to fund their newly found retirement lifestyle.

With the housing-driven wealth effect unlikely to be sustained and with equity markets probably reverting to single digit returns over time, many Canadians will have to revisit their investment strategies as the heady pace of real estate and stock market gains will inevitably slow.

The Royal Bank of Canada did some research in early 2006 and found that 90% of Canadians surveyed viewed buying a home as a good investment and that almost one in five expected their home to be their primary source of retirement income.

However, I was not shocked by those statistics. Why?

Because it is “The Canadian Way”.

Most Canadians have the bulk of their net worth ti

will inevitably slow.

The Royal Bank of Canada did some research in early 2006 and found that 90% of Canadians surveyed viewed buying a home as a good investment and that almost one in five expected their home to be their primary source of retirement income.

However, I was not shocked by those statistics. Why?

Because it is “The Canadian Way”.

Most Canadians have the bulk of their net worth tied up in their house.

In my mind, the real benefit a home gives is a disciplined savings habit. However, one shouldn’t have all their eggs in one asset class. Remember the importance of "diversification”?

Furthermore, many Canadians practice the notion that “all debt is bad” and use various payment options to pay down their mortgage faster. This is a strategy that is akin to shoveling money into a bank account that pays 0% interest. Why would one want to do that?

Canadians are vastly over invested in the real estate markets and have deep emotional attachments to how they deal with their mortgages.

I believe that while that is certainly one option it shouldn’t be THE only one to rely upon. A house should be seen only as one potential source of income along with pensions, RRSPs and other investments.

Get your FREE copy of "The UnCanadian Way To Be House Rich AND Cash Rich" at: http://HowToBeSetForLife.com/HouseRichJV.html

If and when asset classes such as commodities and real estate begin to slow from their recent torrid growth what will happen to these Canadians who have come to rely on these strong markets to increase their wealth?

I believe that they are going to have to either readjust their expectations of retirement OR begin to take corrective action now.