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Thread: 20-something + Retirement = What?

  1. #41
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    good approach! I use to do roughly the same. Most of my money went into RRSP's and then my TFSA on a weekly basis. Then I went consultant now everything just goes into my TFSA until this is maxed out. I have plenty of room in my TFSA though so it'll take me a while to max it out. Also since my mom day trades, I give her money on a weekly basis which will eventually go towards my down payment on my condo. Aiming for 30k, close to half way.

    Just hold off on all your big purchases for a bit, save and have a safety net, you're a hoe and im a consultant, we're going to be the ones getting fired first if the economy goes to shit. I started working my job 1.75 years ago, after saving diligently, everything I want is in my grasp. Car, condo and 3/4 big trips this year left to do.

    You're project controls right?
    Last edited by l/l/rX; 04-18-2012 at 08:48 PM.

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    Best Financial advice I can give you.........don't EVER get married!
    "if you disagree with my views are cannot adequately my criticism then ignore my posts." - Nusc

  3. #43
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    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.


    Please PM me your real name to confirm account, otherwise I'm gonna contact a mod about your account being hijinked.

    The real Max would advise OP to purchase as big of a house he can make payments on, then start planning his trips, pick out the cars he wants; then HELOC that shit.

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    Originally posted by Type_S1
    LOL excluding all those things take 5 years off how long it will take you to pay down, you can't exlude them.
    Obviously. I was just doing some very rough math to show you can't expect to pay off at 300K place in 10 years just because you have a roommate. I'm definitely not saying you can ignore these costs, just wanted to use some simple numbers to discard the 10 year idea.

    Originally posted by Type_S1
    I don't understand your statement about not having 20% down means you can't afford the home?

    Average starter home say 350k...20%=70k down. Saving 70k would take someone a very long time unless they are making sick cash. Let's take someone making 80k a year with no debt just starting their career. They would be easily able to pay a mortgage but take probably 3 years (maybe more) to save and get 20% down.

    I don't know about you but I sure wouldn't want to live in mommys basement for that long.
    I understand that might be an unpopular point of view, but it's my fiscally conservative view. Banks will certainly loan you more, but I believe if you can't save up $70K, or have a mortgage to pre-tax income ratio of 4:1 or less, or have to pay mortgage insurance (ever), or need anything above a 25 year mortgage, you cannot afford that house house. If you make $80K, a $350K house is outside your range. Obviously a bank will give you a that loan, but I believe the issue is over-extending yourself and being "house poor." Calgarians have a view that they are "entitled" to home ownership; I don't think that's the case any more. Think about how much your life will blow if all your money is going into paying off your mortgage and you can't enjoy life. Not for me.

    The other issue is housing prices are still so high because interest rates are so low. Central bank announced today we should see rates starting to go down from 2012 to 2014. Natural market logic is to see prices drop. If they don't drop, we've got a far bigger problem called a "bubble", in which case buying would be disastrous. I'd much rather buy at a lower price in a couple years having saved up some money than get double screwed by buying high AND having to renew at a higher interest rate in 5 years.

    Also, nowhere did I ever suggest living in mommy's basement for the next couple years. Get a roommate and move out and rent for a while when it makes sense to do so. I've rented for 5 years. If I had bought any time in the last 5 years, I'd be looking at a bigger loss in equity than I paid in rent (spare the last year where it's been flat).

  5. #45
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    Originally posted by Feruk

    The other issue is housing prices are still so high because interest rates are so low. Central bank announced today we should see rates starting to go down from 2012 to 2014. Natural market logic is to see prices drop. If they don't drop, we've got a far bigger problem called a "bubble", in which case buying would be disastrous. I'd much rather buy at a lower price in a couple years having saved up some money than get double screwed by buying high AND having to renew at a higher interest rate in 5 years.
    Not to get off topic, but I'm really questioning this myself nowadays. Just from a brief scan on a bunch of articles, the relationship between interest rates and housing prices don't really hold true. Consensus is that only a major change in interest rates would change housing prices. At the 1% interest rate today, a double is only an increase to 2% which won't really change much in the housing market. Prices are sticky and very long term (especially in real estate), so I'm kind of leaning towards the thought that Calgary prices won't really change that much come 2013 after a bump in the rate...

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    Originally posted by Feruk
    If you can't put 20% down, you can't afford the house IMO.

    Interesting opinion. Unfortunately millions of people have proven you wrong.

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    Originally posted by CapnCrunch


    Interesting opinion. Unfortunately millions of people have proven you wrong.
    Just because millions of people put down less than 20% doesn't make his opinion wrong. I agree - if you need CMHC, you can't afford the place

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    Originally posted by l/l/rX
    Just hold off on all your big purchases for a bit, save and have a safety net, you're a hoe and im a consultant, we're going to be the ones getting fired first if the economy goes to shit. I started working my job 1.75 years ago, after saving diligently, everything I want is in my grasp. Car, condo and 3/4 big trips this year left to do.

    You're project controls right?
    I am in PC and so far, I'm prepping for the worst. That's why I'm trying to be in the black ASAP and have no obligations by the summer.

    I guess it's time to hold off the dreams until I'm more financially stable.

    20% down?! That's gonna take a while lol.

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    Originally posted by CapnCrunch
    Interesting opinion. Unfortunately millions of people have proven you wrong.
    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...

