Money doesnt go to far

[The Cosworth]

I just found out my new monthly pay from my work today, so as I sit and watch tv I am doing my new budget.

Does anyone else notice that making money really doesn't seem to stretch to far? When I was a kid, I always thought making over 3500 a month would be badass and I could buy a new BMW and have a house.

With all my bills, saving for RRSP's, paying off student loans, saving for a new car and saving for a trip, I am completely out of money.

It makes me wonder on how anyone can afford to do anything... Anyone know of any good tips they could give?

I did a calculation and if I want to have 50,000 equivalent dollars when I am 65 (44 yrs from now) I need to save 11,000 a year for the next 44 years, so thats over 950 a month.

[benyl]

Dude, ever heard of compound interest? If you start saving early, you don't have to save as much.

Every time I get a raise, I think, now I will have some money. But something always comes up and I never get farther ahead. Ahhh, such is life.

[The Cosworth]

Originally posted by benyl
Dude, ever heard of compound interest? If you start saving early, you don't have to save as much.

Every time I get a raise, I think, now I will have some money. But something always comes up and I never get farther ahead. Ahhh, such is life.

The 11000 a year is taking into account an 8% compound interest and 3% yearly inflation.

Yeah i just wanted to get a new car now that I am graduating post secondary, and I can barley afford to do everything. I do now, let alone get a new car/save for a house.

[joyridder]

Learn to pay yourself first! I save 15% on average if I can. Its always good to have separate "accounts" if you call it. Your paying off bills but still taking into consideration that a bit of "play" time is important too. Calgary is getting very expensive, but eventually hard work will pay off in the end...

[Schwa]

Don't go on trips?

[BlackArcher101]

Originally posted by brendankharris
With all my bills, saving for RRSP's, paying off student loans, saving for a new car and saving for a trip, I am completely out of money.

It makes me wonder on how anyone can afford to do anything... Anyone know of any good tips they could give?

Wait... so you say you are paying off debts, buying a new car, and going on a nice vacation. Then you ask how anyone can afford to do anything? Umm.... you are doing something and not everyone can even say that.

What more do you want? 3 million dollar home?

[Mixalot27]

Originally posted by brendankharris
I did a calculation and if I want to have 50,000 equivalent dollars when I am 65 (44 yrs from now) I need to save 11,000 a year for the next 44 years, so thats over 950 a month.

The first step to learning how to better manage your money would be to learn how to do math. 11 000 for 5 years gives you 55 000 with no interest. Maybe your investment adviser is ripping you off. :rofl:

[The Cosworth]

Originally posted by BlackArcher101


Wait... so you say you are paying off debts, buying a new car, and going on a nice vacation. Then you ask how anyone can afford to do anything? Umm.... you are doing something and not everyone can even say that.

What more do you want? 3 million dollar home?

Im not talking a nice trip or anything. I am planning on going somewhere every two years, so two xmas's from now I want to go to mexico for a week.

I was hoping to get a newer car but I doubt it will happen, I just want to know how some people do it because on here some people have nice shit and I dont know how. (PS my student loans are 650 a month but will have them paid off right before xmas)

I dont need advice on my dreams, I know they are manageable, I am just suprised on the retirement costs mostly

[The Cosworth]

Originally posted by Mixalot27


The first step to learning how to better manage your money would be to learn how to do math. 11 000 for 5 years gives you 55 000 with no interest. Maybe your investment adviser is ripping you off. :rofl:

Im not going to retire for one year than die

This is calculated with a 3% inflation in 60 years (so it is actually 135,000 a year) and I planned to live 20 yrs past retirement, so actually its just under 2.7 million

[finboy]

Originally posted by brendankharris


Im not going to retire for one year than die

This is calculated with a 3% inflation in 60 years (so it is actually 135,000 a year) and I planned to live 20 yrs past retirement, so actually its just under 2.7 million

why only 20 years after you retire, its not a stretch to think today's 30 under crowd will live past 100.

you're going to work until you are 80?

[Xtrema]

Originally posted by Mixalot27


The first step to learning how to better manage your money would be to learn how to do math. 11 000 for 5 years gives you 55 000 with no interest. Maybe your investment adviser is ripping you off. :rofl:

I think he meant to have $55K/year from the investment to retire on.

Well, tell you what. I made $3200/month 11 years ago and that get me a house and a car with room to spare. I think you need as least twice as much now to do it comfortably.

At one point, I was thinking $50K/year would be awesome. Then inflation happens. $50K is now the lower end of middle class wages.

Starting out sucks. Starting out NOW sucks even more.

Just 3 advices

1. debt before pleasures (unless debt go toward investments)

2. get better at what you're doing and get paid more

3. invest, invest, invest. If you don't own a successful business, a job can only carry you so far.

[The Cosworth]

Originally posted by finboy


why only 20 years after you retire, its not a stretch to think today's 30 under crowd will live past 100.

you're going to work until you are 80?

I calculated until 65, and then live to around 85, this doesnt include everything or the money in homes, investment properties, yada yada

I am 20 so you need to think that this is just a rough estimate so that I can figure out what I need to invest now. Kinda shocking really



Xtrema, thanks for the advice, plan is to get good at my job, not sure if it wil work out :P

I just find it crazy how there are people in town rolling around in 400,000 cars, own homes (multiple at time) and can live. To me I want 4 grand to go to mexico/europe, and have a GTi, nothing to fancy and maybe a townhouse.

