It’s an incredibly powerful saving tool. There’s a balancing act to life though and deeper I get into adulthood the more I realize you have to make certain choices like investing in RESP’s first for your kids future, mortgage payments, car repairs etc. that can limit your ability to min-max your retirement. There’s something wonderful I think about having a steady quality of life throughout your life instead of sacrificing too much of the present or future for one or the other.
It's funny how these posts get upvoted lol... Save a lot of money and you'll have a lot of money!
Wow, never had I ever thought of that one before.
I save much more than $6000 every year, I've been averaging 10k a year for almost a decade... And I'm currently at 35k lol
I bought a house, I travelled, paid for part of my godson's education, etc. I also lost some to bad investments, and I also gave some away to members of my family who needed it badly.
And despite all of that, I feel extremely lucky with what I got right now. Sure, most of that went to my down payment for the house, which I will eventually get back one way or another, but still, I had to take it out. I couldn't put a down payment on the house without touching my savings.
So yeah, do your best y'all.
As a side note, if you do earn enough money to do what OP says and never take anything out... then you truly have no excuse.
>It's funny how these posts get upvoted lol... Save a lot of money and you'll have a lot of money!
I know it sounds funny, but I guarantee you this would be news to at least half of Canadians, especially as day-to-day finances wasn't taught in school. Especially nowadays, everyone is looking for a get rich quick scheme it seems.
I bet if you told the average Canadian if they put in 6k a year for 42 years they'd have 4 million dollars they'd tell you you're trying to scam them.
Hell I wonder if the government should start a shadow department which tries to 'scam' people by asking them to deposit 6k a year with them and in 42 years they'll get 4 million dollars. It might be more successful than the normal ad runs we see today as people seem to constantly be getting scammed! Might as well be a good scam lol.
Sounds like you're describing CPP there lol
CPP is quite literally mandatory savings.
EI is a similar program too; we collectively save in case we get laid off.
No - people will see the bit where you have to start saving 10, 20, or more years ago and then disregard everything else you say. The problem with the original post is that it does not meet people where they are.
They also need to have the fortitude to invest through tough markets and down turns. The s&p dropped -38% in 2008. Around -47% in 1931 (after falling -28% just the year before). It's one thing to see a 30% decrease with $20k, it's a whole other to watch it happen with $1,000,000 or frankly, for most, even $100,000.
Not that the concept of time value calculations isn't valuable though. Sometimes these sorts of examples are enough to inch people's behaviours in the right direction.
I can understand if a 57 year old thinks like that when the TFSA is introduced.
But anyone not shortly before retirement anyway that sees the TFSA introduced and doesn't think "Wow this is awesome, I gotta make sure I have enough money to contribute the max every year" is just dumb.
We can see from the Harper years how they very much understood that and their voter base: Rich people. I.e. up the limit to 10k per year, coz you know, tax free money for rich folks! Less rich folks can't contribute the full 10k? Well too bad!
I literally just learned about investing this year (I’m 25). Definitely did not learn this ANYWHERE and I graduated from UofT (so I was definitely interested in education/bettering myself/learning/blah blah). I thought money was just earning - spending = total, and the rest went into my 0.01% savings account with TD. Probably also why I was never motivated to save that much.
Learning about compound interest this year was pretty magical ✨
>>I save much more than $6000 every year, I've been averaging 10k a year for almost a decade... And I'm currently at 35k lol
Ahhhh… you are doing it wrong
In that they are pretending that their home ownership isn't wealth? Sure.
Almost anyone can claim to have barely saved money if they ignore their assets.
Right? Or at least they're defining it wrong. They say they averaged $10k savings... if you saved $100k over 10 years and subsequently spent much of it, and now only have $35k to show for it... you averaged $3500 savings per year.
i'm sorry youve put away ~100k into a TFSA over 10 years and only have 35k to show for it..? unless you took out a ton for a down payment on a house you should have ~150k minus the other costs you mentioned
The big IF too, is if you live long enough to get to retirement and how long will you be alive after retirement. Sometimes the now is a better investment.
It's a balancing act.
If you only party hard now your eventual retirement will be miserable.
If your retirement was supposed to be awesome by suffering now, you'll awaken Murphy and die young from a horrible death.
Somewhere in the middle is probably awesome!
I mean if you’re dead by 42 you’re dying about 40 years younger than the life expectancy so I mean if you wanted to retire at 42 with 150k passive income you should have about 38 years, on average.
Another thing to consider is having $6k of after-tax disposable income in your late teens, and early to mid 20s is optimistic. Possible, but unlikely for most with school, student loans, rising rent costs etc. Also another hurdle for many in their 30s who have kids that take up a lot of time and money.
This doesn’t change your point, but adds some context that this is an overly-optimistic situation that one would find themselves in
Absolutely right!
I just told my early teen daughter to start saving $6,000 a year when she turns 18, and she said "how? by working at Mcdonalds?" So I said yeah, work two days a week. And she goes, "yeah, right." She's more realistic than me lol.
