How much does the average Canadian save per month?

[ercchry]

Originally posted by Feruk


What the homeowner has left over, the renter has left over as well. Since 1 = 1, it's left out of the calculation.

okay, so lets look at it like this. as a home owner im "investing" 30-40% of my fixed housing costs into my home as equity... the renter? he is not. if both are paying the same amount every month for the same home. then the owner is ahead, with a 2% leveraged annual return.

but again, you can play with the numbers all you want to make then in favor of either case. for me, in this market, in calgary... if you plan to be here for the long term. buying is better if all things equal. at least you know your home isnt getting sold out from under you

[pheoxs]

My view has always been:

If you are going to stay somewhere for 5 or more years then buying makes more sense and you'll be further ahead in the long run.

If you might be moving to a different place, area, city, country etc, then renting makes more sense because you are significantly more mobile.

Rent vs Own has always been a trade off of responsibility and mobility.

A renter has minimal responsibility and a high degree of mobility (30-60 days needed) whereas a home owner gains equity but has more responsibility for repairs, and is significantly more expensive to move.

[bitteeinbit]

Wow, who the hell rents for 2800$/month?! I'm sure the average renter (even in Calgary) rents for far less than that. If you're going to spend 2k+/month on rent, you might as well buy. Cut that figure down and your results will be drastically different.

Originally posted by ercchry
here NissanK... i predicted my own future, first i de-ontario'd the spreadsheet... then i put in numbers i feel are fair


» Click image for larger version

my personal spreadsheet looks different... and is even more grossly in favor of owning. and since its cut off, by 2042 the owner is $1mm ahead

[Tik-Tok]

Originally posted by ercchry


okay, so lets look at it like this. as a home owner im "investing" 30-40% of my fixed housing costs into my home as equity... the renter? he is not. if both are paying the same amount every month for the same home. then the owner is ahead, with a 2% leveraged annual return.

Try making this argument with anyone who bought in Detroit 20+ years ago

[ercchry]

EDIT:^^^but if you were dropping the same amount in rent... who cares? you end up in the same spot! hahaha

Originally posted by bitteeinbit
Wow, who the hell rents for 2800$/month?! I'm sure the average renter (even in Calgary) rents for far less than that. If you're going to spend 2k+/month on rent, you might as well buy. Cut that figure down and your results will be drastically different.

umm... welcome to calgary if you spent your $450k on a condo downtown, its going to rent for even more

[Feruk]

Originally posted by ercchry
umm... welcome to calgary if you spent your $450k on a condo downtown, its going to rent for even more

So one common technique to value an investment is GRM (gross rate multiple). Pretty crude, but it weeds out sinkholes. Pretty much purchase price divided by gross annual rent. Break even has historically been 7 to 10. Above, you'll likely never make money. On $450K, your GRM at $2k/month rent is almost 19.

[M.alex]

If you save less than $1/4M/yr you're doing it wrong.

[variable_x]

Since we are on beyond, I will be interested in a net worth poll and how many people are in the >5M and >10M club....

[ercchry]

Originally posted by variable_x
Since we are on beyond, I will be interested in a net worth poll and how many people are in the >5M and >10M club....

i'd say very few... sure a lot of people probably do pull down $250k+ a year... but since everyone is under 40 (for the most part) and a large percentage closer to 30... thats just not enough time to hit those numbers

[variable_x]

I think that's a better gauge of someone's ability to save and invest... given average levels of income. Of course, except those who inherited large wealth.

Someone who saves > $1500 a month is meaningless if he rents a room @$500 a month vs someone who is on a 10 year mortgage and paying $4000 a month in mortgage payments while saving $0 dollars.

The >5M and >10M is really a joke...

[ercchry]

Originally posted by variable_x
I think that's a better gauge of someone's ability to save and invest... given average levels of income. Of course, except those who inherited large wealth.

Someone who saves > $1500 a month is meaningless if he rents a room @$500 a month vs someone who is on a 10 year mortgage and paying $4000 a month in mortgage payments while saving $0 dollars.

The >5M and >10M is really a joke...

yeah, that was kind of my point at the beginning... but again, that guy with the $4k a month payment and no reserve will also be royally fucked if he loses his job, or the property values tank. with risk comes reward though

[rMBA13]

I save 50% from my bi-weekly paycheck

[Type_S1]

Originally posted by Feruk

So one common technique to value an investment is GRM (gross rate multiple). Pretty crude, but it weeds out sinkholes. Pretty much purchase price divided by gross annual rent. Break even has historically been 7 to 10. Above, you'll likely never make money. On $450K, your GRM at $2k/month rent is almost 19.

Your 7-10 number seems like complete bs to me. You would have to rent a 200k home for $2000/month to barely break even? If I ever found a place where I could get 1% of the purchase price per month in rent I would be buying like crazy.....

[Sugarphreak]

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[G]

Huge epeen sug

[dirtsniffer]

Originally posted by Sugarphreak


Made a 45K lump sum payment against my mortgage this week… which isn’t too bad for 6 months I guess, I was hoping to put aside a little more

You still have a mortgage?

[Sugarphreak]

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[G]

I want to build by you but I am scared of buying at the top of the market and this zero debt is just so sweet. Can I still get in for 1.1-1.3?

[Sugarphreak]

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[adam c]

Curious how many people in this thread have kids and are able to save 1500+ month
For daycare alone we pay 1,000/month, can't wait for our daughter to go to actual school to save some money, if it wasn't for CC debt which we're paying off aggressively and daycare we could easily save 1500/month but at the moment we're not even close