[Mixalot27]

Originally posted by brendankharris


Im not going to retire for one year than die

This is calculated with a 3% inflation in 60 years (so it is actually 135,000 a year) and I planned to live 20 yrs past retirement, so actually its just under 2.7 million


I know, I know. I was just being a smartass cause you left out the per year part. Won't you get some pension through work also? And then their is CPP if its still around. But yeah the only way to improve your situation is too make more money or invest it better. 8% isn't all that high of return, maybe be a bit more aggressive or try some different investments like real estate.

And the people who are living large like your talking about probably make at least twice what you do. And maybe self employed too so they can write some of this stuff off. Otherwise they are probably living beyond their means and headed for trouble.

[Mazstyle]

The answer is so simple just go and get a credit card, then when that ones full go and get another. AND you can use one to make the minimum payments on the other as well :thumbsup:

No but seriously it sounds like you have your stuff together. Remember you will make more money as you get older. If your investing you will probably get a decent tax return which could be your trip money or a DP on a car etc. Without crunching any numbers, your investment amount seems way off unless your 45 years old. $500 a month should be plenty if your young ~25 and invest it half decently ~8%

Remember when your retiring you should have your house paid for and a car, so whats left for expenses really?

[The Cosworth]

Originally posted by Mazstyle
The answer is so simple just go and get a credit card, then when that ones full go and get another. AND you can use one to make the minimum payments on the other as well :thumbsup:

No but seriously it sounds like you have your stuff together. Remember you will make more money as you get older. If your investing you will probably get a decent tax return which could be your trip money or a DP on a car etc. Without crunching any numbers, your investment amount seems way off unless your 45 years old. $500 a month should be plenty if your young ~25 and invest it half decently ~8%

Remember when your retiring you should have your house paid for and a car, so whats left for expenses really?


Yeah I thought the calc didnt seem right, I was tired last night so I am not sure what is going on.


I never thought about the tax incentives I will get from investing, it is saving itself (sort of). I think I will save about 250, 300 a month for RRSP's until I start to get the other stuff I want to do out of the way (travel, home, car)

Also the credit card thing isnt a bad idea :rolleyes: I wonder if my life insurance would cover those when I die?

[Euro838]

The other thing you can do is work for a company that has a kickass lifer pensions. i.e. CPR, etc. Basically you work there for your entire life but then they will take care of you during your retirement. These types of pensions are usually called Defined Benefit pensions. Although a lot of companies have moved away from this model. I'm sure there are still a lot out there.

For example, (don't quote me on this) but at CPR (I know because I used to work there) you needed at least 85 points (combination of years of service and age) to be eligible for full pension. So typically you would need about 25 years of service plus be 60 (some people I know retired at 55 but had 30+ years of service). Anyways, once you were eligible for full pension, I believe this is what you got:

55% or 60%(can't remember exactly) of the average of the best 5 years of salary during your career for the remainder of your life. This pension would also transfer over to your spouse if you died before she did. So if you did well and could have a best 5 year average of about $100K, then you'd get at least $50K (plus they adjusted for inflation too) once you retired. Not too bad if you could stick it out with one company for your entire life.

Like I said, these types of pensions are much more rare now as a lot of companies (including CPR) are moving towards DC (Defined Contribution) where it is more structured like a matched RSP so you can see a finite amount.

If you're goal is for retirement, I would suggest investigating a whole life insurance plan as you'd get good value from your savings. Hope this helps.

[Toms-SC]

Welcome to THE Alberta BOOM!

[Euro838]

I also agree with those who stated that saving early makes a huge difference. Here's a simple calculation.

Assuming a conservative average interest of 5% per year. If you saved $5000 for 10 years from 20 to 30. At the age of 65 with an actual contributed dollar amount of $50000, it would give you about $365K.

If you saved $5000 beginning at 30 and contributed for the next 25 years from 30 to 55. At the age of 65 with an actual contributed dollar amount of $125000, it would give you about $408K.

(I think my math is correct but someone else can verify if they really want). Anyways, the point is if you save earlier, you'll definitely be able to use the power of compound interest towards your retirement.

[Super_Geo]

- Don't buy a car, invest in real estate instead. I'm guessing you're living at home? Buy a condo, but instead of living in it rent it out for a year AND make payments yourself. The first few years of the mortgage is the most crucial... for example, if you pay double your mortgage payments in the first year you are way more than an extra year ahead... For mine, @ 2x mortgage payments for the 1st year I pay of 4.6x more off the principle than if I pay my normal mortgage.

- You will be making WAY more down the road, don't worry too much about saving up for retirement right at the moment. You just finished getting your eng tech diploma right? Trust me, you will look back in 4 years and 50k/year will be a fraction of your salary.

- Get a girlfriend who's also career orientated... Two of my good friends from university carried their relationship from uni to Calgary and now both work as engineers and have a combined household income of $140k/year.... they can qualify for a $480k mortgage at 22!

edit: and is that $3500 before or after taxes?