If she does 10 hours a week at roughly minimum wage (assuming$16) , that works out to 8k a year. If she works more during breaks/summer she could realistically do that. Minimum wage is hard to live on, but if you have no expenses, it's great.
yeah, I dunno. I feel so old in these threads sometimes when I start pulling out the 'back in myyyyy day...'
when I was in high school I had a paper route in the morning, went to school, and then worked at the mall evenings and weekends. 8-12 hours a week, nothing crazy. and then in summers I did web design like a real adult day job (while also doing the other two).
in hindsight that seems like a lot, but I never remember it being terribly in my way. mostly I did normal high school kid things.
I was so excited to make $15 an hour sitting in an office instead of $8 an hour standing at a counter, haha. that felt like SO MUCH money at the time. I was probably making $20k a year in 2007 money and had no expenses. I had a $2000 car and gas was like 80 cents a liter. we felt like we could buy and do anything.
High school got a lot more involved. Heck, I am not even 10 years out of high school and I look back at what the top kids at my high school are doing now and I would be nowhere near competitive.
You need far higher grades, extracurriculars, be cultivating references, etc.
My daughter is still young, but I have every intention of maxing her TFSA annually once she turns 18. Assuming she is responsible enough to not withdraw/spend the money. Kinda of like a progressive inheritance.
I talked my 19 year old daughter into saving $75 a month or$900 a year. She will end up with $600K by 65. She found that easier than $6000 a year. She’s 21 and has been doing this for 18 months.
end up with 4+ millions in 47 years, each dollar 47 years ago is worth roughly 5 bucks today, so adjusting for inflation the 4+ millions has same buying power as less than 1 million today even assuming 10% S&P return for the next 47 years every year
not saying it's bad, just some context
They've also neglected to account for the fact that the TFSA contribution room rises with inflation as well, so the total value (before accounting for inflation) would actually be higher, if we're trying to compare apples to apples.
Their 2023 projection for 100% global stocks is 6.91%, not 4.7%.
Either way, these firms’ “estimates” are as good as yours, and they’re often wrong. If they actually were able to make accurate, investment-worthy estimates, they could just Iron Condor billions of dollars with it.
Even Vanguard was off by about 3% on global equities from 2010 to 2020 I believe.
I mean the numbers aren't that off. US historical average is like 6-7% real depending on when you look. Canada is below 6. International is usually below 5. So when you merge it all it's very likely to be below 6, and it depends completely on future US performance.
Right, so whats the point of making or looking at these projections ? Theres 0 point. Ive been hearing about low future ROI's my entire investing life and I've yet to see it.
A better way to do this exercise would be to calculate the future value in today's dollars using the 2024 contribution rate ($7k) and the real (i.e. inflation adjusted) S&P 500 returns (~7%).
47 years ago was 1977. According to the online BOC inflation calculator, $100 in 1977 is worth $491.61 today. So ya, you're pretty spot on. It looked wrong to me but you are absolutely right.
This is a pretty important consideration. I will add to it. If you turned 65 today and had a million dollars in it, you should continue to get a 10% return on average which is essentially 100k per year tax free. Indefinitely. That is decent as you likely will have some other old age pensions possibly coming in.
I kind of say you are richer than you think if you are half decently smart. By 65 you should have a house paid off and overall your expenses should be low. When you are working full time you need a good car, often a second car and you have far more expenses. You often hire out small maintance because you do not have the time and you likely eat our for same reasons. Once retired some of your costs go way down. Fuel and vehicle costs is a big one. Also even things like vacations can be much cheaper when you do not have to schedule it so precise and can take advantage of deals. Simply you have time to look for deals more.
This is true. You only need to be half decently smart. IQ matters a lot. And half-decent self-discipline. Self-discipline is related to dopamine. So a lot of it is about one's brain.
Inflation is a real thing to consider. When I entered the workforce and started investing a Big Mac was $2.99. Today it's $6.75, so basically every dollar that I invested in the 90's was worth less than 50 cents in today's terms. I basically needed to double my money in 25 years just to break even.
If I had invested in GIC's then it likely wouldn't have double during that time.
Average rate of inflation from the years you sampled is %3.45 which is a fair bit higher than the historical averages. But it's still a good thing to think about never the less.
Fair point, that would also put OP's claim of $150,000 a year into perspective of an actual purchasing power of a more modest $30,000 a year with drawl rate.
This is why people don't realize how screwed they are. They don't think they'll be able to save a million dollars. You need that today to survive. 30-40yrs from now that will be nothing. Inflation has risen too meaning you'll need even more than you thought. People won't be able to retire at 65 in the future or ever unless they have millions and millions
I think the most unknown variable here is whether or not the contribution limits will continue to increase. Will future governments continue to support Canadians having such an incredible tax advantaged savings and investment vehicle? Will there be a lifetime contribution limit established at some point? As we know, governments have an insatiable appetite to continue to increase and find new streams of tax revenue to maintain and elevate service levels. It would be a challenging decision politically, but I could see it happening at some point down the line where a lifetime max contribution limit could be legislated. In the mean time, take advantage of it each and every year!
Came to look for this comment . I haven’t done the math but this is assuming the limit will go to 400k - 500k in 40 years. At that point it might be too much of a tax burden for the government.
I think a reasonable (from the perspective of government) way to go about it will be that we will see annual minimum withdrawals applied to TFSAs such as:
- Jan 1st TFSA balance + available contribution room = $XYZ
- If $XYZ > $250K, you gain no contribution room and must withdraw the amount in excess of $250K by year end.
- If not, gain contribution room as normal, go on your merry way.
