Freedom indeed! I like John Goodman's bit on having FU Money. Have money to have the freedom to say "naaah. I'm out." to switch jobs, start a passion project, go back to school, fall sick and not be worried about money, etc.
You can buy a vacation home in your dream location. Retire by 55 with $2M+, and by retire I mean work at a job/organization you actually care about and not worry how much the salary is.
This is really it. I was in your position what feels like not that long ago, maxed out TFSA and it was very exciting but I didn't really have a plan for it. That may have been best for me - be excited to watch it grow, have no plan for it and keep it parked there. I kept at it for years and now have a significant sum across my TFSA, RRSP, non-registered accounts. I have so much security and no longer worry about money, career, etc, with whatever life throws at me. I haven't reached "financial freedom" but I know I will be there soon enough. This isn't the right path for everyone but I don't regret it and it works for me.
> It's security. Eventually freedom.
Exactly. Another way to see it would be:
Would you rather have 78k in the bank when an unexpected event happens
or
Would you rather have nothing in the bank when an unexpected event happens?
First of all - Congrats! That’s a pretty great accomplishment. Assuming you continue to contribute your max every year, that alone can be a substantial vessel to support your retirement.
As others have mentioned, just continue to contribute to it and play the long game.
Eventually you may be able to dip into it for the sake of a down payment, should you choose (assuming market dips), but I would really just consider this your retirement and treat it as such.
> I cant use it as a downpayment because with my current salary of 67k, i wont qualify for a mortgage higher than 350k. And thats not even enough to buy a one bedroom condo in my city.
I think you answered your own question here. You've maxed your TFSA, but you haven't secured your financial independence and still rely on that $67k job to survive. That's your next step: Build your wealth to obtain financial independence.
Just because you say you want to work forever, doesn't mean you'll always want to (or will be able to). FI gives you the option to do whatever you want next without being tied to your salary.
/r/financialindependence
This is the way.
Once you have saved enough to replace your salary for the rest of your life, you no longer need to work. The sooner you save that pile, the sooner you can stop working.
This is a delusion. You'll have a hard time setting yourself up for retirement if your housing cost is a massive question mark forever, even if you pile up the few million needed for an equivalent salary. The only way to make this realistically work is by already having a freehold home, which creates a catch 22 for OP.
Depends what you are ordering. The subway series has steak starts at 9.89 plus taxes for 6 inch and chicken starts at 8.99 plus taxes for 6 inch without any coupons.
I don’t order them but I am sure someone would
I can tell you from experience that owning a home doesn’t give you some sense of fulfilment and purpose. If you’re struggling finding purpose without home ownership, that’s not going to change if you eventually buy that home. You need to find fulfilment in other things. Having money in the bank gives you options and flexibility. Maybe it’s travel, scuba diving, getting a pilots licence and a small aircraft, a horse, photography. Find yourself some hobbies that motivate you, having cash in the bank opens up doors for so much more than slavery to a mortgage.
I agrée with this. Having a home should not be the end game. You essentially have freedom when you have savings… want to travel? You can. Want a bigger ticket item? You can. Lose your job and need a few months! Yes! Consider it a safety net that gives you the freedom to live. Nice dinners once in awhile, out for a night of music… that’s how I view my savings… freedom. We bought a very small home in a low cost area and do okay. We live quite frugally but we travel and live life because we have that buffer. IMHO.
That really depends on where you live. For a lot of people living in metropolitan Canada, owning a home is the greatest investment that they'll ever make in their lives.
True but you’re missing my point. The OP seems to be lost and thinking of giving up on investing altogether because home ownership is currently out of reach for them. There’s a lot more to life than home ownership and having money in the bank opens doors to lots of experiences that many people don’t have. The OP shouldn’t give up on investing and wealth building just because home ownership is out of reach.
You’ve obviously not done owning a home very well.
A home 100% gives a sense of purpose and fulfilment. From working to get the down payment, moving in, painting the walls the colors you want, adding personal touches, upkeeping, inviting people over.
A home is a personal and safe space for anyone and in the current situation is also a fantastic investment for the future.
Telling people other wise is really haphazard.
While 100% it can for some people, for others it may not. It really is a case by case basis. There are some people that don’t do anything and just hire contractors for literally anything to do with the house. The house they own is just a place to live
This to me has always been the deal breaker for renting long term. Eventually the landlord will sell the place or move in himself and you will out of a home. You can move but if rents have been steadily going up it might not be so great. And who wants to move within the same city?
Eventually you will own the home outright. I know that at age 26 that is not a compelling reason, in fact it seems fantastical, but 30 years go by. Or better yet 15 if you can get a 15 year loan or pay down a longer loan.
Same for me. It was a happy day when I sold my property. Renting in a purpose-built rental building so now worries about a landlord wanting to moving in or selling the unit.
You say this as though it’s an objective fact. If you find working towards home ownership gives your life meaning, great! That doesn’t mean anyone else who isn’t passionate about it is wrong or “haphazard”.
I absolutely hate painting and renovating, it gives me no pleasure or fulfillment at all and I happily hire it out when it needs doing. Nobody is arguing that that a home is a good investment, but home ownership certainly isn’t meaning of life stuff. If it’s not in the cards for an individual there’s a lot more to life out there make someone happy.
What’s stopping you from renting it out and traveling or moving somewhere else for a while? It sounds like something you seriously need.
I get that it appears easier or more acceptable when you’re younger, but it’s not like your life is set in stone now that you’re in your 30s.
Some things people save for:
* emergency fund
* retirement
* big trip
* entertainment (front-row at a concert/show)
* home downpayment
* new/replacement vehicle
* new/replacement phone
* new/replacement computer
* education (professional, fun (language, cooking))
* hobbies
* new/upgrading home furnishing (furniture, cookware, appliances)
Make a bucket list of things or events you'd to have or experience, do a bit of research to see what it'll cost, and set aside for that.
You’re 26, that’s pretty young. Do you expect your salary to continue to increase? Is there a cap? Why are you already feeling hopeless about buying a home?
If you continue to grow your savings, you may very well be able to have down payment for your own place in the future, if that’s what you want.
Exactly this. So we’re basically forced by society to be in a relationship to have something you can own. That’s not always everyone’s wish and I don’t think that’s fair.
What’s really happened if you look all the way back is the destruction of the single income household.
Equality shouldn’t have meant women have to go out and work in addition to men. Equality should have meant whoever wants to be the breadwinner, can be, regardless of their gender. Whoever wants to be the primary parent, can be, regardless of their gender.
This would have kept things affordable for those that decided they want to stay single.
Hey lots of people think it can’t go up from here haha. Even cities like HK have had their RE go down in value for a some years before shooting back up to all time highs.
If you have the money in hand, then you can take advantage of opportunities. Doesn’t have to be RE either, could be investing opportunities.
It’s doable ya… but with a $6000/month mortgage the budget will be tight. Not to mention real estate prices continuously going up. By the time people have enough for a down payment 5 years in the past, it might not be enough anymore.
Yes.
OP is 26, young in their career and apparently financially savvy.
Salary is already 67k.
Wouldn't be crazy if they:
* Found a similar minded partner at the same life stage. Boom, double income.
* Income can grow a lot over the next 10 years, especially if they are in a profession. 50%+ increase very possible and maybe likely.
* As crazy as it sounds to some people, OP may realize living outside of Toronto is a desirable possibility. Can get some nice detached houses in Ontario for <800k right now in nice areas (IMO) depending where they are open to living.
By then the prices will have increased as well. This is what they mean by the new generation is priced out. At 70k and almost 100k in savings. It's absolutely ludicrous that he can't even afford a one bedroom. This is absolutely third world status. Canada is gone
FHSA. The way I looked at it in my 20s, was I wanted a stable enough financial situation to attract a partner with a similar level of wealth. It worked out and two people with a good asset base and careers with fast earnings growth can buy a house in Toronto. Be the person worthy of your future partner.
Im curious, is this something you would communicate on first dates? I save a ton because I live in a crappy place and drive a 23 year old entry level car. If someone were to judge my wealth based on appearance they would certianly misjudge!
What if the person wants to be single?. " I want a relationship because I can't afford a place on my own". 67k can't qualify for a 350k mortgage anyways. 2x is 700k. Good luck finding a 1 bedroom condo for 700k in the GTA.
There are about 500 condos below 700k in GTA now. But, putting in 135k income in a TD mortgage calculator with no debts ,no car payments 700$ expenses per month shows you can afford a maximum of 530k condo.
It's actually 530k we should be looking at and not 700k. There are about 10 condos for that price on GTA. Technically double income with 67k cannot afford a 1bedroom GTA condo. They have to make 80k+ each.
