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    Default 20-something + Retirement = What?

    Dear Beyond,

    I'm a young 20-something with a starting career and decent pay. I have enough income to start saving up and possibly live out my dream of:

    - Seeing the world as much as I can
    - Having a house and two cars

    ...Possibly in the next 3-5 years for both dreams to come true.

    With that, I calculated that I can afford a house with my current salary and have some money left over for expenses, retirement, etc.

    Right now, I'm putting little retirement money (<$300 altogether/month) in my own TFSA, Mutual Funds RRSP and a work TFSA/RRSP. The rest is paying off my outstanding debt by the summer of this year (Kids will be kids, right?) and actual savings in my savings account.

    After July, I have no obligations.

    Nothing.

    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?

    I can try and do both but it's usually one trumping the other.

    I live with my parents because I'm on field duty most of the time so no point in buying a house or renting an empty place right now.

    Beyond ballers, please help.

    Sincerely,

    - Fork in a Road

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    It's historically one of the best times to get a mortgage as rates are very very low.
    Vettel's #1

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    Once.

    That's how many times you get to live. Why not do both? I go away 2 or 3 times/yr and have a house.

    Buy below your means, get roommates, let them finance your home while you explore the world.

    Zing.

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    As an advisor I see clients in this situation all the time. The correct answer is to save for both but set realistic goals. If you want to go on 1 trip/year budget for that trip and see how much you need to set aside monthly to reach that goal.

    If you want to buy a house do your homework, do you want to put 5% down or more? How long will it realistically take you to save that amount (plus more for closing costs, lawyers, furniture, home insurance, etc.). Then set aside that much money monthly to reach your goal. Buying a house isn't something to rush into and setting your timeline to buy appropriately is going to be the best move for you.

    Obviously, saving for a trip in 8 months is going to push back the ability to buy a house as quickly or buying a house sooner might mean you forfeit your trip until 2013. Hope that helps.

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    I'm almost in the same boat as you. I have a decent amount of equity and I haven't figured out what I want to do with it yet. I'm renting downtown right now and I'm pretty skeptical on the housing market in Calgary - with all the planned supply in the market, who knows what'll happen in a year or two? That said, with the potential increase of interest rates in a year, not sure which direction the housing market here will go. Even if I were to buy a house, I probably wouldn't get anything until 2013 (just so I have enough for a 20% down).

    I have a car - not a sports car or anything, but I currently have the opportunity to buy my dream S5 (obviously it'll deplete my cash flow for a bit); however, this would probably be a stupid thing to do right now...

    All in all, I'm just pooling cash together, trading on the markets a bit, and saving for the purpose of saving. Don't have a detailed breakdown of what I'll do with my savings, but in general, I do plan on pursing a 2 week backpacking trip (Asia or S. America), a Montreal/NYC trip, a Vegas trip, and potentially a week in Spain all in the next 12 months. Gotta do it when you're young, right? A lot of these trips are with friends who recently graduated from university and don't feel like getting career jobs yet, thus wanting to travel all over the world. In my mind, I think it's a lot harder to get a group of people together to make a big trip later on in your life because of obvious timing issues.

    These trips will obviously take a bit of cash, but I still plan to have enough for a down payment by spring next year. Whether I pull the trigger on the market is different question.

    I haven't taken account how much I'll spend this summer on golf though...which could be an exceedingly dangerous amount, right flipstah?

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    If you're out in the field, you should be able to save more then what you're saving now, as well as go on trips n such at the same time still. Are you a consultant, have a pimp or employee?

    What's your rotation? 2+2?
    Last edited by l/l/rX; 04-18-2012 at 10:04 AM.

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    Originally posted by A790
    Once.

    That's how many times you get to live. Why not do both? I go away 2 or 3 times/yr and have a house.

    Buy below your means, get roommates, let them finance your home while you explore the world.

    Zing.


    the great thing about being young is having roommates isnt weird. $500/month x a couple guys and you still have the freedom to go on your trip... or you can save like crazy over the next 5 years when others are covering the cost, dump all of that onto the house when you go to renew and bam, on your way to paying the place off in under 10 years...

