When you think you're rich, you're more likely to spend more. And when you're not so confident about money, you may hold back and save. This is how the wealth effect works. But are there any risks to this effect? On today's podcast Doug Hoyes and Ted Michalos give real-life examples of how the wealth effect works and why it may cause you unwanted debt problems if you're not careful. Tune in for a great discussion.
Links:
Are Wealth Effects Important For Canada? https://www.bankofcanada.ca/wp-content/uploads/2010/06/pichettee.pdf
Podcast 435 – Why Are Consumer Insolvencies Back Up? https://youtu.be/3i22JpmcozY