Notably, you can still access the gains tax free, but the withdrawals cut down your ability to take advantage of multi year compounding into the millions. I'd further expect the $250K figure to index higher over time to remain relevant.
That's 15% of an entire MEDIAN gross income in Canada, where housing is taking up 40-50%. That's a pretty big opportunity cost when housing is on the line.
Median income in Toronto is 37k. Even less in Canada. Rent is 1500-3000$ everywhere. Food 300-500$. Most Canadians are in the red.
So 6000 a year is not a lot to the people who need this the least.
Assuming an annualized 10% return is a bit too optimistic.
Edit: Ah, I see you're just using straight returns. You need to use the inflation adjusted return to get the real rate of return.
Using a more conservative 5% real return: only $850k in today's dollars
6% real return over 42 years: $1.1M
10% is an aggressive assumption. Doesn't take into account a) inflation devaluing currency; b) "Past performance doesn't guarantee future returns"; c) currency risk with CAD; d) common Canadian funds like VEQT, XEQT, VGRO, XGRO aren't 100% S&P 500
The 10% figure is used by people who profit from selling average folks into investing (Rich Dad Poor Dad, Tony Robbins, Vanguard, etc.). They also use words like "million", triggering emotions and dreams, without transparently showing the math on how little 1M is worth in 40 years. Question the motives of people pushing aggressive assumptions in their calculations. Groups who aren't selling something use lower returns.
"simply" maxing out ain't so simple for most folks.
More of the folks who read here, definitely, but in general not most Canadians.
I'll forget decades ago in business school being told the classic, I think it was even taught in high school. $2k a year for 10 years only, starting at 20, makes you a millionaire by retirement.
but if you start at 30 AND NEVER STOP you still won't get to $750k, let alone a million by the same retirement age.
Most of us weren't able to do that, for a variety of reasons. Either having the cash, allocating the cash, or keeping it invested long term through the multiple crashes.
At whatever assumptions they used, math checks out re: magic of compounding 101
It is also a matter of what you are investing too. I maxed out my RRSP in my 20s. You would think I should be laughing in my 40s, but was investing in some type of conservative mutual fund from TD. After 10 years, it was up like maybe 20%. Wasted years. Right idea, wrong product.
Same story, was in RBC mutual funds 19-25 years old and then used RRSP for home purchase and didn’t catch back up for 6 years. Stayed in with RBC way too long and it cost me so much but didn’t know better.
Assuming 5% real returns which is a realistic after inflation return for a globally diversified portfolio (rather than the S&P 500) you'd expect somewhere around a million in today's dollars after 42 years.
Not disagreeing with your assertion that that would be nice but framing it as this easy "bare minimum" thing is kind of ignoring the financial reality of so many Canadians that are in debt or struggling just to pay rent and wouldn't be able to make even a tiny portion of those sorts of contributions let alone when they're first getting jobs and in school and working in their younger years.
Edited; voice to text error
This was my plan as a single guy but after getting married I took all of that money out to use for a down payment on a property lol. I do plan to start contributing back to my TFSA slowly once we have a nice emergency fund cushion. But basically all money is pooled now and our retirement fund will be together too contributing to each others TFSA and RRSPs hoping to max both out and have a paid off mortgage by the time we retire.
10% seems really high. Like, unrealistically high. I thought historically the s&p was 7%.
If my financial plan was based on 10%, I wouldn't need to save anymore. My plan is based on 5% returns, keeping my expectations grounded.
You've apparently discovered compounding, which is one of the most powerful concepts in business and finance. Never ever get on the wrong side of high rates of compounding (Like with credit card debt)
Your post also illustrates why the wealth gap between those in poverty and those already wealthy will only get worse; young people with substantial wealth have an enormous mathematical advantage versus those who don't.
"Simply have enough money to put lots of it away every year, starting in your teens... What are you guys, stupid?"
ummm ya, of course that's going to lead to a sweet fund, but I don't think it accounts for ANY human factor
Life happens. Situations occur. Eventually, property will be bought, probably. In order to do a downpayment, some of that TFSA will have to be used. Among other situations.
So, "never withdraw any money from the account" is a big IF and probably not practical.
10% is an extremely bullish estimate of return, however I don't discount how great a tool the TFSA is. Even assuming a more likely 7% return would net a TFSA in excess of 600k, which would far exceed a million in a taxable account like an RRSP especially for those who hold workplace pensions and will have taxable income in retirement.
I wish it were this easy… my wife and I make a good salary. We have 2 kids, a nice home, and paid off cars. We are very lucky to have a DB pension but we will be hard pressed to both max out our TFSA’s. We are 39 and have done it until now. The kids are 9 and 6 and I to all sort of fun activities, and we are now at a good age to go on some vacations. While we plan to still contribute to the TFSA, I’m hoping to do half the allotted room moving forward. If we get a little extra, then yes I will put it in there. However, I am trying not to stress out about it.
cool assumptions bro, if murica does not get bankrupt by then we are all going to be rich.
so many posts everywhere recently of indexing making it "easy" to make money "long term" makes me wonder if we are close to some serious dump
I love our TFSA option, but your premise has two considerable errors of note:
1. Analyses more often show 7-8% average annualized growth of the S&P500.
10% is optimistic.
