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Money Talk (Mutual Funds, ETFs, Stocks & Bonds, Real Estate, Cryptocurrency, your cookie jar)


RichMan
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11 minutes ago, RichMan said:

It's common fact that the Canadian saving system is different than that of the US, right? Or are there cross border similarities?

They're different but there are small similarities. Mainly in regards to stock investing. 

But the rules, taxation, etc. surrounding shared ones are different as well. 

 

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2 hours ago, RichMan said:

Been listening to some Gary Vee to? :) 

Haha I'm honestly not the biggest fan of him. I think in his early days he hit the mark more often than not, but these days its more cult of personality and that oh so American grinding mentality that is borderline masochistic. Not everyone can be wildly successful, no matter how hard they try. It's a mixture of luck, timing, skill, and your current socioeconomic status more than effort in my opinion. I know plenty of brilliant, hard working people who have failed many times due to circumstances outside of their control. I've worked in tech for a decade now so it's more about pulling from personal experience and from those around me in this case.

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4 hours ago, MTH said:

Invest as much as you can. I'm 45. I banged in 12% of my salary from day one post college. This was advice my uncle gave me. He pointed out that you were poor through college - so you're used to it. Max your 401k. You'll never get used to your full salary - so 12% less will just feel normal.

12% was the limit when I was your age.

These days, young adults are ridiculously lucky to spend less than half their paycheck on housing alone. Setting aside a full eighth of their pay for investments is damn near a pipe dream.

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2 hours ago, CJ Boiss said:

These days, young adults are ridiculously lucky to spend less than half their paycheck on housing alone. Setting aside a full eighth of their pay for investments is damn near a pipe dream.

I agree with how easy they can have it but most expect a free handout and still don't want to pick their own pockets. I see people nearly half my age driving BMWs, owning a house and travelling the world. Where the frig did I go wrong?!

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3 hours ago, RichMan said:

I agree with how easy they can have it but most expect a free handout and still don't want to pick their own pockets. I see people nearly half my age driving BMWs, owning a house and travelling the world. Where the frig did I go wrong?!

The are three kinds of people my age driving Beamers, owning a house, and travelling the world. In order of most to least likely, they are...

1) kids whose rich parents have opened up their bank accounts
2) people who found a semi-legal, extremely unethical way to exploit people, and have no problem with ruining lives as long as it means they make bank
3) the one in a million (honestly, those are really generous odds) that got ridiculously lucky and managed to sell a thing they had full ownership over to a multi-billion dollar company for a few tens of millions

... or some combination of the three, I guess.


It's not that you, or I, or anyone else "did anything wrong". We're just living in a system where generational wealth and unethical behaviour is disproportionately rewarded.

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11 hours ago, CJ Boiss said:

The are three kinds of people my age driving Beamers, owning a house, and travelling the world. In order of most to least likely, they are...

1) kids whose rich parents have opened up their bank accounts
2) people who found a semi-legal, extremely unethical way to exploit people, and have no problem with ruining lives as long as it means they make bank
3) the one in a million (honestly, those are really generous odds) that got ridiculously lucky and managed to sell a thing they had full ownership over to a multi-billion dollar company for a few tens of millions

... or some combination of the three, I guess.


It's not that you, or I, or anyone else "did anything wrong". We're just living in a system where generational wealth and unethical behaviour is disproportionately rewarded.

This reads like an /r/antiwork reddit post. 

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Pretty cool topic!

I had a grasp of what Bitcoin is for about 20 seconds. I owned some Coinbase stock for a trade. Got it, sold it, and never dipped into the crypto space again. 

All kinds of source material about finance/investment in general. Give yourself a chance and read up; not as hard as an off wing one timer at your head from the dot. :) Check out the open to visitors of any no load mutual fund. Most bank, local and otherwise, websites can put you onto good info also. Almost all banks have a wealth management dept that will talk to you for free, (Disclaimer: no exp w Canadian banks).

Some sound suggestions in the thread already. Retirement date has a way on sneaking up on us all.

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7 hours ago, insertnamehere said:

There was one, but he's no longer a billionaire because of that.

https://www.nytimes.com/2022/09/14/climate/patagonia-climate-philanthropy-chouinard.html

The maxim has two meanings. That there is no way to ethically become a billionaire, and that there is no way to ethically stay a billionaire.

Good on him, though.

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On 9/28/2022 at 6:35 PM, CJ Boiss said:

These days, young adults are ridiculously lucky to spend less than half their paycheck on housing alone. Setting aside a full eighth of their pay for investments is damn near a pipe dream.

I'll fill in some details.

I graduated at the end of summer 2001 (I had to do a few classes post May 2001 graduation walk to get diploma). 