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    As said save for both. Just make sure your down payment savings are in a spot you can't access while on a trip. Also keep this in mind, when you own a house, and have your career in motion, it's MUCH harder to do the big trips (ie spending a month in Europe, or South Pacific, or wherever). I regret not traveling in my 20's (we got our house when I was 25, shortly after I finished school), and although not impossible, it's highly impractical for us now.

    edit: Also, the older you get, the more you want to spend on vacation. At 34, I can't imagine sleeping in a hostel. I'll take a 4-5 star hotel thank you, lol.
    Last edited by Tik-Tok; 04-18-2012 at 10:08 AM.
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    Originally posted by ercchry


    the great thing about being young is having roommates isnt weird. $500/month x a couple guys and you still have the freedom to go on your trip... or you can save like crazy over the next 5 years when others are covering the cost, dump all of that onto the house when you go to renew and bam, on your way to paying the place off in under 10 years...
    Having roommates past 28 is a bit strange, nevermind when you are in your mid 30s and still trying to pay off a house.

    I guess it would work for someone who doesn't mind staying single well into their 30s.

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    Default Re: 20-something + Retirement = What?

    ...
    Last edited by Sugarphreak; 07-09-2019 at 03:40 PM.

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    Default Re: Re: 20-something + Retirement = What?

    Originally posted by Sugarphreak


    Think smaller... moderation is the key to almost every situation.

    Why do you need 2 cars right off the bat? Why do you need a house right off the bat? Why do you need to see the entire world in one shot?

    My suggestion would be buy into one of these pre-build condo's, then save up as much as humanly possible over the next 2 years while it is going up. When you move into your condo you will have a massive down payment, plus equity thanks to market growth while it is going up... get yourself a HELOC for 100K or so and use that to finance some worldy travels and stay on top of your bills. Condo's are easy to maintain while you are away, then you keep yourself in the housing market for later when you want to upgrade.
    I agree with most of this. I bought my place October 2011, won't take possession till 2013 sometime. I'm half way to my goal of 30k down. Also have a lot saved already for a downpayment on my realistic dream car. 3 trips planned this year (hk, europe, nyc). The field has made me save a ton of cash, I think you may have to revisit what your leisure spending is like.

    The only thing I do not agree with is leveraging your HELOC with a depreciating asset (your travels, my car). If anything I would buy another place with the equity. If you can't afford to travel with your own money don't do it. You never know when shit will hit the fan.

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    Originally posted by sputnik


    Having roommates past 28 is a bit strange, nevermind when you are in your mid 30s and still trying to pay off a house.

    I guess it would work for someone who doesn't mind staying single well into their 30s.
    i think you misread, you ditch the roommates at year 5 when you renew and your mortgage payment is now 1/3rd of what it once was

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    Default Re: Re: 20-something + Retirement = What?

    Originally posted by CapnCrunch
    It's historically one of the best times to get a mortgage as rates are very very low.
    True that. I haven't seen it this low ever.

    Originally posted by skandalouz_08
    As an advisor I see clients in this situation all the time. The correct answer is to save for both but set realistic goals. If you want to go on 1 trip/year budget for that trip and see how much you need to set aside monthly to reach that goal.

    If you want to buy a house do your homework, do you want to put 5% down or more? How long will it realistically take you to save that amount (plus more for closing costs, lawyers, furniture, home insurance, etc.). Then set aside that much money monthly to reach your goal. Buying a house isn't something to rush into and setting your timeline to buy appropriately is going to be the best move for you.

    Obviously, saving for a trip in 8 months is going to push back the ability to buy a house as quickly or buying a house sooner might mean you forfeit your trip until 2013. Hope that helps.
    Well my goal is 20% down which is feasible in about 3-5 years, and I'll be ~late-20's max. 10% is more doable but the insurance premium is blah.