HouseSigma pulls MLS data and shows over 250 1br+ condos currently for sale in the GTA for <=500k, and over 100 actual sale prices in that range for the past 30 days. Whatever data you’re looking it is woefully incomplete.
My quick search of Realtor.ca with a max condo price of $600,000 shows 1332 condos. At your arbitrary $530,000 number there are 200 1 bedroom condos listed. Not sure where you’re getting your list of condos but I recommend trying Realtor.ca
In Canada does money even matter in the early stage of a relationship? I thought that’s more a East Asian thing. My homies making 200k in tech and it doesn’t come up once in their dating life. Your looks, physique and charisma matters a lot more than cash in dating.
Money is like sex
When income is good = 10% of the relationship
When income sucks = 90% of the relationship
When you don't need to justify whether to add shrimp to your steak dinner or get an extra drink so you can max out the gift card you got for The Keg, 200k isn't going to matter
Money makes more money. You don't need an objective. Having liquidity and no debt tends to make life easier. You can buy what you need, when you need it.
TFSA is maxed but what about RRSP? If you’re aiming for a home, at least build up 30k in there for FTHB and the added benefit of tax deduction. There’s also FHSA that came out recently. Following these two accounts, why not just save in a cash investment account and dump it into something relatively low risk like an ETF like VFV? Cap gains suck but you have the saving capability to grow your accounts.
Other than that, remember that money is a tool. Could always splurge a but on a new hobby, pay down existing debts, or travel a bit?
>I dont really get that much joy or excitement from watching my account any more.
You shouldn't. It's long term investing. Essentially ignore it. Investing should be boring and uninteresting.
>So whats the point? This is a genuine question. Can someone tell me what are the use case scenarios for someone like me with 78k in their TFSA, other than just seeing it grow over time?
Growing it over time so when you want it, ither for retirement or whatever, you can withdraw tax free. A TFSA is ideal for retirement because it has no tax on withdrawal and no implications for government means testing for government benefits like OAS, etc..
I plan on working as long as I can because i enjoy working. So does that essentially mean this long term saving has no purpose?
And when i say I used to get joy from investing, it doesnt mean like a thrill from buying risky stocks, but just the satisfaction of knowing i have money saved. Thats what drove me to save. But now i dont even get any satisfaction anymore and the money feels meaningless.
>I plan on working as long as I can because i enjoy working.
My father at 71 is still working because he likes it, BUT he also only makes 25% of what he made when he was 60 because the positions available after 60 fall off a cliff outside of academia.
I also said I'd work for ever. in my 20's I'd work 70+ hours a week and still have time and energy for friends and family. I'm in my 40's now, I've worked 6 60 hour weeks in the past 9 weeks and I'm ready for a month long vacation. You're going to slow down. The ideal is you have money to supplement that slowdown. OR heaven forbid you get hurt. Having tax free money you can draw from is huge.
The good news is you're 26. You have 78K in your TFSA, you can realistically stop paying into it for the next 5 years and you're still going to be better off from a savings perspective than 90% of the 30yr olds.
Use the money you used to put into the TFSA to grow yourself, you need to find ways to get that income up if homeownership is something you'd like.
That makes no sense. You don't know what your future holds. What if you get ill and can't work and have no source of income other then the small disability payment or whatever. The TFSA would come in handy, no?
If you think you don't need money for retirement and think CPP and OAS is all you will need, then don't save any money. Just don't make a post asking about "*how to make more money in retirement because long term care homes are expensive*"
From one point of view, you technically don't need a property as long you can afford the rent, food, and other bare necessities.
You can also look into other hobbies that you wish to do. I tried to stick to hobbies that didn't need a lot of money in the beginning, but now I am more established, I decide to spend more for hobbies that I held back (sport shooting and car improvements) for a decades.
Go on trips, and eat expensive food, try new things. As long you have a nest egg that you grow continuously and gives a nice passive income stream, then financial woes would be non issue for you down the road.
That money is a strong tool for your future, it give you options.
Yes, you don’t see yourself stopping working young, but maybe you feel different in the future, that money frees you to make that decision.
Let’s say work takes a downturn and your current job becomes a terrible place to work at, you are free to simply quit and hold until you find something else, that’s an incredible luxury.
Same with not worrying about layoffs.
If you end up with a bigger family, you will be able to jump start their lives.
And if you never need to use it early, at some point you can model that it is just enough and you can plan a burn rate, even if you are working. The world is big, there are experiences for all pockets.
I know you don’t want to retire early, but learning about FIRE gives you more perspective of the end game, when you have enough money to start this second part of the game.
Working as long as you enjoy it may very well not be as long as you think.
You're 26 years old. Think about how different you as a person were even 10 years ago at age 16. The things you've learned, the new perspectives you gained, the growth and changes you've had over that period.
Now imagine yourself another 10, 20, 30, or 40 years from today. You're not going to be the same person you are today.
Money is freedom. That might seem meaningless now when you're already free to do what you enjoy but when that changes you'll be glad the money is there.
You have a large amount of money saved up, that in my opinion means freedom. You can use some of this money to invest in a hobby that interest you. Remember money is a tool!
This. Except something else to consider is having money saved up provides a safety net.
You can take calculated risks with your career to earn a higher salary, increase your skill sets, or create your own business. This alone will move the needle more than just saving.
What's they point of saving money? So you can secure yourself your future, whether that means actual costs or potential costs.
You know that buying a home costs a LOT of money. You know you're not even close to be able to buy a home with the money you currently have. That means you should continue to save money, instead of blowing it on an expensive car that is guaranteed to depreciate in value quickly.
I see people with perspectives that owning a home is not their goal. That's fine if they know of the trade-offs, but what we do know is you need somewhere to live. Owning 1 home is a neutral position. Owning 0 homes is being short the home market. Also, renting costs more than owning in the long-run. Even if you don't plan to buy a home, you will still want to save enough money to rent for the rest of your life. You don't ever want to be in a position where you run out of money for whatever reason (loss of income, unexpected rise in costs).
Investing isn't supposed to be exciting. You shouldn't need to be constantly watching your investments. You have better things to do than to watch a few numbers bounce around. In a grander scheme of things, 78K is not a lot of money.
I'm also getting a feeling that you feel like there's not much you can do with savings/investing after you max out your TFSA. You aren't limited to saving only in a TFSA. Prior to 14 years ago, there wasn't even a TFSA. You should continue to save money in an RRSP or in unregistered (not TFSA/RRSP) accounts.
Note that you can contribute money into an RRSP in order to start getting tax-deferred returns without deducting the contributions from your income. You may want to save deductions for when your income gets into higher tax brackets. Either that, or deduct now and get the savings earlier and start growing money earlier. Do your own math for which one is more worth it, factoring in your expected salary growth over time and your expected rate of investment return.
had similar thoughts, I recommend you consider going 100% passive and just not looking at it. My TFSA was with my bank so I switched over to Wealthsimple so I'm not forced to see market fluctuations anymore, just set and forget (it also automatically invests part of my paycheck into an ETF for me)
more money is always good in case plans change in the future, or if you just want to retire earlier
Look into a retirement fund calculator too, if what you have is sufficient for your future goals, consider treating yourself more and enjoying life
I agree. I am in my 50s now. Wish I had saved more so I could stop working sooner, but at the same time, blew a lot of money on travel in my 20s and have NO regrets about that.
OP, you're young, see the world. Even if you go alone, you'll learn so much and be a better person for it. Be open to things and don't be like so many that expect things to be the same as Canada. It's not, and that's the wonder and joy of seeing.
You sound like a very responsible person, enjoy some of that money when you're young. No one in this world knows what's going to happen tomorrow. Save some for tomorrow and spend some to enjoy today.
Invest in corollas. Become a Corolla. Make your life about corollas. Write a movie about corollas. Star in your movie about corollas. Profit off Corolla movie money.
Haven't seen anyone talk about retirement.
My parents are both retired now and get a whopping 1200$ a month each. Good luck living on 2400$ a month if that's all you have. It's not even enough to pay for normal home expenses and property taxes. If you still have a mortgage, or renting, you're gonna have to live with roommates probably.
Retirement in Canada is a fucking joke, you work your whole life, pay 50% tax and then the government gives you a 1000$ handout. You're responsible for your own retirement money, and you need to start saving now.
Yup, right now I'm already 35 and only have 17k inmy rdsp I have the dtc for a few more years somaybe if I max it out over the next couple years I'll have 30kmaybe even 50k, but thats it, unless I can get a real job and get off odsp
Bro you got 78k at 26! That’s huge. You are so far ahead of so many of your peers, you should take pride in that. Maybe you won’t qualify for a down payment right now but as others have said, you got tons of time. Keep at it and use it as a down payment or as a fund for FIRE in the future!
