20-something + Retirement = What?

[CapnCrunch]

Originally posted by Feruk

A lot of people in the USA proved me wrong too. That's led to millions of bancrupcies and almost a meltdown of the financial system. Only reason banks in Canada give loans to anyone without 20% down is that these loans are backed by the CMHC, leaving the bank with very little liability if you default. You then pay mortgage insurance which protects the bank from you defaulting. That doesn't sound like affordability to me...

Okay then.

Why are you ignoring the last 40 years of people getting 5% mortgages and not defaulting on them, and instead only choosing the recent worldwide economic recession to make your point, using only the USA to validate your opinion?

CHMC makes billions a year for the government. How could they be making that much money if everyone can't afford their homes?

Oh wait, are you just making up bullshit to get people to agree with you.

Or are you just trying to brag up your large down payment on the internet?

[arian_ma]

Originally posted by CapnCrunch


Okay then.

Why are you ignoring the last 40 years of people getting 5% mortgages and not defaulting on them, and instead only choosing the recent worldwide economic recession to make your point, using only the USA to validate your opinion?

CHMC makes billions a year for the government. How could they be making that much money if everyone can't afford their homes?

Oh wait, are you just making up bullshit to get people to agree with you.

Or are you just trying to brag up your large down payment on the internet?

You're trying to rip on the guy for having opinions and sticking to them while you are doing exactly what you're hating on. It's his (and mine and many others') opinion that currently, buying a house in Calgary is not the best move. You think otherwise? Go buy a house with 5% down at 35 years, and if the rates jump 3% over the next few years and your payments effectively double (just like what happened in the USA as Feruk is saying) then we can talk. 5% at 40 is what got the Americans in trouble and that has not been around for 40 years, hence why Feruk is using the USA as an example for why Canada is screwed.

The last time that people tried to buy houses like this was the 80s, and I'm sure you know what happened then, right? Cheap money doesn't make it smart money.

[Mys73ri0]

Originally posted by CapnCrunch


Okay then.

Why are you ignoring the last 40 years of people getting 5% mortgages and not defaulting on them, and instead only choosing the recent worldwide economic recession to make your point, using only the USA to validate your opinion?

CHMC makes billions a year for the government. How could they be making that much money if everyone can't afford their homes?

Oh wait, are you just making up bullshit to get people to agree with you.

Or are you just trying to brag up your large down payment on the internet?

http://en.wikipedia.org/wiki/Fannie_Mae
http://en.wikipedia.org/wiki/Freddie_Mac

Bringing up what has happened over the last 5 years is very relevant not 'bullshit'. 40,35,30 year am's on mortgages with such low interest rates were never really available in the past. If you look at the math behind it, it is set up for failure although the gov has started to scale back on the rules.

Originally posted by flipstah

My dilemma is, I can either start saving for a trip this Christmas or a downpayment for a house.

As a 20-something, which should I focus on more: thinking about retirement or going on trips and shit?

What do you think will help you more in 20 years? The fact you owe that much less on your mortgage or some trip you took during Christmas?

[max_boost]

Wow you guys. Retiring at 35? 40? 45? 50? All depends on your lifestyle and expenses I guess I can't even consider something like that. I like to keep busy and I'll be bored as fuck, not to mention I'll plow through my savings so fast haha

[Mibz]

Originally posted by Mys73ri0
What do you think will help you more in 20 years? The fact you owe that much less on your mortgage or some trip you took during Christmas?

By this logic nobody should ever have fun.

[CapnCrunch]

Originally posted by arian_ma

You're trying to rip on the guy for having opinions and sticking to them while you are doing exactly what you're hating on. It's his (and mine and many others') opinion that currently, buying a house in Calgary is not the best move. You think otherwise? Go buy a house with 5% down at 35 years, and if the rates jump 3% over the next few years and your payments effectively double (just like what happened in the USA as Feruk is saying) then we can talk. 5% at 40 is what got the Americans in trouble and that has not been around for 40 years, hence why Feruk is using the USA as an example for why Canada is screwed.

The last time that people tried to buy houses like this was the 80s, and I'm sure you know what happened then, right? Cheap money doesn't make it smart money.

Rates didn't double in the US. The US got in trouble because people got into teaser sub prime loans with 0 down, because they couldn't qualify for the normal rates. Then the sub prime term expired, they had to renew at normal rates, and they couldn't afford it. It had absolutely nothing to do with having a 5% down payment. If everyone had been forced (as an absolute minimum) to qualify for a 40 yr with 5% down, none of this would have happened.