    Originally posted by borN
    I'm almost in the same boat as you. I have a decent amount of equity and I haven't figured out what I want to do with it yet. I'm renting downtown right now and I'm pretty skeptical on the housing market in Calgary - with all the planned supply in the market, who knows what'll happen in a year or two? That said, with the potential increase of interest rates in a year, not sure which direction the housing market here will go. Even if I were to buy a house, I probably wouldn't get anything until 2013 (just so I have enough for a 20% down).

    I have a car - not a sports car or anything, but I currently have the opportunity to buy my dream S5 (obviously it'll deplete my cash flow for a bit); however, this would probably be a stupid thing to do right now...

    All in all, I'm just pooling cash together, trading on the markets a bit, and saving for the purpose of saving. Don't have a detailed breakdown of what I'll do with my savings, but in general, I do plan on pursing a 2 week backpacking trip (Asia or S. America), a Montreal/NYC trip, a Vegas trip, and potentially a week in Spain all in the next 12 months. Gotta do it when you're young, right? A lot of these trips are with friends who recently graduated from university and don't feel like getting career jobs yet, thus wanting to travel all over the world. In my mind, I think it's a lot harder to get a group of people together to make a big trip later on in your life because of obvious timing issues.

    These trips will obviously take a bit of cash, but I still plan to have enough for a down payment by spring next year. Whether I pull the trigger on the market is different question.

    I haven't taken account how much I'll spend this summer on golf though...which could be an exceedingly dangerous amount, right flipstah?
    I'm not doing any trading because I'm busy enough as it is watching the market like a hawk so I let mutual funds do my work, slowly but surely.

    Golf in the summer is dangerous lol. I'm planning a golf trip with some buddies and it'll add for sure haha.

    Originally posted by l/l/rX
    If you're out in the field, you should be able to save more then what you're saving now, as well as go on trips n such at the same time still. Are you a consultant, have a pimp or employee?

    What's your rotation? 2+2?
    10/4 and I'm a F/T employee for a contractor.

    Originally posted by A790
    Once.

    That's how many times you get to live. Why not do both? I go away 2 or 3 times/yr and have a house.

    Buy below your means, get roommates, let them finance your home while you explore the world.

    Zing.
    Originally posted by ercchry




    the great thing about being young is having roommates isnt weird. $500/month x a couple guys and you still have the freedom to go on your trip... or you can save like crazy over the next 5 years when others are covering the cost, dump all of that onto the house when you go to renew and bam, on your way to paying the place off in under 10 years...
    Originally posted by Tik-Tok
    As said save for both. Just make sure your down payment savings are in a spot you can't access while on a trip. Also keep this in mind, when you own a house, and have your career in motion, it's MUCH harder to do the big trips (ie spending a month in Europe, or South Pacific, or wherever). I regret not traveling in my 20's (we got our house when I was 25, shortly after I finished school), and although not impossible, it's highly impractical for us now.

    edit: Also, the older you get, the more you want to spend on vacation. At 34, I can't imagine sleeping in a hostel. I'll take a 4-5 star hotel thank you, lol.
    Originally posted by sputnik


    Having roommates past 28 is a bit strange, nevermind when you are in your mid 30s and still trying to pay off a house.

    I guess it would work for someone who doesn't mind staying single well into their 30s.
    I don't like roommates as I like having my own space (my nature) and I hate hostels lol.

    Originally posted by Sugarphreak


    Think smaller... moderation is the key to almost every situation.

    Why do you need 2 cars right off the bat? Why do you need a house right off the bat? Why do you need to see the entire world in one shot?

    Buying a big house is a huge soul crushing responsibility, and traveling the world without a care sabotages your long term financial future. I have a few freinds that did it right out of high school and are only getting on their feet in their 30's.

    My suggestion would be buy into one of these pre-build condo's, then save up as much as humanly possible over the next 2 years while it is going up. When you move into your condo you will have a massive down payment, plus equity thanks to market growth while it is going up... get yourself a HELOC for 100K or so and use that to finance some worldy travels and stay on top of your bills. Condo's are easy to maintain while you are away, or get a 2bdrm and have somebody else look after it while still having a place to call home; plus you keep yourself in the housing market for later when you want to upgrade.
    I guess there is NO rush on getting materials. Just live my life; go on vacations and save up little by little for that house. I don't want a condo because I realized that I am a house guy, with a want of a garage for my two cars haha.