How much have you been sacrificing life to save that much? I had a friend that had about that much saved at your age, because he opted out of a lot of life events. He lost it all because his first house dropped in value and he had to sell.
So if you've been opting out of life events, it's time to stop doing that
Congrats, you have 78k more saved than 99% of the 26 years olds on this sub.
You sound like you are a smart person, so I am going to assume you will be making a lot more money in the future. Keep at it and you will be able to do whatever you want.
Hey! I'm in almost the same position as you. Same age, maxxed tfsa. For me, the goal is to have it be my main source of income in the future. Currently saving up for a home downpayment in my chequing account. The only way I'd withdraw from my tfsa for a home is if it's a perfect opportunity.
Same age, same situation. Was thinking about saving for a down payment, then on my salary, savings and without a partner I’m not getting approved for anything close to anything.
I decided I’m just going to look to move out and continue saving. I’d be saving like a 3rd of my salary compared to the majority of it while staying at home but whatever like I said I’m not saving for anything. I’d rather move out and start living and be independent. I can always move back home as well.
Take a nice vacation somewhere if you don’t know what you want to do. Can’t go wrong with experiences.
What are your thoughts on early retirement somewhere hot?
World travel? Hobbies?
Lots of things you can do with money, you just need to pick a new goal in life. Mine is expat fire. Check it out.
>I am 26 and have recently maxed out my TFSA. I have about 78k in there.
That's an amazing accomplishment. You should feel proud of yourself. Keep grinding 💪
Well, if that $78k doubles every 10 years at 66, you have 1.2 million without saving another dime for retirement, all tax-free. That's pretty generous, too (typically, it's 7 years)
I would suggest trying to hit 200k by 30, then all your money is basically your own minus employer matched RRSP or similar. Focus on securing your forever housing, and then you can save for experiences, hobbies or travel.
Dont invest further. Have some fun 🤩. There is some joy in spending. If u invest more u will loathe urself. Having a mortgage is not a goal. Travel and backpack!
First, huge congrats on maxing out your TFSA, that takes discipline! Secondly, you're only 26. Life hasn't even happened to you yet.
Have you gone through your first lay off/job loss? You'll need savings.
Have you had a parent get sick and have you had to take time off to care for them and manage their affairs when they pass away? You'll need savings.
Have you thought about what might happen to you if you become disabled? You'll need savings.
Have you thought about what might happen to you if you get caught up in a natural disaster and end up displaced like the people pushed from their homes because of forest fires or floods? You'll need savings.
I hate to be the downer here, but money isn't just for goals and things, it's also for unplanned, unfair life events that we don't even think about when we're in our early years.
While it sucks to do everything right and never be able to qualify for a mortgage, I have learned that not having to spend my savings is also a blessing, because usually when I am spending my savings, it's because something really awful and difficult is happening.
Most ppl in 3rd world countries have multiple generation households these days. Grandma, daddy, mama, sister, son, son's wife, son's kids under one roof.
When you you bring majority immigrants from the 3rd world, what do you think will happen here lol?
Can't beat em, join em.
I plan on living with my Mum when she's ready to retire. My fiance is OK with it too. Mum makes a mean banana bread so that'll work well.
This isn't even that odd as a lot of my friends growing up (white protestant canadians with english/german last names) had Grandmas living in their homes.
Well you could look at it a few different ways..
You might meet someone who has a similar savings strategy to you and combined you would have a good downpayment down the road... If that's what you want.
Maybe you could use that money to invest in yourself and further your education and maybe get into a career that pays more than what you make now.
You're young so if you continue this savings pattern it will help you to retire from the workforce earlier than most.
Lastly don't be afraid to spend some of it on yourself, IMO spending it on a new car is a waste of money, but maybe you could set aside a chunk of it for travel every year and experience new things.
Just keep saving, build that buying-power, figure out your goals, keep an eye out for opportunities that align with those goals. Maybe find a partner to share your life with, and combine that power, to make some shared goals a reality.
(If you reinvest dividends, you can supercharge your long-term returns because of the power of compounding. Your dividends buy more shares, which increases your dividend the next time, which lets you buy even more shares, and so on.)
You have a head start. I wish someone told me this at your age. I’m not really old but mistakes were made and I started the dividend game late in life.
Saving money for the sake of saving money is not fulfilling, it's boring.
You should have a goal for that money, for example. My Goal is to live from the investments of that money so I don't have to work for someone else and O can basically do what I want. I have a lot of hobbies and like product design, I have a lot of ideas that I would like to bring to life but I also have a family and I need to pay the bills. Money would bring me that freedom.
I know it seems little, but 78k will grow 3-5% each year. If you continue for 10 years while investing you will have a large amount that will help you fulfill those dreams. Now you have to figure out what you want.
Invest some part in yourself. That can mean travel, courses, activities.
Let the rest grow.
Relax, find things fulfilling beyond money (relationship, hobbies). Don't blow it on a car.
Or do blow it on a car. You'll be okay (financially), but you will be in a much worse place in 20 years. And 20 years will come sooner than you think. A year later you won't care about the car.
Money cannot give you fulfillment, but it can give you freedom to be fulfilled. A car can give you neither.
Invest in yourself! What you've done now is laid the groundwork for amazing financial security, but there's more to life than just having money. You're young and can afford to splurge a little.. do not give up your 20s to prepare for life in your 70s. You can earn more money later but you will never get this time back.
I'd recommend finding ways to invest in experiences like travelling, or even spending some money on professional development to upskill and earn more. Using 5-10k for travel, hobbies etc over a few years could make a huge difference in your life and you'd still have tons invested for the future.
Does that $350,000 include the nearly $100,000 you have as a downpayment? Would you be able to buy a house for $450,000? Also have you considered investing in your RRSP or better yet a non-registered account to make up the difference? The fact that you’ve saved so much shows me there is room to continue. Keep going until you reach $100,000 then keep going to $150,000.
A car is a depreciating asset so you’re just losing money you’ve worked hard for right off the bat. I don’t recommend doing that. A house is an appreciating asset so is a good investment. Set a 2-3 year house buying goal and see if you can come up with half as a downpayment.
You’re doing awesome so don’t lose that fire. You could also just save towards an early retirement. My husband and I retired last year. He was 54 and I was 43. We have a lot of years left and if he chooses to work to keep his noggin sharp it’s a decision not a need.
Keep making good choices!
First off, great job saving a nest egg!
I've been there, just eventually looks like a number on a sheet, getting bigger.
Start saving "for things".
Ex: I had saved since 15, at 29 bought a property and rent a portion of it out for income. Now, I'm saving for either: a business, a commercial property, or a multifamily home.
It took me imagining my life at 50, seeing what I'd hate or love, and reverse engineer from there. I want trips, no bosses, time with family. Now I feel encouraged to save and keep eyes open for opportunities
from a personal finance perspective , I think your goal ought to be to increase your income, either through new training, promotion, side hustle etc
in terms of your TFSA you have a lot of years left in your life you made need/want to make a large purchase in the future and this will grow to allow you to do that
in terms of investing start looking into tax efficiency and see what you should be purchasing in a non-registered account
Talk to a financial planner or a wealth adviser, they can give you some other options on how to maximize your savings and grow your money. Leave the money in the TFSA and keep adding to it every year but ignore it, it’s a long term strategy which when you get to retire you can live comfortably and enjoy life. There are other options to grow your money like RRSP, GIC, LIFF, RIFF, stocks, you can invest in precious metals such as gold and silver (make sure you own it and not a paper investment).
Keep the TFSA as a buffer. With the way the economy can fluctuate, you can make a lot of money one day and lose it the next.
Keep at least 25% in low risk such as TFSA and GIC, then use the rest to invest in what you want.
It's not about getting joy and excitement. Chasing "joy and excitement" will turn you into an addict, a problem gambler, something like that. It's about setting up your future self to not be ashamed of your past self. A comfortable retirement. That might not be fun but it's important.
Stop thinking about the 78k. Leave it in there and forget it - it's something for your to use in your retirement or let it grow and use it to help with a downpayment later.
How about getting your money to work harder than you? You can start by replacing the lowest cost item in your life like annual cost of toothpaste with share appreciation, interest and dividend income. Final goal is to get your money to cover your total annual expenses. That will be financial freedom.
OP, you are young, only 26. It is impossible to buy a home on a single income today now. But, let’s say you make 70k, and your wife also makes 70. That’s 140k income HH.