I swear I'm debating with retards in here.

[JLau]

Seeing the world is obviously important, especially if you have any intention about starting your own business later on.

If i were you, i would get a cheap car, where you can pay off in cash (5000-10000 max?). Go on shorter trips for now, until you start making more money, and really decide what you wanna do in the future. I dont think you need to buy a house yet to tie yourself down, unless if you are looking at cheaper townhomes or condos.

[flipstah]

I'm not going to buy a house if I'm going to be sheltered for life. If that's the case, fuck it.

I'm looking to get a balance but wasn't sure on which one to start first. Thanks to this discussion, I'm set on just saving up as much as I can, paying off my debt by this summer, and just be glad I have no obligations after that.

Then, just enjoy life while I'm still young because a house can be bought later on but not your youth.

[JLau]

Those are the beyond ballers, i dont plan on retiring until 60 or so, if i have a awesome job by then, i might not even retire until later on lol

as long as you can continue winning CCR, you wont have to worry about buying porsches lol

Originally posted by max_boost
Wow you guys. Retiring at 35? 40? 45? 50? All depends on your lifestyle and expenses I guess I can't even consider something like that. I like to keep busy and I'll be bored as fuck, not to mention I'll plow through my savings so fast haha

[Type_S1]

Originally posted by max_boost
Wow you guys. Retiring at 35? 40? 45? 50? All depends on your lifestyle and expenses I guess I can't even consider something like that. I like to keep busy and I'll be bored as fuck, not to mention I'll plow through my savings so fast haha

Some people have ambition and enjoy a challenge...others want to watch TV on the couch and get fat!

Usually people who make enough to retire at that age never do because they are the first type of person I mentioned!

[A790]

Originally posted by a social dsease
OP, I'm in a similar position to you. 24 yrs old, just started my career, decent pay.

My goal is to be fully retired by age 40.

If you run some simple numbers in excel, its not really very difficult to do. Simply live as frugally as possible, and save the rest!

My current living expenses are about $24,000/yr including food, mortgage, car etc, the rest goes into savings. If I assume a 5% annual return on my savings, 5% annual wage increase, and a 3% annual increase in my spending (to account for inflation), my passive income generated on my savings should exceed my living expenses sometime in my late thirties. I'll work a few more years in order to afford some fun toys, and then.... Retirement. I'll have my 40's, 50's, 60's etc to do as I please!

Of course this means no fancy cars, no travelling the world for 12 months, no speedboats or RV's, and definitely no consumer debt of any kind, but I think it will be worth it when I retire 25 yrs before most of my peers.

If early retirement is something that appeals to you, check out this website. Its about a dude who retires at age 34! http://www.mrmoneymustache.com/2011/...oney-mustache/

If you think you're going to get a 5% wage increase every year... haha. Good luck with that. You might the first few years, but then you'll find this thing called the "glass ceiling".

Lots of assumptions. We'll see how the real world treats you.

[arian_ma]

Originally posted by CapnCrunch


Rates didn't double in the US. The US got in trouble because people got into teaser sub prime loans with 0 down, because they couldn't qualify for the normal rates. Then the sub prime term expired, they had to renew at normal rates, and they couldn't afford it. It had absolutely nothing to do with having a 5% down payment. If everyone had been forced (as an absolute minimum) to qualify for a 40 yr with 5% down, none of this would have happened.

I swear I'm debating with retards in here.

You are saying that people borrowed at subprime rates (just to get them approved IE maxing their ability to pay back the mortgage) and when the rates changed they couldn't pay it any longer.

I am saying that people borrowed at low rates (maxed out their ability to pay back with 40 year mortgages and minimal down payment) and once their rates change in 5 years time they won't be able to pay their mortgage any longer.

Edit: Also, there is subprime borrowing in Canada as well as effective 0% down payments.

I didn't say rates double, I said their payments doubled due to an increase of a couple of points in their interest rates (which is exactly what's going to happen for anyone borrowing at 3% right now)

Don't call me a retard, makes you look stupid.

[Feruk]

Originally posted by CapnCrunch
Rates didn't double in the US. The US got in trouble because people got into teaser sub prime loans with 0 down, because they couldn't qualify for the normal rates. Then the sub prime term expired, they had to renew at normal rates, and they couldn't afford it. It had absolutely nothing to do with having a 5% down payment. If everyone had been forced (as an absolute minimum) to qualify for a 40 yr with 5% down, none of this would have happened.