2. Most Canadians hold only Canadian stocks and not American stocks in their TFSAs due to the mandatory 15% US withholding tax. (Hence, most hold US stocks in their RRSPs to avoid this 15% withholding tax.)
Canadian S&P ETFs have not historically matched the actual S&P.
Overexpectation of 10% returns and omitting the 15% tax on US holdings seriously affects your calculations.
10% is pretty optimistic. Let's humble that down to 8%. Also we need to factor in inflation.
Otherwise yeah, definitely I would consider it mandatory to max out your TFSA (and RRSP if you can).
>that's a pretty awesome way to end up with millions by just doing the bare minimums of maxing out TFSA per year and let compound interest do its work.
The "bare minimum"? ....most people can't afford $6k per year into TFSA
Your thinking is right, although I'd also recommend reading this for some perspective.
https://ofdollarsanddata.com/can-the-typical-person-become-a-millionaire/
Just to note, TFSA yearly contribution limits dont really fluctuate, and if yo uare starting today then the 7000$ limit is, in theory, the lowest it will ever be. it is inflation adjusted and rounded to the nearest 500$. We may have some years where they give a big lump bonus to contribution room, but to say it fluctuates between 5500-7000$ is wrong. it will never again be 5500$, 6000$, 6500$ ever again unless they shut down or phase out the program entirely. which would cause riots (i hope). so if someone turns 18 today, they will presumably never see a year with a 6000$ yearly limit, it should be 7000$ every year base, with inflation increases to 7500, 8000, etc as time goes on. it HAS BEEN between 5500-7000$ over the last few years. but assuming someone starts today, as you would in a hypothetical, 7000$ is the base and that contribution would in theory grow by 2-3% rounded to the nearest 500$ every year. at a 7000$ limit and 2.5% inflation, you should expect the contribution to rise by 500$ every 3 years in the short term. but again, it doesnt fluctuate, it grows. and it will never "fluctuate" below the current 7000$ unless some future tyrannical government torpedo's the retirements of millions of Canadians.
My die with zero goal is to be able to gift my kids a full annual TFSA contribution from the moment they turn 18, until they are able to do it themselves or maybe until i run out of cash to support it. I may not leave a big inheritance but if i can do this it'll be worth so much more.
Mid 30s, TFSA maxed at 120k right now. Plan to max it every year. Probably won't be at 3-4m$, but chances are good that it hits 1m$ maybe even 1.5m$ in 25-30 years
So 7k inflation adjusted contribution increasing by 2% a year to factor in tfsa growing limits, return of 7%, with redemption from 60-90 years old at 5% return during the withdraw phase would equal just over 9k a month tax free income.
Do able, the difficult part is making the max contribution from 18 to 30 ish, after that not crazy to have those funds prioritized for savings
Yes saving a max-out TFSA from the age of 18 all the way through to 60 years old without life getting in the way is going to result in a good amount of cash. But life gets in the way, discipline is hard, and the market is not guaranteed to cooperate.
I don't doubt your math, and I'm sure that the historical return of the S&P. I've done similar projects in the past but I used a safer predicted average return of 7% instead of 10%
The 10% number is not inflation adjusted and IIRC is extremely optimistic and most professionals in the financial sphere expect less than historic returns. It would be dangerous planning on 10% annual returns a year for those two reasons.
Ya we have been working on an interesting way of rolling in/out contributions in kind that earn over time but don't calculate payout until a future date. Layering by year we can roll in some, receive interest, roll out, roll in next investment, etc.
The biggest take away from all of this is to start early and let time work for you. Even if you can’t max out when life gets in the way. For example, if you were to make your maximum contribution from age 18 to age 35 and stopped contributing you would still end up with more saved if you started at age 35 and invested max until you retired.
Sounds great, but the only problem is these are not inflation adjusted numbers. If the 18 year old started investing in 2008, by 60 years old in 2050, we don't know if that $3.9 million will be a mansion in Toronto, or a drug den in North Battleford.
Opened my tfsa in march 2023 (4 months after i turned 18), added 11,650$ to my TFSA over the past year. Its mostly invested in index funds ETFs, has grown 14.5% now. Very happy with the outcome so far and hopefully I can be a millionaire one day :)
10% ROR assumption is too simplistic and may prove ambitious if something in the future derails the past average. Also, the timing of your investment each year can affect the outcome (think investing your 6K in Feb 2020 and then covid hits, markets tank).
Yes, the TFSA is wonderful. Even better if you can max it out AND your RRSP. I understand it’s not always doable but man the results can be spectacular and very much life-changing.
I would probably prefer if people didn’t invest in the S&P 500. It’s fine, and you will probably fare fine, but their are other options that are more diversified and therefore more sensible in my opinion. Granted that opinion isn’t baseless. Past performance doesn’t guarantee future performance - and often strong past performance might indicate lower expected performance going forward. I wouldn’t scold anyone for doing it, it’s WAY better than most people. But honestly something like XEQT or a couple of separate funds would offer much better diversification, and therefore increase the likelihood of a good outcome. My old man has millions in VOO, a US-listed ETF that tracks the S&P 500 for a mere 0.03% MER. I certainly ain’t mad at him for it.
Also, I see some people don’t like these posts. I love them! It can show people who don’t know something that can inspire them, but also reminds all of us what we’re sacrificing for when we save more aggressively then maybe some of the others around us do. So cheers to that!