My first job in September 2001 I was paid $45k. I had no idea if it was good or bad salary. I got an offer letter and asked my dad who was self employed if it was a good number. His response was - "it's more than I make". Started work on Monday, September 10th, 2001 at my first real job. I worked in NJ just outside NYC. Apartments were scarce and impossible if you didn't have money and paychecks to show landlords. I had neither. Long story short, I was able to get into place with my now wife through her dad for a few months until we got our own place in January 2002. Saved up all of 3 months pay to put down payment. Found a place that charged $1500 a month.

$45k is about $33k after taxes. Or about $2800 per month. My now wife was a student, so she wasn't working. Our rent was more than half my paycheck. You learn to budget and spend accordingly.

Remember, 401k and other programs are pre-tax. So your withdraw is taken then taxes are assessed on your reduced salary. Again, was poor in college, so nearly $3k a month felt rich! I didn't miss the 12% that was invested in my retirement then.

From there, the financial squeeze was on. So you either have to work more (ot) or look for ways to make more. I jumped jobs every 18 months for a few years until I was up making much more.

We bought a house in the fall of 2004. Wasn't in NJ near NYC as prices were off the wall. We bought a house near Philly. Was listed at $199k and I had to pay $205k to get it. Was the bubble then (similar to this past year). I used $10k that I could take out of my 401k without penalty for the down payment.

I had reasonable college loans that I paid off in 10 years. I bought a new 1995 Wrangler while in college with my pizza delivery job money. By the time I graduated, it was paid off. Jeep for a time was owned by Daimer (who owns MB). So technically I had a Mercedes.

It's possible to do it. Don't let time slip by. Your investments need time to grow.

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2 hours ago, MTH said:

I'll fill in some details.

I graduated at the end of summer 2001 (I had to do a few classes post May 2001 graduation walk to get diploma). 

My first job in September 2001 I was paid $45k. I had no idea if it was good or bad salary. I got an offer letter and asked my dad who was self employed if it was a good number. His response was - "it's more than I make". Started work on Monday, September 10th, 2001 at my first real job. I worked in NJ just outside NYC. Apartments were scarce and impossible if you didn't have money and paychecks to show landlords. I had neither. Long story short, I was able to get into place with my now wife through her dad for a few months until we got our own place in January 2002. Saved up all of 3 months pay to put down payment. Found a place that charged $1500 a month.

$45k is about $33k after taxes. Or about $2800 per month. My now wife was a student, so she wasn't working. Our rent was more than half my paycheck. You learn to budget and spend accordingly.

Remember, 401k and other programs are pre-tax. So your withdraw is taken then taxes are assessed on your reduced salary. Again, was poor in college, so nearly $3k a month felt rich! I didn't miss the 12% that was invested in my retirement then.

From there, the financial squeeze was on. So you either have to work more (ot) or look for ways to make more. I jumped jobs every 18 months for a few years until I was up making much more.

We bought a house in the fall of 2004. Wasn't in NJ near NYC as prices were off the wall. We bought a house near Philly. Was listed at $199k and I had to pay $205k to get it. Was the bubble then (similar to this past year). I used $10k that I could take out of my 401k without penalty for the down payment.

I had reasonable college loans that I paid off in 10 years. I bought a new 1995 Wrangler while in college with my pizza delivery job money. By the time I graduated, it was paid off. Jeep for a time was owned by Daimer (who owns MB). So technically I had a Mercedes.

It's possible to do it. Don't let time slip by. Your investments need time to grow.

I'm glad you broke this down. 

My wife and I both followed similar path to this and have bought out second place in Vancouver, which has a significant increase in housing costs, but with lower average salary range, than Alberta. 

Drives me nuts to see a growing "woe is me, life is not fair" narrative that is growing online. 

Edited by coopaloop1234
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7 hours ago, MTH said:

I'll fill in some details.

I graduated at the end of summer 2001 (I had to do a few classes post May 2001 graduation walk to get diploma). 

My first job in September 2001 I was paid $45k. I had no idea if it was good or bad salary. I got an offer letter and asked my dad who was self employed if it was a good number. His response was - "it's more than I make". Started work on Monday, September 10th, 2001 at my first real job. I worked in NJ just outside NYC. Apartments were scarce and impossible if you didn't have money and paychecks to show landlords. I had neither. Long story short, I was able to get into place with my now wife through her dad for a few months until we got our own place in January 2002. Saved up all of 3 months pay to put down payment. Found a place that charged $1500 a month.

$45k is about $33k after taxes. Or about $2800 per month. My now wife was a student, so she wasn't working. Our rent was more than half my paycheck. You learn to budget and spend accordingly.

Remember, 401k and other programs are pre-tax. So your withdraw is taken then taxes are assessed on your reduced salary. Again, was poor in college, so nearly $3k a month felt rich! I didn't miss the 12% that was invested in my retirement then.