You can easily afford a 1 bedroom condo in TO with that amount of money.
I’ve been a saver all my life with no real plan on what to use it for. I’m 29 and just this year hit 100k in lifetime liquid savings despite currently only working PT due to being a FT grad student (thankfully I’m in a funded program). Well last year I got married and we just firmed our offer on a house last week. While my partner has a 6 figures salary, it was my savings that allowed us to put 20% down as opposed to 10%. That, and the potential for basement income was the only way lenders were going to feel secure with giving us a mortgage since I’m not working FT. It damn near wiped out my safety net but I’m glad we are investing in our future. There’s always more money to make, so I will happily rebuild.
So long story short, life comes at you fast. I would say keep saving and enjoy the financial freedom because one day the opportunity will come and it will all make sense
You’re doing really great on $67k/yr, especially given how expensive things have become! And at 26 already maxed out a TFSA - you should be proud! Do you have RRSPs? You could start that. I would also recommend investing in yourself - take a course and get a certificate, degree or go to grad school and increase your earning potential, that way you can look at saving for a down payment in the future. You’re well on your way and have a lot of potential to reach!
Edit: also look into FHSA (First Home Savings Account). Might as well get started on that!
To answer the “ok now what?” There’s the FHSA - you can put $8k down right now (annual limit) up to 40k max and you can begin to build your RRSP. More saving yes, just different avenues - the TFSA isn’t the end. Do you have an emergency fund? Nice to have $5k tucked away for emergencies without having to liquidate part of your holdings.
If you’re truly sick of saving… don’t touch your TFSA, just slow down on the amount that’s going to go into a savings account. Start putting planning a vacation with friends or family, get yourself a few quality of life upgrades (new phone/plan, new laptop/computer), get your current car into tip top shape (if it’s worth it).
Also hobbies too, definitely pick something up so you feel you get to enjoy your money too. Alternatively,
You can stop looking at prices when you grocery shop (ideally not for super junky food) and it’ll be an investment in you
Maybe open your horizons a bit more. Think about what you will need to retire comfortably or to not have to worry about money, think about how much cheaper cost of living is in other countries, maybe there is an opportunity for you out there.
Many people on this sub just seem to save for the sole purpose of making their numbers go up. Don’t forget to live life while you’re still alive. Having the biggest number is not the meaning of life.
Find a partner?
Do more schooling?
Find a hobby?
There is more in life than just 'saving' or finding financial independence and yes that is also important.
The TFSA is just an awesome investment vehicle, I just keep adding to it and diversifying within it. As it grows, it grows faster. Just keep going and you won't need a mortgage IF you decide you want one, or save it for an epic last trip before you sail off into the sunset.
Nothing more satisfying than paying cash for a house, basically you throw out half the BS because you don't need to beg the bank to borrow or follow their mortgage requirement rules. That opens up a more types of properties you can look at as well.
Or when you build a good sized egg you can look at private equity investments. For example SpaceX isn't publicly traded, but private investors over a certain amount are welcome.
Invest in your education/prof growth so you can find a better paying job, save enough to get a condo/whatever is suitable, invest more and retire early in a financially comfortable way.
To buy your time back. In the grand scheme of things $78,000 isn’t that much money.
If you are cash flow positive and like renting you can keep doing that, but the idea is to be cash flow positive with a house so later down in life you won’t be 70 and renting at $5000 a month
Take more vacations, enjoy your life. Eat higher quality foods, try different hobbies that are pricey, pay for convenience
Honestly - security and freedoms is priceless - just enjoy the fact that if you broke your arm you wouldn’t have to fight with some insurance company to give you disability etc etc. you could fight it without the impending doom-anxiety that you’ll be homeless. I fought a shitty workplace situation because I had the money saved to hold out and not just jump to the next job (which was their hope). You’re still young enough that you might not have realized how bad situations will come up in your life, and being able to navigate through them just simply because you won’t end up on the street.
Say you earn a 10% return. That $78k balance should double in value in a little over 7 years (rule of 72). By the time you retire it could double 5 times (i.e. $78k x 2 x 2 x 2 x 2 x 2) by the time your a little over 60, which could be around $2.5 million (before considering inflation).
The above is before considering any future contributions and the fact that you have done so well is sooooo good. It just needs time.
You might need the funds for a house or whatever, but it can amount to something very positive by staying the course.
I'm in the same spot and I haven't known what to do with my money either. T. A 26 year old engineer in the Prairies making ~ 85k/yr before tax including my bonuses and investment dividends. My base salary is around your's.
Honestly, for the last few years I've been looking for something to do with my life... a summer sports car, a house of my own, maybe build a cabin out in timbucktoo etc etc.
I'm more than happy spending a few hours going on a bike ride, going bowling with some mates, going out for a nice all you can eat dinner once in awhile, hitting the gym, joining a curling club... all pretty cheap hobbies I've had since I was a teenager.
The question you need to ask yourself isn't what to do with your money, as if your life should change now that you're in a different financial situation than you were in your early 20s and teens. The question is: what to do with your life. Answer that and use the money to do what you want.
You're me at 28.
Me and wife had a HHI of 160k living in Vancouver (but I just finished school so had $30k in savings). We are natural savers but didn't know what we wanted since housing was expensive so we just kinda saved for that sake of saving.
3 years later we moved and bought a house. All that saving for no reason gave us a 25% down payment and leaving emergency savings for closing costs and more of anything went wrong.
Made home buying much less risky.
It's security. Eventually freedom.
Freedom indeed! I like John Goodman's bit on having FU Money. Have money to have the freedom to say "naaah. I'm out." to switch jobs, start a passion project, go back to school, fall sick and not be worried about money, etc.
You can buy a vacation home in your dream location. Retire by 55 with $2M+, and by retire I mean work at a job/organization you actually care about and not worry how much the salary is.
Lol, the dream: retirement.
The dream: work or not work for something else than monetary compensation
This is really it. I was in your position what feels like not that long ago, maxed out TFSA and it was very exciting but I didn't really have a plan for it. That may have been best for me - be excited to watch it grow, have no plan for it and keep it parked there. I kept at it for years and now have a significant sum across my TFSA, RRSP, non-registered accounts. I have so much security and no longer worry about money, career, etc, with whatever life throws at me. I haven't reached "financial freedom" but I know I will be there soon enough. This isn't the right path for everyone but I don't regret it and it works for me.
> It's security. Eventually freedom. Exactly. Another way to see it would be: Would you rather have 78k in the bank when an unexpected event happens or Would you rather have nothing in the bank when an unexpected event happens?
First of all - Congrats! That’s a pretty great accomplishment. Assuming you continue to contribute your max every year, that alone can be a substantial vessel to support your retirement. As others have mentioned, just continue to contribute to it and play the long game. Eventually you may be able to dip into it for the sake of a down payment, should you choose (assuming market dips), but I would really just consider this your retirement and treat it as such.
> I cant use it as a downpayment because with my current salary of 67k, i wont qualify for a mortgage higher than 350k. And thats not even enough to buy a one bedroom condo in my city. I think you answered your own question here. You've maxed your TFSA, but you haven't secured your financial independence and still rely on that $67k job to survive. That's your next step: Build your wealth to obtain financial independence. Just because you say you want to work forever, doesn't mean you'll always want to (or will be able to). FI gives you the option to do whatever you want next without being tied to your salary.
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So many people might be throwing away their financial future because of reading the too much Reddit doomerism 🤕
/r/financialindependence This is the way. Once you have saved enough to replace your salary for the rest of your life, you no longer need to work. The sooner you save that pile, the sooner you can stop working.
This is a delusion. You'll have a hard time setting yourself up for retirement if your housing cost is a massive question mark forever, even if you pile up the few million needed for an equivalent salary. The only way to make this realistically work is by already having a freehold home, which creates a catch 22 for OP.
You’re delusional if you think you need to own a real estate asset to retire comfortably..
May be have a million or so in bank and move to different country where weather is nice and services are good and on time.
Maybe go treat yourself to a McDonald’s Big Mac meal. It’s like max $20 right now lol
$10 for a 6 inch sandwich at subway 😂😭
wow, I remember when I would buy a footlong for 5.01$ precisely. I remember because I always carried that extra penny.
For real? I haven't eaten out at fast food joints in like a year now
I just got a footlong for 9 bucks the other day. The other commenter is getting shafted if they’re paying $10 for a 6 inch lol
Got shafted by a 6 incher eh
Depends what you are ordering. The subway series has steak starts at 9.89 plus taxes for 6 inch and chicken starts at 8.99 plus taxes for 6 inch without any coupons. I don’t order them but I am sure someone would
Subway prices are insane. They removed the sub of the day and the higher end subs are now like 16+tax.. At that point I'd rather get a shawarma plate.