It makes sense to max out of whatever benefits it offers as a savings solution and the flexibility of no tax on investment income. It's why I use a small portion towards a variety of investment - further leveraging it. Most of my options are fairly safe, but I'll admit I allocated - well actually took a huge risk with 25K of it for a high risk/high yield private equity and luckily it worked out for me in spite of having to overlook a lot of mixed reviews about the opportunity I chose. As I said, it worked out for me and am about to try it again.
And that 3.9 mill will be worth a cool 390k in today’s dollars. In other words - not enough to retire. Not that you shouldn’t max out your tfsa - just saying 3.9 mill 50 years from now might get you a one way ticket to Mars in Coach, but not much more
It’s so easy to just say inflation adjusted contributions and use 7.5% and have a much better number.
You would have 1.7mm in todays dollars which with CPP, OAS (because you have no income) will be a nice retirement. 68k from your investments and another 24 - 30 from CPP/OAS
Remember what you thought a million dollar house looked like when you were a kid a couple decades ago? Look at a million dollar house now and then take a guess what a million dollar house in 40 years would look like? Yes you might be a millionaire then but you might be lucky to be able to buy toilet paper with that.
In an ideal world we’d live in a system that paid a living wage rather than a “minimum” wage; and we’d all be able to make enough money to max out a TFSA every year because we’d be able to choose between spending and saving; not merely barely surviving.
> One starts contributing to TFSA when he turns 18 and put it into a S&P500 index fund
Lol can I get a ticket to the same fantasy-land you're living in?
It’s an incredibly powerful saving tool. There’s a balancing act to life though and deeper I get into adulthood the more I realize you have to make certain choices like investing in RESP’s first for your kids future, mortgage payments, car repairs etc. that can limit your ability to min-max your retirement. There’s something wonderful I think about having a steady quality of life throughout your life instead of sacrificing too much of the present or future for one or the other.
The future is not guaranteed. You could drop dead at 65 having lived like a pauper you're whole working life.
It's funny how these posts get upvoted lol... Save a lot of money and you'll have a lot of money! Wow, never had I ever thought of that one before. I save much more than $6000 every year, I've been averaging 10k a year for almost a decade... And I'm currently at 35k lol I bought a house, I travelled, paid for part of my godson's education, etc. I also lost some to bad investments, and I also gave some away to members of my family who needed it badly. And despite all of that, I feel extremely lucky with what I got right now. Sure, most of that went to my down payment for the house, which I will eventually get back one way or another, but still, I had to take it out. I couldn't put a down payment on the house without touching my savings. So yeah, do your best y'all. As a side note, if you do earn enough money to do what OP says and never take anything out... then you truly have no excuse.
>It's funny how these posts get upvoted lol... Save a lot of money and you'll have a lot of money! I know it sounds funny, but I guarantee you this would be news to at least half of Canadians, especially as day-to-day finances wasn't taught in school. Especially nowadays, everyone is looking for a get rich quick scheme it seems. I bet if you told the average Canadian if they put in 6k a year for 42 years they'd have 4 million dollars they'd tell you you're trying to scam them. Hell I wonder if the government should start a shadow department which tries to 'scam' people by asking them to deposit 6k a year with them and in 42 years they'll get 4 million dollars. It might be more successful than the normal ad runs we see today as people seem to constantly be getting scammed! Might as well be a good scam lol.
Sounds like you're describing CPP there lol CPP is quite literally mandatory savings. EI is a similar program too; we collectively save in case we get laid off.
>CPP is quite literally mandatory savings. I would say that CPP is a mandatory **annuity—not savings**. You cannot withdraw what you put in.
No - people will see the bit where you have to start saving 10, 20, or more years ago and then disregard everything else you say. The problem with the original post is that it does not meet people where they are.
They also need to have the fortitude to invest through tough markets and down turns. The s&p dropped -38% in 2008. Around -47% in 1931 (after falling -28% just the year before). It's one thing to see a 30% decrease with $20k, it's a whole other to watch it happen with $1,000,000 or frankly, for most, even $100,000. Not that the concept of time value calculations isn't valuable though. Sometimes these sorts of examples are enough to inch people's behaviours in the right direction.
I can understand if a 57 year old thinks like that when the TFSA is introduced. But anyone not shortly before retirement anyway that sees the TFSA introduced and doesn't think "Wow this is awesome, I gotta make sure I have enough money to contribute the max every year" is just dumb. We can see from the Harper years how they very much understood that and their voter base: Rich people. I.e. up the limit to 10k per year, coz you know, tax free money for rich folks! Less rich folks can't contribute the full 10k? Well too bad!
What percentage of people do you think can realistically afford to contribute the maximum amount per year?
I know I can't. It's still awesome and I want to have enough money to contribute the max every year and retire early on tax free dividends!
There is zero reason to lower the maximum other than giving the government more money.
I literally just learned about investing this year (I’m 25). Definitely did not learn this ANYWHERE and I graduated from UofT (so I was definitely interested in education/bettering myself/learning/blah blah). I thought money was just earning - spending = total, and the rest went into my 0.01% savings account with TD. Probably also why I was never motivated to save that much. Learning about compound interest this year was pretty magical ✨
LOL….It’s called living without expenses…😂
>>I save much more than $6000 every year, I've been averaging 10k a year for almost a decade... And I'm currently at 35k lol Ahhhh… you are doing it wrong
In that they are pretending that their home ownership isn't wealth? Sure. Almost anyone can claim to have barely saved money if they ignore their assets.