I swear I'm debating with retards in here.

And what exactly are today's rates if not the equivalent of "teaser rates?" In 5 years, they'll be at least a couple percentage points higher. So really, it's very much like what happened in the USA. Seems like a damn good comparison to me. But don't take my word for it, look at the banks. NO BANK in Canada would even consider giving anyone with 5% down a mortgage without CMHC insuring the loan. They wouldn't take on that kinda risk. Also if you think 40 year 0% down mortgages did not exist in Canada, you're delusional. What was done here is a 5% down payment, and the bank issuing a 5% "cash incentive" right back to that person on signing, effectively making it 0%. Simple google search would've taught that. Oh and your argument that the CMHC makes a billion dollars a year is meaningless. A billion dollars would only ensure 2,860 MORTGAGES (assuming 350k avg)!! Chump change.

I'm not on here to brag about the size of my down payment or anything else for that matter. Just wanted to introduce some common sense and basic math into the equation to those that feel they are entitled a house but can't understand what affordability is.

[mrsingh]

Project Controls sucks Flipstah, you need to get a real career. You will need a "Baller Job" to get all that!

[flipstah]

So much mortgage hate. It's not what I had in mind!

Originally posted by mrsingh
Project Controls sucks Flipstah, you need to get a real career. You will need a "Baller Job" to get all that!

How I got suckered into continuing, I'll never know.

[mrsingh]

Originally posted by flipstah
So much mortgage hate. It's not what I had in mind!





How I got suckered into continuing, I'll never know.

That guy who suckered you in must have been a real goofball!

[flipstah]

Originally posted by mrsingh


That guy who suckered you in must have been a real goofball!

Try working with him.

I keed!

[JDMsomething]

Why not have it all? Don't let people crush your dreams telling you to live below your means etc. EXPAND your means, and your way of thinking.

I didn't read all 4 pages but I doubt these options were mentioned:

1. Since you are living at home, you don't NEED to buy a house, but want to start building equity right? LOOK FOR A SMOKING DEAL. Work with good realtors, look on Comfree Etc. You might only find one every 2-3 months, but you are in no rush anyways.

Lets say you can find a great deal on a house worth $300,000 for a 20% discount of $240,000. You put 5% down(12,000) but your mortgage amount will be almost $235,000 with CMHC fees. Guess what?!?!! A couple months after you close, if it is still worth $300,000 or say you fixed it up and now it is worth $320,000 you can refinance and get 80% of the NEW appraised value as a loan.

So at $320,000 @ 80% LTV you would get $256,000. So you actually get about $21,000 back after paying out your existing mortgage, at crazy low interest rates, and still have your 20% equity.

An important point to note is when getting your first 5% down mortgage make sure it is open, or it is just a 3 month interest only payout penalty so when you get the new financing it is easy and cheap to payout.

For this to work you NEED TO BUY RIGHT. But don't be fooled, these deals are out there, some might need some work, but if the numbers work, who cares?

2. There are lots of people out there for whatever reason need to move, have a huge payout penalty and you can still assume their mortgage, some even for 0 down. This is a little more complex and I would only recommend it if you are dealing with a realtor who has done these before or a competent lawyer.

3. I also think it is a good idea to rent your place out at least partially. Why not look for houses that have a separate back entrance etc so you could make a suite or in law suite at least and rent to a buddy. That way you still have separate spaces, but you can offset your costs.

And to all the people who are saying "If you don't put 20% down, you can't afford the place." So dumb....by that logic if you can't put 100% down, you can't afford the place.

You need to think bigger to achieve your dreams, not smaller.

[chkolny541]

Originally posted by flipstah


Then, just enjoy life while I'm still young because a house can be bought later on but not your youth.

Incredible advice, i think your making a good decision!

[max_boost]

Originally posted by ― Dalai Lama XIV


“Man surprised me most about humanity.Because he sacrifices his health in order to make money.
Then he sacrifices money to recuperate his health.And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.”

Studies have found $75K gross/year is the current optimal salary for happiness. Over that, it won't make you any happier. Take it from me and everyone else. Find that balance and enjoy your life. Be open to things and learn. Having more money will improve your long term outlook but it's so important to live in the here and now.