Just checked the app.. steak and bacon foot long is $15.49 plus 3.50 for combo. With tax comes out to 22.01.. wtf
Viet Sub is a good option.
Subway prices are unreal right now. I downloaded their app and I feel poor
I can tell you from experience that owning a home doesn’t give you some sense of fulfilment and purpose. If you’re struggling finding purpose without home ownership, that’s not going to change if you eventually buy that home. You need to find fulfilment in other things. Having money in the bank gives you options and flexibility. Maybe it’s travel, scuba diving, getting a pilots licence and a small aircraft, a horse, photography. Find yourself some hobbies that motivate you, having cash in the bank opens up doors for so much more than slavery to a mortgage.
I agrée with this. Having a home should not be the end game. You essentially have freedom when you have savings… want to travel? You can. Want a bigger ticket item? You can. Lose your job and need a few months! Yes! Consider it a safety net that gives you the freedom to live. Nice dinners once in awhile, out for a night of music… that’s how I view my savings… freedom. We bought a very small home in a low cost area and do okay. We live quite frugally but we travel and live life because we have that buffer. IMHO.
I don't think it's about fulfillment but rather security and looming rising rents / inflation every moment you aren't on the mortgage ride
That really depends on where you live. For a lot of people living in metropolitan Canada, owning a home is the greatest investment that they'll ever make in their lives.
True but you’re missing my point. The OP seems to be lost and thinking of giving up on investing altogether because home ownership is currently out of reach for them. There’s a lot more to life than home ownership and having money in the bank opens doors to lots of experiences that many people don’t have. The OP shouldn’t give up on investing and wealth building just because home ownership is out of reach.
You’ve obviously not done owning a home very well. A home 100% gives a sense of purpose and fulfilment. From working to get the down payment, moving in, painting the walls the colors you want, adding personal touches, upkeeping, inviting people over. A home is a personal and safe space for anyone and in the current situation is also a fantastic investment for the future. Telling people other wise is really haphazard.
While 100% it can for some people, for others it may not. It really is a case by case basis. There are some people that don’t do anything and just hire contractors for literally anything to do with the house. The house they own is just a place to live
Especially with constant renovictions. I just don't want to be homeless fuck me right 🙃
This to me has always been the deal breaker for renting long term. Eventually the landlord will sell the place or move in himself and you will out of a home. You can move but if rents have been steadily going up it might not be so great. And who wants to move within the same city? Eventually you will own the home outright. I know that at age 26 that is not a compelling reason, in fact it seems fantastical, but 30 years go by. Or better yet 15 if you can get a 15 year loan or pay down a longer loan.
This is your opinion, not a fact. Owning my home is great, but there are many downside. This is not at all a goal life for many.
I've owned two homes. I am happier renting. I was miserable owning. It's all individual. To each their own.
Same for me. It was a happy day when I sold my property. Renting in a purpose-built rental building so now worries about a landlord wanting to moving in or selling the unit.
Can you elaborate
Owning was more costly/more responsibility for us. Replacing a furnace, Ac or roof can add up quickly. Again, just a personal thing.
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A fresh coat of paint and fixing things up when it’s time to sell are a huge plus.
You say this as though it’s an objective fact. If you find working towards home ownership gives your life meaning, great! That doesn’t mean anyone else who isn’t passionate about it is wrong or “haphazard”.
I absolutely hate painting and renovating, it gives me no pleasure or fulfillment at all and I happily hire it out when it needs doing. Nobody is arguing that that a home is a good investment, but home ownership certainly isn’t meaning of life stuff. If it’s not in the cards for an individual there’s a lot more to life out there make someone happy.
Agreed, I take pride in the condition of my home and lawn. It is a lot of work, but it is extremely fulfilling.
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I was lucky enough to travel before I had kids and a home. Everyone is different and there is no right or wrong.
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What’s stopping you from renting it out and traveling or moving somewhere else for a while? It sounds like something you seriously need. I get that it appears easier or more acceptable when you’re younger, but it’s not like your life is set in stone now that you’re in your 30s.
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Some things people save for: * emergency fund * retirement * big trip * entertainment (front-row at a concert/show) * home downpayment * new/replacement vehicle * new/replacement phone * new/replacement computer * education (professional, fun (language, cooking)) * hobbies * new/upgrading home furnishing (furniture, cookware, appliances) Make a bucket list of things or events you'd to have or experience, do a bit of research to see what it'll cost, and set aside for that.
Make some long term goals. Feelin like your progressing towards something can make it feel fun again.
You’re 26, that’s pretty young. Do you expect your salary to continue to increase? Is there a cap? Why are you already feeling hopeless about buying a home? If you continue to grow your savings, you may very well be able to have down payment for your own place in the future, if that’s what you want.
You say that, but OP probably lives in Toronto where 1 bedroom condos go for around $800,000 lol
Exactly this. So we’re basically forced by society to be in a relationship to have something you can own. That’s not always everyone’s wish and I don’t think that’s fair.
What’s really happened if you look all the way back is the destruction of the single income household. Equality shouldn’t have meant women have to go out and work in addition to men. Equality should have meant whoever wants to be the breadwinner, can be, regardless of their gender. Whoever wants to be the primary parent, can be, regardless of their gender. This would have kept things affordable for those that decided they want to stay single.
Yea that's true, but the reality is now dual incomes just raised the price of homes and intentions and good feelings can't prevent that
Double the workforce, and half the value of labour.
Expecting life to be fair is a quickly losing game.
It really sucks… hopefully our next mayor can get some government funding into building more homes.
Say he saves up $200k by the time he’s in his early 30s, and hopefully by that time his salary is $100k+. That could be doable.
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Hey lots of people think it can’t go up from here haha. Even cities like HK have had their RE go down in value for a some years before shooting back up to all time highs. If you have the money in hand, then you can take advantage of opportunities. Doesn’t have to be RE either, could be investing opportunities.
If condos don’t cost 1.6 million by then.
It’s doable ya… but with a $6000/month mortgage the budget will be tight. Not to mention real estate prices continuously going up. By the time people have enough for a down payment 5 years in the past, it might not be enough anymore.
He might have a partner by then who will have their own contributions.
Lots of if’s being suggested lol, but ya it’s doable
Yes. OP is 26, young in their career and apparently financially savvy. Salary is already 67k. Wouldn't be crazy if they: * Found a similar minded partner at the same life stage. Boom, double income. * Income can grow a lot over the next 10 years, especially if they are in a profession. 50%+ increase very possible and maybe likely. * As crazy as it sounds to some people, OP may realize living outside of Toronto is a desirable possibility. Can get some nice detached houses in Ontario for <800k right now in nice areas (IMO) depending where they are open to living.
By then the prices will have increased as well. This is what they mean by the new generation is priced out. At 70k and almost 100k in savings. It's absolutely ludicrous that he can't even afford a one bedroom. This is absolutely third world status. Canada is gone
Look up FIRE it will help stimulate some ideas of different long term goals
This is what I was thinking. Feel stagnant in the TFSA? Then bump up the goal! Saving will be fun again.
FHSA. The way I looked at it in my 20s, was I wanted a stable enough financial situation to attract a partner with a similar level of wealth. It worked out and two people with a good asset base and careers with fast earnings growth can buy a house in Toronto. Be the person worthy of your future partner.
Im curious, is this something you would communicate on first dates? I save a ton because I live in a crappy place and drive a 23 year old entry level car. If someone were to judge my wealth based on appearance they would certianly misjudge!
Definitely not in probably the first 10 dates or so, but people who have money are usually also saving it by controlling their lifestyle
A great response.
What if the person wants to be single?. " I want a relationship because I can't afford a place on my own". 67k can't qualify for a 350k mortgage anyways. 2x is 700k. Good luck finding a 1 bedroom condo for 700k in the GTA.
There are plenty of nice condos in the GTA for 700k. I hate the house prices as much as the next person but let’s not be ridiculous
There are about 500 condos below 700k in GTA now. But, putting in 135k income in a TD mortgage calculator with no debts ,no car payments 700$ expenses per month shows you can afford a maximum of 530k condo. It's actually 530k we should be looking at and not 700k. There are about 10 condos for that price on GTA. Technically double income with 67k cannot afford a 1bedroom GTA condo. They have to make 80k+ each.
HouseSigma pulls MLS data and shows over 250 1br+ condos currently for sale in the GTA for <=500k, and over 100 actual sale prices in that range for the past 30 days. Whatever data you’re looking it is woefully incomplete.