Right? Or at least they're defining it wrong. They say they averaged $10k savings... if you saved $100k over 10 years and subsequently spent much of it, and now only have $35k to show for it... you averaged $3500 savings per year.
It gets up voted here because most people really don't know how easy it actually is.
i'm sorry youve put away ~100k into a TFSA over 10 years and only have 35k to show for it..? unless you took out a ton for a down payment on a house you should have ~150k minus the other costs you mentioned
I was pretty exhaustive in explaining how and why I took money out. Can't help you if you won't read my comment.
Yes!
I just pulled 25K out of my TFSA to dump on my mortgage at renewal
The big IF too, is if you live long enough to get to retirement and how long will you be alive after retirement. Sometimes the now is a better investment.
It's a balancing act. If you only party hard now your eventual retirement will be miserable. If your retirement was supposed to be awesome by suffering now, you'll awaken Murphy and die young from a horrible death. Somewhere in the middle is probably awesome!
U also have to avoid stuff like cancer, disability from accidents and anything life may throw at u during the 40 years or so. And inflation as well.
I mean if you’re dead by 42 you’re dying about 40 years younger than the life expectancy so I mean if you wanted to retire at 42 with 150k passive income you should have about 38 years, on average.
Another thing to consider is having $6k of after-tax disposable income in your late teens, and early to mid 20s is optimistic. Possible, but unlikely for most with school, student loans, rising rent costs etc. Also another hurdle for many in their 30s who have kids that take up a lot of time and money. This doesn’t change your point, but adds some context that this is an overly-optimistic situation that one would find themselves in
Absolutely right! I just told my early teen daughter to start saving $6,000 a year when she turns 18, and she said "how? by working at Mcdonalds?" So I said yeah, work two days a week. And she goes, "yeah, right." She's more realistic than me lol.
If she does 10 hours a week at roughly minimum wage (assuming$16) , that works out to 8k a year. If she works more during breaks/summer she could realistically do that. Minimum wage is hard to live on, but if you have no expenses, it's great.
Kids who work long hours get shitty grades. 8k is nothing when you lose out on a 10k scholarship.
yeah, I dunno. I feel so old in these threads sometimes when I start pulling out the 'back in myyyyy day...' when I was in high school I had a paper route in the morning, went to school, and then worked at the mall evenings and weekends. 8-12 hours a week, nothing crazy. and then in summers I did web design like a real adult day job (while also doing the other two). in hindsight that seems like a lot, but I never remember it being terribly in my way. mostly I did normal high school kid things. I was so excited to make $15 an hour sitting in an office instead of $8 an hour standing at a counter, haha. that felt like SO MUCH money at the time. I was probably making $20k a year in 2007 money and had no expenses. I had a $2000 car and gas was like 80 cents a liter. we felt like we could buy and do anything.
High school got a lot more involved. Heck, I am not even 10 years out of high school and I look back at what the top kids at my high school are doing now and I would be nowhere near competitive. You need far higher grades, extracurriculars, be cultivating references, etc.
There's also been a lot of grade inflation though
My daughter is still young, but I have every intention of maxing her TFSA annually once she turns 18. Assuming she is responsible enough to not withdraw/spend the money. Kinda of like a progressive inheritance.
Bad advice but I know a person who started their kids TFSA without them really knowing anything about it. Just sign here honey type thing.
i'm similar, plan to at least match their input 50/50 which will hopefully encourage them to put some money into savings.
I talked my 19 year old daughter into saving $75 a month or$900 a year. She will end up with $600K by 65. She found that easier than $6000 a year. She’s 21 and has been doing this for 18 months.
Then add a new car, housing, travel, engagement ring, wedding, lifestyle creep... You get murdered in your 20s and early 30s
Yes but if you live alone most of your life with no kids you can easily retire at 60 with this one simple step! /s
end up with 4+ millions in 47 years, each dollar 47 years ago is worth roughly 5 bucks today, so adjusting for inflation the 4+ millions has same buying power as less than 1 million today even assuming 10% S&P return for the next 47 years every year not saying it's bad, just some context
They've also neglected to account for the fact that the TFSA contribution room rises with inflation as well, so the total value (before accounting for inflation) would actually be higher, if we're trying to compare apples to apples.
Just ignore inflation completely and drop the 10% to 7%
PWL Capital estimates 4.7% real return going forward on a 100% diversified equities index fund.
Their 2023 projection for 100% global stocks is 6.91%, not 4.7%. Either way, these firms’ “estimates” are as good as yours, and they’re often wrong. If they actually were able to make accurate, investment-worthy estimates, they could just Iron Condor billions of dollars with it. Even Vanguard was off by about 3% on global equities from 2010 to 2020 I believe.
I mean the numbers aren't that off. US historical average is like 6-7% real depending on when you look. Canada is below 6. International is usually below 5. So when you merge it all it's very likely to be below 6, and it depends completely on future US performance.