From there, the financial squeeze was on. So you either have to work more (ot) or look for ways to make more. I jumped jobs every 18 months for a few years until I was up making much more.

We bought a house in the fall of 2004. Wasn't in NJ near NYC as prices were off the wall. We bought a house near Philly. Was listed at $199k and I had to pay $205k to get it. Was the bubble then (similar to this past year). I used $10k that I could take out of my 401k without penalty for the down payment.

I had reasonable college loans that I paid off in 10 years. I bought a new 1995 Wrangler while in college with my pizza delivery job money. By the time I graduated, it was paid off. Jeep for a time was owned by Daimer (who owns MB). So technically I had a Mercedes.

It's possible to do it. Don't let time slip by. Your investments need time to grow.

I'm getting paid just over $40k before taxes, just under $30k after; roughly $2400 per month. Average rent in my city is $1500 right now, so about the same, but twenty years of inflation (~60% on the CPI since 2000) makes literally everything else more expensive. Utilities, phone and internet, groceries, gas and car insurance. The only reason I'm not in the red every month is because my brother and I are jointly paying a mortgage rather than rent.

You made a lot happen with very little, but people starting out now are facing steeper hurdles and worse starting conditions (I cannot even fathom the idea of being able to buy a new Wrangler just by delivering pizzas. Like, that's literally impossible these days). Same as you faced steeper hurdles and worse starting conditions than people in the early 80's did. It's not wallowing in self-pity to acknowledge that.

Edited by CJ Boiss
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Good stuff. I think the two prong approach is pretty sound - 401k contributions (set it and forget it) and start your own discretionary investing “fund”. My 401k/retirement goes into mostly broad indexes / mutual funds with longer term view, and the discretionary investing mantra (for me) is just stick to what I know, which is commercial real estate. Whatever returns I get I just do my best to roll into the next one. Don’t need to swing for the fences every time.

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1 hour ago, RichMan said:

So what is the equivalent of a 401K in Canada? Is it a RRSP or a TFSA or other?

I’ve only lived and worked in US so I couldn’t say. This is one of a few US savings “vehicles” that is essentially offering pre tax contributins and tax deferred growth until you’re at retirement age.  You get taxed the distributions but this will in theory be when you’re retired and at a much lower tax rate. The 401k is offered through an employer, usually a mid to large size company. There are other similar vehicles for sole proprietors and small businesses. Different names but they do the same thing.

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On 10/3/2022 at 8:38 AM, MTH said:

My first job in September 2001 I was paid $45k.

$45k is about $33k after taxes. Or about $2800 per month. My now wife was a student, so she wasn't working. Our rent was more than half my paycheck. You learn to budget and spend accordingly.

We bought a house in the fall of 2004. Wasn't in NJ near NYC as prices were off the wall. We bought a house near Philly. Was listed at $199k and I had to pay $205k to get it. Was the bubble then (similar to this past year). I used $10k that I could take out of my 401k without penalty for the down payment.

I had reasonable college loans that I paid off in 10 years. I bought a new 1995 Wrangler while in college with my pizza delivery job money. By the time I graduated, it was paid off. Jeep for a time was owned by Daimer (who owns MB). So technically I had a Mercedes.

It's possible to do it. Don't let time slip by. Your investments need time to grow.

 

23 hours ago, coopaloop1234 said:

My wife and I both followed similar path to this and have bought out second place in Vancouver, which has a significant increase in housing costs, but with lower average salary range, than Alberta. 

Drives me nuts to see a growing "woe is me, life is not fair" narrative that is growing online. 

 

I'm sorry, but those who bought years ago cannot pretend we're currently living in the same financial circumstances. You cannot find a 200K anything anymore, let alone a House for that in any modern western city. It is impossible for a person making an average wage in the modern era to save up enough for a down payment to then buy a home. The "woe is me" is because we're currently living through extreme wealth inequality and our politicians are too feckless to do anything about it.

 

Home prices are now rising much faster than incomes, studies show

 

 

https://toronto.ctvnews.ca/this-is-how-long-you-ll-have-to-save-to-afford-a-down-payment-on-a-toronto-house-1.5535524

 

"Currently, to save up for a down payment for an average Canadian home, buyers would have to save at a rate of 10 per cent for six years — or 69 months.

But in Toronto, where the average home costs approximately $1.2M, the time period required to save for a down payment is much longer.

In order to save enough money for a down payment for a home in Toronto, a resident making a yearly salary of $196,913, saving at a rate of 10 per cent, would have to do so for 26.5 years — or 318 months.

To afford a condo in the city under these circumstances, it would take just under five years, or 56 months."

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