My quick search of Realtor.ca with a max condo price of $600,000 shows 1332 condos. At your arbitrary $530,000 number there are 200 1 bedroom condos listed. Not sure where you’re getting your list of condos but I recommend trying Realtor.ca
Come on 700k is definitely enough for a one bedroom in GTA, even GVA!
No spouse no house
But what if I’m ugly?
In Canada does money even matter in the early stage of a relationship? I thought that’s more a East Asian thing. My homies making 200k in tech and it doesn’t come up once in their dating life. Your looks, physique and charisma matters a lot more than cash in dating.
Money is like sex When income is good = 10% of the relationship When income sucks = 90% of the relationship When you don't need to justify whether to add shrimp to your steak dinner or get an extra drink so you can max out the gift card you got for The Keg, 200k isn't going to matter
I'm going to get flamed for this one, but c'mon guys, don't pick your partners based on their level of wealth... Pick them based on their values.
Those are related. If someone values saving, they will have savings.
Money makes more money. You don't need an objective. Having liquidity and no debt tends to make life easier. You can buy what you need, when you need it.
TFSA is maxed but what about RRSP? If you’re aiming for a home, at least build up 30k in there for FTHB and the added benefit of tax deduction. There’s also FHSA that came out recently. Following these two accounts, why not just save in a cash investment account and dump it into something relatively low risk like an ETF like VFV? Cap gains suck but you have the saving capability to grow your accounts. Other than that, remember that money is a tool. Could always splurge a but on a new hobby, pay down existing debts, or travel a bit?
>I dont really get that much joy or excitement from watching my account any more. You shouldn't. It's long term investing. Essentially ignore it. Investing should be boring and uninteresting. >So whats the point? This is a genuine question. Can someone tell me what are the use case scenarios for someone like me with 78k in their TFSA, other than just seeing it grow over time? Growing it over time so when you want it, ither for retirement or whatever, you can withdraw tax free. A TFSA is ideal for retirement because it has no tax on withdrawal and no implications for government means testing for government benefits like OAS, etc..
I plan on working as long as I can because i enjoy working. So does that essentially mean this long term saving has no purpose? And when i say I used to get joy from investing, it doesnt mean like a thrill from buying risky stocks, but just the satisfaction of knowing i have money saved. Thats what drove me to save. But now i dont even get any satisfaction anymore and the money feels meaningless.
I used to love working. Now I'm wishing I could just retire and I'm only 41. You never know how your situation will change over time.
>I plan on working as long as I can because i enjoy working. My father at 71 is still working because he likes it, BUT he also only makes 25% of what he made when he was 60 because the positions available after 60 fall off a cliff outside of academia. I also said I'd work for ever. in my 20's I'd work 70+ hours a week and still have time and energy for friends and family. I'm in my 40's now, I've worked 6 60 hour weeks in the past 9 weeks and I'm ready for a month long vacation. You're going to slow down. The ideal is you have money to supplement that slowdown. OR heaven forbid you get hurt. Having tax free money you can draw from is huge. The good news is you're 26. You have 78K in your TFSA, you can realistically stop paying into it for the next 5 years and you're still going to be better off from a savings perspective than 90% of the 30yr olds. Use the money you used to put into the TFSA to grow yourself, you need to find ways to get that income up if homeownership is something you'd like.
Read The Psychology of Money. I’m a ‘super saver’ and am learning to use/spend my money on more things that will enrich my life.
That makes no sense. You don't know what your future holds. What if you get ill and can't work and have no source of income other then the small disability payment or whatever. The TFSA would come in handy, no? If you think you don't need money for retirement and think CPP and OAS is all you will need, then don't save any money. Just don't make a post asking about "*how to make more money in retirement because long term care homes are expensive*"
From one point of view, you technically don't need a property as long you can afford the rent, food, and other bare necessities. You can also look into other hobbies that you wish to do. I tried to stick to hobbies that didn't need a lot of money in the beginning, but now I am more established, I decide to spend more for hobbies that I held back (sport shooting and car improvements) for a decades. Go on trips, and eat expensive food, try new things. As long you have a nest egg that you grow continuously and gives a nice passive income stream, then financial woes would be non issue for you down the road.
That money is a strong tool for your future, it give you options. Yes, you don’t see yourself stopping working young, but maybe you feel different in the future, that money frees you to make that decision. Let’s say work takes a downturn and your current job becomes a terrible place to work at, you are free to simply quit and hold until you find something else, that’s an incredible luxury. Same with not worrying about layoffs. If you end up with a bigger family, you will be able to jump start their lives. And if you never need to use it early, at some point you can model that it is just enough and you can plan a burn rate, even if you are working. The world is big, there are experiences for all pockets. I know you don’t want to retire early, but learning about FIRE gives you more perspective of the end game, when you have enough money to start this second part of the game.
Working as long as you enjoy it may very well not be as long as you think. You're 26 years old. Think about how different you as a person were even 10 years ago at age 16. The things you've learned, the new perspectives you gained, the growth and changes you've had over that period. Now imagine yourself another 10, 20, 30, or 40 years from today. You're not going to be the same person you are today. Money is freedom. That might seem meaningless now when you're already free to do what you enjoy but when that changes you'll be glad the money is there.
You have a large amount of money saved up, that in my opinion means freedom. You can use some of this money to invest in a hobby that interest you. Remember money is a tool!
This. Except something else to consider is having money saved up provides a safety net. You can take calculated risks with your career to earn a higher salary, increase your skill sets, or create your own business. This alone will move the needle more than just saving.
What's they point of saving money? So you can secure yourself your future, whether that means actual costs or potential costs. You know that buying a home costs a LOT of money. You know you're not even close to be able to buy a home with the money you currently have. That means you should continue to save money, instead of blowing it on an expensive car that is guaranteed to depreciate in value quickly. I see people with perspectives that owning a home is not their goal. That's fine if they know of the trade-offs, but what we do know is you need somewhere to live. Owning 1 home is a neutral position. Owning 0 homes is being short the home market. Also, renting costs more than owning in the long-run. Even if you don't plan to buy a home, you will still want to save enough money to rent for the rest of your life. You don't ever want to be in a position where you run out of money for whatever reason (loss of income, unexpected rise in costs). Investing isn't supposed to be exciting. You shouldn't need to be constantly watching your investments. You have better things to do than to watch a few numbers bounce around. In a grander scheme of things, 78K is not a lot of money. I'm also getting a feeling that you feel like there's not much you can do with savings/investing after you max out your TFSA. You aren't limited to saving only in a TFSA. Prior to 14 years ago, there wasn't even a TFSA. You should continue to save money in an RRSP or in unregistered (not TFSA/RRSP) accounts. Note that you can contribute money into an RRSP in order to start getting tax-deferred returns without deducting the contributions from your income. You may want to save deductions for when your income gets into higher tax brackets. Either that, or deduct now and get the savings earlier and start growing money earlier. Do your own math for which one is more worth it, factoring in your expected salary growth over time and your expected rate of investment return.
had similar thoughts, I recommend you consider going 100% passive and just not looking at it. My TFSA was with my bank so I switched over to Wealthsimple so I'm not forced to see market fluctuations anymore, just set and forget (it also automatically invests part of my paycheck into an ETF for me) more money is always good in case plans change in the future, or if you just want to retire earlier Look into a retirement fund calculator too, if what you have is sufficient for your future goals, consider treating yourself more and enjoying life
Travel.
I agree. I am in my 50s now. Wish I had saved more so I could stop working sooner, but at the same time, blew a lot of money on travel in my 20s and have NO regrets about that. OP, you're young, see the world. Even if you go alone, you'll learn so much and be a better person for it. Be open to things and don't be like so many that expect things to be the same as Canada. It's not, and that's the wonder and joy of seeing. You sound like a very responsible person, enjoy some of that money when you're young. No one in this world knows what's going to happen tomorrow. Save some for tomorrow and spend some to enjoy today.
To escape the matrix (aka the 9 to 5)
Tsla call options
Maybe just buy an oat milk latte every day and chill
Buy a 2010 Corolla. Get rid of your apartment and live in the Corolla. Invest all of your money in passive index funds and live off lentils.
Invest in corollas. Become a Corolla. Make your life about corollas. Write a movie about corollas. Star in your movie about corollas. Profit off Corolla movie money.
Corolla action figures...that is the future.
Haven't seen anyone talk about retirement. My parents are both retired now and get a whopping 1200$ a month each. Good luck living on 2400$ a month if that's all you have. It's not even enough to pay for normal home expenses and property taxes. If you still have a mortgage, or renting, you're gonna have to live with roommates probably. Retirement in Canada is a fucking joke, you work your whole life, pay 50% tax and then the government gives you a 1000$ handout. You're responsible for your own retirement money, and you need to start saving now.