    I don't have to do it all at once. I plan to do progressions but I'm just iffy on which one to start first.

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    Honestly - despite the likely ribbing by your friends, staying living at home for as long as possible makes a *huge* difference. I moved out as soon as possible. Renting was expensive enough, but owning your own house is ridiculously expensive when you consider the cost to maintain the place.

    My suggestion would be to stay at home for as long as is comfortable to do so. Save up the biggest down payment you can.

    Of course, that doesn't really answer your question as far as whether you should buy a house or use the money to vacation. I think that is a personal question that only you can answer... many people value things differently.

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    Default Re: Re: Re: 20-something + Retirement = What?

    Originally posted by flipstah


    I don't like roommates as I like having my own space (my nature) and I hate hostels lol.
    well you are home hardly ever right now right? do you see yourself doing the same thing in 5 years? if you do, let your money work for you. let others pay those bills so when you are ready for a shift you can just boot out your roommates and have a large chunk paid off for you instead of pinching pennies for the next 3-5 years living at your parent house

    that coupled with everything being low right now why not?

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    Or buy a house, rent it out (having others pay for it), live at home and do some travelling.
    In a few years, you can move in with some of the house paid off

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    Don't complicate it. Buy what you can afford and live within your means. Unless your job pays you a shit tonne you will have to make a compromise. Just keep it real and be realistic.
    Originally posted by rage2
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    Default Re: Re: Re: Re: 20-something + Retirement = What?

    Originally posted by Kloubek
    Honestly - despite the likely ribbing by your friends, staying living at home for as long as possible makes a *huge* difference. I moved out as soon as possible. Renting was expensive enough, but owning your own house is ridiculously expensive when you consider the cost to maintain the place.

    My suggestion would be to stay at home for as long as is comfortable to do so. Save up the biggest down payment you can.

    Of course, that doesn't really answer your question as far as whether you should buy a house or use the money to vacation. I think that is a personal question that only you can answer... many people value things differently.
    My friends don't care. In fact, most of them still live with their parents until we're all financially stable. They've started buying pre-built condo's and in a couple of years, will be off.

    I also have a different culture where moving out at 18 is bizarre so living at home isn't a problem. So long as I don't become a leech and live in the basement forever *shudder*

    Originally posted by ercchry


    well you are home hardly ever right now right? do you see yourself doing the same thing in 5 years? if you do, let your money work for you. let others pay those bills so when you are ready for a shift you can just boot out your roommates and have a large chunk paid off for you instead of pinching pennies for the next 3-5 years living at your parent house

    that coupled with everything being low right now why not?

    Originally posted by CD007
    Or buy a house, rent it out (having others pay for it), live at home and do some travelling.
    In a few years, you can move in with some of the house paid off
    I could do that but then it'll be a pain in the butt and a burden if I ever have to find tenants or fix issues with them or the house.

    Originally posted by max_boost
    Don't complicate it. Buy what you can afford and live within your means. Unless your job pays you a shit tonne you will have to make a compromise. Just keep it real and be realistic.
    I think I have to get a reality check and I can't get EVERYTHING I want so quickly. Patience is a virtue but I think travel first while I'm still young.

    I just hope I don't regret it when I'm 30-something. I saw some friends of mine travel right out of HS/university and just now, they're getting back to school or find their first job, struggling to start.

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    Originally posted by Kloubek
    Honestly - despite the likely ribbing by your friends, staying living at home for as long as possible
    Are you kidding? He's Filipino, he's expected to live at home until he buys a house and gets married, and then his parents move in with him
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    Like most kids flipstah is all over the map. Live, learn and grow. Stop trying to plan every single step of your life. Going with the flow doesn't hurt. That doesn't mean you just sit back and smoke weed all day lol It means don't get paralysis from over analysis.
    Originally posted by rage2
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