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    Originally posted by borN
    Not to get off topic, but I'm really questioning this myself nowadays. Just from a brief scan on a bunch of articles, the relationship between interest rates and housing prices don't really hold true. Consensus is that only a major change in interest rates would change housing prices. At the 1% interest rate today, a double is only an increase to 2% which won't really change much in the housing market. Prices are sticky and very long term (especially in real estate), so I'm kind of leaning towards the thought that Calgary prices won't really change that much come 2013 after a bump in the rate...
    I think it's a matter of less buyers being able to come to the table (at these prices) when rates go up. Especially when you mix that together with tightening of lending practices, ie the elimination of 35 year mortgage and possible elimination of 30 year.

  11. #51
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    Originally posted by rotten42
    Best Financial advice I can give you.........don't EVER get married!
    Uhm, not only is this the best financial advice in this thread, it's the best bit of general life advice - period.

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    Originally posted by Z_Fan


    Uhm, not only is this the best financial advice in this thread, it's the best bit of general life advice - period.
    I've been hearing a lot of this lately. I've been paying close attention as well.

    Anyway OP, I may have missed this - Does your job contribute anything?

    I got 12% RRSP Unmatched from the company. This is great because it still dumps a big amount into a "retirement" spot and then I have my own cash to do stuff with.

    Maybe instead of a next raise ask for something like that, I don't know.

    You can get a lot more from a company then just dollars/hr if you ask!
    "The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents... some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new Dark Age."

    -H.P. Lovecraft

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    Originally posted by Darkane


    I've been hearing a lot of this lately. I've been paying close attention as well.

    Anyway OP, I may have missed this - Does your job contribute anything?

    I got 12% RRSP Unmatched from the company. This is great because it still dumps a big amount into a "retirement" spot and then I have my own cash to do stuff with.

    Maybe instead of a next raise ask for something like that, I don't know.

    You can get a lot more from a company then just dollars/hr if you ask!
    My job does pension contributions equiv. to 5% of salary, not fully vested in my name until 2 years of continuous service.

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    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/

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    For the skeptics, here's a shot of my excel file. Year 16, passive income exceeds expenses = Retirement!



    OP, I can send you the excel file if you want, or you can make it yourself, only took me 5 mins.
    Last edited by a social dsease; 04-19-2012 at 12:34 PM.

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    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/
    Although I applaud your ambition, don't try.

    My dad tried it, "retired" at 44. Wasn't the best Idea.

    Considering our 'new' extended life span, we're talking being retired for 50 years!

    I myself, considering doing it at 50. So If I live till 80 which is AT least what we're projected on living.. well then thats 30 years!

    Don't use the CURRENT age expectancy. Add 10-20 years to it, and take out Gov't Pensions and Old age security - those won't exist for us
    "The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents... some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new Dark Age."

    -H.P. Lovecraft

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    Originally posted by a social dsease
    For the skeptics, here's a shot of my excel file. Year 16, passive income exceeds expenses = Retirement!



    OP, I can send you the excel file if you want, or you can make it yourself, only took me 5 mins.
    You're gonna be single till 40 eh? No children, GF's, Other family obligations ?
    "The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents... some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new Dark Age."

    -H.P. Lovecraft

  18. #58
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    Darkane, by retired I don't mean that I would sit around at home and do nothing all day. I simply mean that I would no longer need to work a regular job to cover my living expenses. Perhaps "financial independence" is a better term than "retirement".

    If I wanted to continue to work, then I could certainly do that. But the key is, if I didn't want to go to work, then I wouldn't have to. Most likely I would work part-time to keep from getting bored!

    *Edit: I already do have a GF and a mortgage. I do plan on having kids, although I don't expect them to change the numbers too significantly. Kids don't really start to cost alot of money until age 5 or so, and by that time my mortgage would be paid off. The money that I would have put into my mortgage would go to my kid. The total monthly expenses would remain roughly the same. This is a rough spreadsheet, it will obviously be subject to change. My retirement age might be off by a few years, but thats still better than working until 65!*

    *Edit 2: Also, it doesn't matter how old I live. My model has me living solely off the interest, the principal is never touched and would remain as a safety net in case anything ever happened.

    I'd highly recomend checking out the link I posted. I never even though of doing something like this until a couple months ago when I read his website, but when I saw how easy it was, I decided to do the same!*
    Last edited by a social dsease; 04-19-2012 at 12:49 PM.

  19. #59
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    Originally posted by a social dsease
    Darkane, by retired I don't mean that I would sit around at home and do nothing all day. I simply mean that I would no longer need to work a regular job to cover my living expenses. Perhaps "financial independence" is a better term than "retirement".

    If I wanted to continue to work, then I could certainly do that. But the key is, if I didn't want to go to work, then I wouldn't have to. Most likely I would work part-time to keep from getting bored!

    *Edit: I already do have a GF and a mortgage. I do plan on having kids, although I don't expect them to change the numbers too significantly. Kids don't really start to cost alot of money until age 5 or so, and by that time my mortgage would be paid off. The money that I would have put into my mortgage would go to my kid. The total monthly expenses would remain roughly the same. This is a rough spreadsheet, it will obviously be subject to change. My retirement age might be off by a few years, but thats still better than working until 65!*
    You've obviously thought about this, and it's also obvious there's some other motivating factors behind it. So I'll leave it at that.

    Just don't let life get away from you living like that until you have grey pubes. For Serious.
    "The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents... some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new Dark Age."

    -H.P. Lovecraft

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    Posting for the dot because I have a feeling the above is going to cause a ruckus.

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