IRE240H1 Lecture Notes - Lecture 3: Registered Retirement Savings Plan, Wealth Concentration, Stock Market
19 Oct 2016
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Document Summary
Wealth is a stock of assets whereas income is an annual flow. Wealth = total assets - total liabilities. Main data source is statistics canada"s survey of financial security: 16000 family units surveyed, all family units, including unattached individuals. In the 45 years period since 1970 there have been seven stats can wealth surveys: Surveys occur about once every seven years (except missed 1992) Composition of assets include: (dist 2012, middle quintile) Real estate (47% of total assets: principle residence and other real estate. Other assets (31% of total assets: stocks, bonds, mutual funds, bank accounts, rrsps, resps, vehicles, household possessions, value of family businesses, other financial& non-financial assets. Composition of liabilities include: (dist 2012, middle quintile) Mortgage debt on principal residence and other real estate (77%) Consumer debt (23%): credit card debt, vehicle loans, bank loans including lines of credit, other debts. Actual present value decreased to discounting but increased due to indexing for inflation.