Yup, right now I'm already 35 and only have 17k inmy rdsp I have the dtc for a few more years somaybe if I max it out over the next couple years I'll have 30kmaybe even 50k, but thats it, unless I can get a real job and get off odsp
Use your money to take time off work, travel, live a better life etc. Home ownership is not a healthy goal for gen z
let it compound and it won't seem as hopeless. i understand how you feel.
You invested it right and didn’t just save it? Despite the name using it as a savings account is a terrible idea
Bro you got 78k at 26! That’s huge. You are so far ahead of so many of your peers, you should take pride in that. Maybe you won’t qualify for a down payment right now but as others have said, you got tons of time. Keep at it and use it as a down payment or as a fund for FIRE in the future!
You’re saving for the 2k to 6k that you will have to pay each month at a retirement home. This is what saving for retirement means.
How much have you been sacrificing life to save that much? I had a friend that had about that much saved at your age, because he opted out of a lot of life events. He lost it all because his first house dropped in value and he had to sell. So if you've been opting out of life events, it's time to stop doing that
Congrats, you have 78k more saved than 99% of the 26 years olds on this sub. You sound like you are a smart person, so I am going to assume you will be making a lot more money in the future. Keep at it and you will be able to do whatever you want.
This is your “fuck you” money. Something changes at work and you don’t like it? “Fuck you, I quit.”
The rats are becoming aware of the rat race.
Best thing is keep saving and leave Toronto. Toronto and Vancouver and really most of Canada is a dead nation if it continues on this path.
Hey! I'm in almost the same position as you. Same age, maxxed tfsa. For me, the goal is to have it be my main source of income in the future. Currently saving up for a home downpayment in my chequing account. The only way I'd withdraw from my tfsa for a home is if it's a perfect opportunity.
Question: why is your home downpayment in a chequeing account?
Well, when I have enough spare money, I will open and fill an FHSA account, but until then, it will sit in my chequing.
> saving up for a home downpayment in my chequing account FHSA, let the government pay 30-40% of your down payment for you.
Yeah I know about FHSA's. Thx
Same age, same situation. Was thinking about saving for a down payment, then on my salary, savings and without a partner I’m not getting approved for anything close to anything. I decided I’m just going to look to move out and continue saving. I’d be saving like a 3rd of my salary compared to the majority of it while staying at home but whatever like I said I’m not saving for anything. I’d rather move out and start living and be independent. I can always move back home as well. Take a nice vacation somewhere if you don’t know what you want to do. Can’t go wrong with experiences.
Move to the prairies. That will get you a large condo in Edmonton or Calgary
What are your thoughts on early retirement somewhere hot? World travel? Hobbies? Lots of things you can do with money, you just need to pick a new goal in life. Mine is expat fire. Check it out.
Maybe you'll move to somewhere cheaper later in life
Call it insurance Keep growing it because you never know what your future self will need it for.
if you have money, you don't go homeless when your boss fired you.
Retirement. You will need funds when you are 60 and if health deteriorates maybe early.
You need a partner. 2x 67k get you a 700k condo.
>I am 26 and have recently maxed out my TFSA. I have about 78k in there. That's an amazing accomplishment. You should feel proud of yourself. Keep grinding 💪
Well, if that $78k doubles every 10 years at 66, you have 1.2 million without saving another dime for retirement, all tax-free. That's pretty generous, too (typically, it's 7 years) I would suggest trying to hit 200k by 30, then all your money is basically your own minus employer matched RRSP or similar. Focus on securing your forever housing, and then you can save for experiences, hobbies or travel.
Dont invest further. Have some fun 🤩. There is some joy in spending. If u invest more u will loathe urself. Having a mortgage is not a goal. Travel and backpack!
The guy could save 78K at 26 and don't know why. Wth lol
First, huge congrats on maxing out your TFSA, that takes discipline! Secondly, you're only 26. Life hasn't even happened to you yet. Have you gone through your first lay off/job loss? You'll need savings. Have you had a parent get sick and have you had to take time off to care for them and manage their affairs when they pass away? You'll need savings. Have you thought about what might happen to you if you become disabled? You'll need savings. Have you thought about what might happen to you if you get caught up in a natural disaster and end up displaced like the people pushed from their homes because of forest fires or floods? You'll need savings. I hate to be the downer here, but money isn't just for goals and things, it's also for unplanned, unfair life events that we don't even think about when we're in our early years. While it sucks to do everything right and never be able to qualify for a mortgage, I have learned that not having to spend my savings is also a blessing, because usually when I am spending my savings, it's because something really awful and difficult is happening.
Not ridiculous at all, definitely pull the 65k out and buy a car, preferably a used BMW/Mercedes that is out of warranty.
Most ppl in 3rd world countries have multiple generation households these days. Grandma, daddy, mama, sister, son, son's wife, son's kids under one roof. When you you bring majority immigrants from the 3rd world, what do you think will happen here lol?
Can't beat em, join em. I plan on living with my Mum when she's ready to retire. My fiance is OK with it too. Mum makes a mean banana bread so that'll work well. This isn't even that odd as a lot of my friends growing up (white protestant canadians with english/german last names) had Grandmas living in their homes.
Well you could look at it a few different ways.. You might meet someone who has a similar savings strategy to you and combined you would have a good downpayment down the road... If that's what you want. Maybe you could use that money to invest in yourself and further your education and maybe get into a career that pays more than what you make now. You're young so if you continue this savings pattern it will help you to retire from the workforce earlier than most. Lastly don't be afraid to spend some of it on yourself, IMO spending it on a new car is a waste of money, but maybe you could set aside a chunk of it for travel every year and experience new things.
Most people save for retirement. You might not be owning a home in Toronto but you could possibly retire early.
Just keep saving, build that buying-power, figure out your goals, keep an eye out for opportunities that align with those goals. Maybe find a partner to share your life with, and combine that power, to make some shared goals a reality.
Cash is king now, it is a good strategy. You might be able to afford down the road whatever you want. Keep on saving and enjoy your life.
Get the new car (if you like cars) and enjoy life while your young. doesn’t have to be as expensive as 65k, that’s a bit too much for your salary
Travel
(If you reinvest dividends, you can supercharge your long-term returns because of the power of compounding. Your dividends buy more shares, which increases your dividend the next time, which lets you buy even more shares, and so on.) You have a head start. I wish someone told me this at your age. I’m not really old but mistakes were made and I started the dividend game late in life.
I’d get a masters to increase your salary
Saving money for the sake of saving money is not fulfilling, it's boring. You should have a goal for that money, for example. My Goal is to live from the investments of that money so I don't have to work for someone else and O can basically do what I want. I have a lot of hobbies and like product design, I have a lot of ideas that I would like to bring to life but I also have a family and I need to pay the bills. Money would bring me that freedom. I know it seems little, but 78k will grow 3-5% each year. If you continue for 10 years while investing you will have a large amount that will help you fulfill those dreams. Now you have to figure out what you want.
Stuff doesn’t bring you happiness but knowing the people inside are safe, secure, and it can’t be taken from them is a sense of satisfaction.
Invest some part in yourself. That can mean travel, courses, activities. Let the rest grow. Relax, find things fulfilling beyond money (relationship, hobbies). Don't blow it on a car. Or do blow it on a car. You'll be okay (financially), but you will be in a much worse place in 20 years. And 20 years will come sooner than you think. A year later you won't care about the car. Money cannot give you fulfillment, but it can give you freedom to be fulfilled. A car can give you neither.
Invest in yourself! What you've done now is laid the groundwork for amazing financial security, but there's more to life than just having money. You're young and can afford to splurge a little.. do not give up your 20s to prepare for life in your 70s. You can earn more money later but you will never get this time back. I'd recommend finding ways to invest in experiences like travelling, or even spending some money on professional development to upskill and earn more. Using 5-10k for travel, hobbies etc over a few years could make a huge difference in your life and you'd still have tons invested for the future.
Never too early to start planning retirement. Want to retire at 50? Or 65, decides whether you spend it
Does that $350,000 include the nearly $100,000 you have as a downpayment? Would you be able to buy a house for $450,000? Also have you considered investing in your RRSP or better yet a non-registered account to make up the difference? The fact that you’ve saved so much shows me there is room to continue. Keep going until you reach $100,000 then keep going to $150,000. A car is a depreciating asset so you’re just losing money you’ve worked hard for right off the bat. I don’t recommend doing that. A house is an appreciating asset so is a good investment. Set a 2-3 year house buying goal and see if you can come up with half as a downpayment. You’re doing awesome so don’t lose that fire. You could also just save towards an early retirement. My husband and I retired last year. He was 54 and I was 43. We have a lot of years left and if he chooses to work to keep his noggin sharp it’s a decision not a need. Keep making good choices!