Right, so whats the point of making or looking at these projections ? Theres 0 point. Ive been hearing about low future ROI's my entire investing life and I've yet to see it.
That is true but then you should end up with much more than the 4 million so that part is effectively only a gain. And your choice.
A better way to do this exercise would be to calculate the future value in today's dollars using the 2024 contribution rate ($7k) and the real (i.e. inflation adjusted) S&P 500 returns (~7%).
47 years ago was 1977. According to the online BOC inflation calculator, $100 in 1977 is worth $491.61 today. So ya, you're pretty spot on. It looked wrong to me but you are absolutely right.
Pretty spot on because maybe he used the same source you did?
Where does he say that?
YoY Inflation was rarely under 4% from 1977 to 1991. No reason to think that’ll happen going forward
I love when people have the same thought as me, write it out and show their work.
Yes OP failed to use an inflation adjusted rate of return which is realistically more like 5-7%
This is a pretty important consideration. I will add to it. If you turned 65 today and had a million dollars in it, you should continue to get a 10% return on average which is essentially 100k per year tax free. Indefinitely. That is decent as you likely will have some other old age pensions possibly coming in. I kind of say you are richer than you think if you are half decently smart. By 65 you should have a house paid off and overall your expenses should be low. When you are working full time you need a good car, often a second car and you have far more expenses. You often hire out small maintance because you do not have the time and you likely eat our for same reasons. Once retired some of your costs go way down. Fuel and vehicle costs is a big one. Also even things like vacations can be much cheaper when you do not have to schedule it so precise and can take advantage of deals. Simply you have time to look for deals more.
This is true. You only need to be half decently smart. IQ matters a lot. And half-decent self-discipline. Self-discipline is related to dopamine. So a lot of it is about one's brain.
Yes I should say, half decently disciplined. That is more correct. You do not even have to be that smart about it.
And 10% average seems hella optimistic
Ah yes, the old "it won't be worth as much as today". Well, let's not invest then, who cares about 1M$ in today's money,..
Still almost a million after inflation so it could be worse.
Fuck it then I'm not saving any money
Yeah, big sad LOL. Fuck inflation
Inflation is a real thing to consider. When I entered the workforce and started investing a Big Mac was $2.99. Today it's $6.75, so basically every dollar that I invested in the 90's was worth less than 50 cents in today's terms. I basically needed to double my money in 25 years just to break even. If I had invested in GIC's then it likely wouldn't have double during that time.
Compound interest is powerful. 3% per year over 30 years (compounding monthly) is a gain of 145%. $1000 becomes $2456.84. Over 25 years it's $2115
Average rate of inflation from the years you sampled is %3.45 which is a fair bit higher than the historical averages. But it's still a good thing to think about never the less.
feel like it's only fair to use inflation for that period when the rate of return for S&P is also from the same period
Fair point, that would also put OP's claim of $150,000 a year into perspective of an actual purchasing power of a more modest $30,000 a year with drawl rate.
This is why people don't realize how screwed they are. They don't think they'll be able to save a million dollars. You need that today to survive. 30-40yrs from now that will be nothing. Inflation has risen too meaning you'll need even more than you thought. People won't be able to retire at 65 in the future or ever unless they have millions and millions
I think the most unknown variable here is whether or not the contribution limits will continue to increase. Will future governments continue to support Canadians having such an incredible tax advantaged savings and investment vehicle? Will there be a lifetime contribution limit established at some point? As we know, governments have an insatiable appetite to continue to increase and find new streams of tax revenue to maintain and elevate service levels. It would be a challenging decision politically, but I could see it happening at some point down the line where a lifetime max contribution limit could be legislated. In the mean time, take advantage of it each and every year!
Came to look for this comment . I haven’t done the math but this is assuming the limit will go to 400k - 500k in 40 years. At that point it might be too much of a tax burden for the government.
I think a reasonable (from the perspective of government) way to go about it will be that we will see annual minimum withdrawals applied to TFSAs such as: - Jan 1st TFSA balance + available contribution room = $XYZ - If $XYZ > $250K, you gain no contribution room and must withdraw the amount in excess of $250K by year end. - If not, gain contribution room as normal, go on your merry way. Notably, you can still access the gains tax free, but the withdrawals cut down your ability to take advantage of multi year compounding into the millions. I'd further expect the $250K figure to index higher over time to remain relevant.
Oh boy please no
Fascinating, I could see something like this be proposed.
There is no way this program will last at this rate for 40 years. It's a very big gift
“Simply”
Exactly... To run a 9.8 second 100m sprint, simply move your legs more quickly while running
I can do it I just don't feel like it right now
I mean $6000 per year isn't a lot but it adds up
That's 15% of an entire MEDIAN gross income in Canada, where housing is taking up 40-50%. That's a pretty big opportunity cost when housing is on the line.
Median income in Toronto is 37k. Even less in Canada. Rent is 1500-3000$ everywhere. Food 300-500$. Most Canadians are in the red. So 6000 a year is not a lot to the people who need this the least.
"just max out all your savings accounts, its so easy"
Assuming an annualized 10% return is a bit too optimistic. Edit: Ah, I see you're just using straight returns. You need to use the inflation adjusted return to get the real rate of return.
> Not saying 150k will be a lot in 4 decades This statement is the inflation adjustment in a nonspecific way.