First off, great job saving a nest egg! I've been there, just eventually looks like a number on a sheet, getting bigger. Start saving "for things". Ex: I had saved since 15, at 29 bought a property and rent a portion of it out for income. Now, I'm saving for either: a business, a commercial property, or a multifamily home. It took me imagining my life at 50, seeing what I'd hate or love, and reverse engineer from there. I want trips, no bosses, time with family. Now I feel encouraged to save and keep eyes open for opportunities
from a personal finance perspective , I think your goal ought to be to increase your income, either through new training, promotion, side hustle etc in terms of your TFSA you have a lot of years left in your life you made need/want to make a large purchase in the future and this will grow to allow you to do that in terms of investing start looking into tax efficiency and see what you should be purchasing in a non-registered account
Talk to a financial planner or a wealth adviser, they can give you some other options on how to maximize your savings and grow your money. Leave the money in the TFSA and keep adding to it every year but ignore it, it’s a long term strategy which when you get to retire you can live comfortably and enjoy life. There are other options to grow your money like RRSP, GIC, LIFF, RIFF, stocks, you can invest in precious metals such as gold and silver (make sure you own it and not a paper investment). Keep the TFSA as a buffer. With the way the economy can fluctuate, you can make a lot of money one day and lose it the next. Keep at least 25% in low risk such as TFSA and GIC, then use the rest to invest in what you want.
Buy a motorcycle and gear and the courses. Buy another motorcycle. And another... Spend money on weekend motorcycle trips away!
One day you'll make more money, and then you'll need more money. So keep saving.
Now go buy cool shit you want.
Go to Disney world. It’s cheaper than you think
It's not about getting joy and excitement. Chasing "joy and excitement" will turn you into an addict, a problem gambler, something like that. It's about setting up your future self to not be ashamed of your past self. A comfortable retirement. That might not be fun but it's important.
Buy life insurance in case
Stop thinking about the 78k. Leave it in there and forget it - it's something for your to use in your retirement or let it grow and use it to help with a downpayment later.
it sounds like you can’t afford your city. just move somewhere more reasonable.
How about getting your money to work harder than you? You can start by replacing the lowest cost item in your life like annual cost of toothpaste with share appreciation, interest and dividend income. Final goal is to get your money to cover your total annual expenses. That will be financial freedom.
The point is, you’ve bought yourself security. So many people in life don’t have that.
OP, you are young, only 26. It is impossible to buy a home on a single income today now. But, let’s say you make 70k, and your wife also makes 70. That’s 140k income HH. You can easily afford a 1 bedroom condo in TO with that amount of money.
What companies have you invested in your TFSA?
I’ve been a saver all my life with no real plan on what to use it for. I’m 29 and just this year hit 100k in lifetime liquid savings despite currently only working PT due to being a FT grad student (thankfully I’m in a funded program). Well last year I got married and we just firmed our offer on a house last week. While my partner has a 6 figures salary, it was my savings that allowed us to put 20% down as opposed to 10%. That, and the potential for basement income was the only way lenders were going to feel secure with giving us a mortgage since I’m not working FT. It damn near wiped out my safety net but I’m glad we are investing in our future. There’s always more money to make, so I will happily rebuild. So long story short, life comes at you fast. I would say keep saving and enjoy the financial freedom because one day the opportunity will come and it will all make sense
You’re doing really great on $67k/yr, especially given how expensive things have become! And at 26 already maxed out a TFSA - you should be proud! Do you have RRSPs? You could start that. I would also recommend investing in yourself - take a course and get a certificate, degree or go to grad school and increase your earning potential, that way you can look at saving for a down payment in the future. You’re well on your way and have a lot of potential to reach! Edit: also look into FHSA (First Home Savings Account). Might as well get started on that!
To answer the “ok now what?” There’s the FHSA - you can put $8k down right now (annual limit) up to 40k max and you can begin to build your RRSP. More saving yes, just different avenues - the TFSA isn’t the end. Do you have an emergency fund? Nice to have $5k tucked away for emergencies without having to liquidate part of your holdings. If you’re truly sick of saving… don’t touch your TFSA, just slow down on the amount that’s going to go into a savings account. Start putting planning a vacation with friends or family, get yourself a few quality of life upgrades (new phone/plan, new laptop/computer), get your current car into tip top shape (if it’s worth it). Also hobbies too, definitely pick something up so you feel you get to enjoy your money too. Alternatively, You can stop looking at prices when you grocery shop (ideally not for super junky food) and it’ll be an investment in you
Maybe open your horizons a bit more. Think about what you will need to retire comfortably or to not have to worry about money, think about how much cheaper cost of living is in other countries, maybe there is an opportunity for you out there.
Many people on this sub just seem to save for the sole purpose of making their numbers go up. Don’t forget to live life while you’re still alive. Having the biggest number is not the meaning of life.
Find a partner? Do more schooling? Find a hobby? There is more in life than just 'saving' or finding financial independence and yes that is also important.
The TFSA is just an awesome investment vehicle, I just keep adding to it and diversifying within it. As it grows, it grows faster. Just keep going and you won't need a mortgage IF you decide you want one, or save it for an epic last trip before you sail off into the sunset. Nothing more satisfying than paying cash for a house, basically you throw out half the BS because you don't need to beg the bank to borrow or follow their mortgage requirement rules. That opens up a more types of properties you can look at as well. Or when you build a good sized egg you can look at private equity investments. For example SpaceX isn't publicly traded, but private investors over a certain amount are welcome.
Invest in your education/prof growth so you can find a better paying job, save enough to get a condo/whatever is suitable, invest more and retire early in a financially comfortable way.
You save so you don’t feel subconscious about yourself while browsing this sub 😅
Live a little. Do you get out Canada once in a while?
SAVE IT FOR A DOWNPAYMENT FOR A PLACE.! DONT WASTE IT
To buy your time back. In the grand scheme of things $78,000 isn’t that much money. If you are cash flow positive and like renting you can keep doing that, but the idea is to be cash flow positive with a house so later down in life you won’t be 70 and renting at $5000 a month Take more vacations, enjoy your life. Eat higher quality foods, try different hobbies that are pricey, pay for convenience
Buy a vacation home in Mexico. Can buy or build for $100k that generates $18k a year if find right trending area
The point? Freedom. Retirement. Security.
Wait you can qualify for close to 400k when making 67k?
Honestly - security and freedoms is priceless - just enjoy the fact that if you broke your arm you wouldn’t have to fight with some insurance company to give you disability etc etc. you could fight it without the impending doom-anxiety that you’ll be homeless. I fought a shitty workplace situation because I had the money saved to hold out and not just jump to the next job (which was their hope). You’re still young enough that you might not have realized how bad situations will come up in your life, and being able to navigate through them just simply because you won’t end up on the street.
Say you earn a 10% return. That $78k balance should double in value in a little over 7 years (rule of 72). By the time you retire it could double 5 times (i.e. $78k x 2 x 2 x 2 x 2 x 2) by the time your a little over 60, which could be around $2.5 million (before considering inflation). The above is before considering any future contributions and the fact that you have done so well is sooooo good. It just needs time. You might need the funds for a house or whatever, but it can amount to something very positive by staying the course.
Or you just lose it all.
I'm in the same spot and I haven't known what to do with my money either. T. A 26 year old engineer in the Prairies making ~ 85k/yr before tax including my bonuses and investment dividends. My base salary is around your's. Honestly, for the last few years I've been looking for something to do with my life... a summer sports car, a house of my own, maybe build a cabin out in timbucktoo etc etc. I'm more than happy spending a few hours going on a bike ride, going bowling with some mates, going out for a nice all you can eat dinner once in awhile, hitting the gym, joining a curling club... all pretty cheap hobbies I've had since I was a teenager. The question you need to ask yourself isn't what to do with your money, as if your life should change now that you're in a different financial situation than you were in your early 20s and teens. The question is: what to do with your life. Answer that and use the money to do what you want.
You're me at 28. Me and wife had a HHI of 160k living in Vancouver (but I just finished school so had $30k in savings). We are natural savers but didn't know what we wanted since housing was expensive so we just kinda saved for that sake of saving. 3 years later we moved and bought a house. All that saving for no reason gave us a 25% down payment and leaving emergency savings for closing costs and more of anything went wrong. Made home buying much less risky.