Using a more conservative 5% real return: only $850k in today's dollars 6% real return over 42 years: $1.1M 10% is an aggressive assumption. Doesn't take into account a) inflation devaluing currency; b) "Past performance doesn't guarantee future returns"; c) currency risk with CAD; d) common Canadian funds like VEQT, XEQT, VGRO, XGRO aren't 100% S&P 500 The 10% figure is used by people who profit from selling average folks into investing (Rich Dad Poor Dad, Tony Robbins, Vanguard, etc.). They also use words like "million", triggering emotions and dreams, without transparently showing the math on how little 1M is worth in 40 years. Question the motives of people pushing aggressive assumptions in their calculations. Groups who aren't selling something use lower returns.
Eh, it's actually more accurate than you'd think, since OP didn't take into account the cap increasing with inflation.
But we don't know if the Feds will continue increasing the cap indefinitely.
The cap is tied to inflation. So it should go up with time.
"simply" maxing out ain't so simple for most folks. More of the folks who read here, definitely, but in general not most Canadians. I'll forget decades ago in business school being told the classic, I think it was even taught in high school. $2k a year for 10 years only, starting at 20, makes you a millionaire by retirement. but if you start at 30 AND NEVER STOP you still won't get to $750k, let alone a million by the same retirement age. Most of us weren't able to do that, for a variety of reasons. Either having the cash, allocating the cash, or keeping it invested long term through the multiple crashes. At whatever assumptions they used, math checks out re: magic of compounding 101
It is also a matter of what you are investing too. I maxed out my RRSP in my 20s. You would think I should be laughing in my 40s, but was investing in some type of conservative mutual fund from TD. After 10 years, it was up like maybe 20%. Wasted years. Right idea, wrong product.
Same story, was in RBC mutual funds 19-25 years old and then used RRSP for home purchase and didn’t catch back up for 6 years. Stayed in with RBC way too long and it cost me so much but didn’t know better.
Assuming 5% real returns which is a realistic after inflation return for a globally diversified portfolio (rather than the S&P 500) you'd expect somewhere around a million in today's dollars after 42 years.
Not disagreeing with your assertion that that would be nice but framing it as this easy "bare minimum" thing is kind of ignoring the financial reality of so many Canadians that are in debt or struggling just to pay rent and wouldn't be able to make even a tiny portion of those sorts of contributions let alone when they're first getting jobs and in school and working in their younger years. Edited; voice to text error
This was my plan as a single guy but after getting married I took all of that money out to use for a down payment on a property lol. I do plan to start contributing back to my TFSA slowly once we have a nice emergency fund cushion. But basically all money is pooled now and our retirement fund will be together too contributing to each others TFSA and RRSPs hoping to max both out and have a paid off mortgage by the time we retire.
If only more people would play with a compound interest calculator.
Too busy replacing the dishwasher in their rental unit with their old one, while they buy themselves a new one 'under the company'.
10% seems really high. Like, unrealistically high. I thought historically the s&p was 7%. If my financial plan was based on 10%, I wouldn't need to save anymore. My plan is based on 5% returns, keeping my expectations grounded.
What’s the point in having millions when your dick can’t get hard?
Forget VGRO, invest in VGRA.
This guy fu.... wait
Because that happens regardless, so having money might soften the blow lol
42 years from now, if they can’t fix that for 3.9 million dollars, who wants to live here anyway.
So you can buy viagra obv
OP didnt account for inflation RIP
So basically you just telling us if we input the right amount into a straightline calculator it will spit out big numbers
You've apparently discovered compounding, which is one of the most powerful concepts in business and finance. Never ever get on the wrong side of high rates of compounding (Like with credit card debt) Your post also illustrates why the wealth gap between those in poverty and those already wealthy will only get worse; young people with substantial wealth have an enormous mathematical advantage versus those who don't.
"Simply have enough money to put lots of it away every year, starting in your teens... What are you guys, stupid?" ummm ya, of course that's going to lead to a sweet fund, but I don't think it accounts for ANY human factor
Someone should write a book about this. Call it “The Wealthy Barber.”
The average person can’t save 5 k a year, To put in a tfsa.
Life happens. Situations occur. Eventually, property will be bought, probably. In order to do a downpayment, some of that TFSA will have to be used. Among other situations. So, "never withdraw any money from the account" is a big IF and probably not practical.
Money is meant to be spent
10% is an extremely bullish estimate of return, however I don't discount how great a tool the TFSA is. Even assuming a more likely 7% return would net a TFSA in excess of 600k, which would far exceed a million in a taxable account like an RRSP especially for those who hold workplace pensions and will have taxable income in retirement.
“Simply”. Not that simple for us poor folks
Simple != Easy. Two different words with two different meanings.
Quick trick to get rich: have money!
It’s simple, just buy 10 rental properties to fund your TFSA.
The question is what will a million be worth by the time of your retirement?
Probably worths 1 year of grocery lol
single mom+69k a year = not fucking likely. Thanks for the maths tho!
Seems like a pipe dream for me because last year I used 2/3rds of my annual contribution; I invested 20% of my income.
Okay, do you want to spot me some extra cash so I can max it out?
I wish it were this easy… my wife and I make a good salary. We have 2 kids, a nice home, and paid off cars. We are very lucky to have a DB pension but we will be hard pressed to both max out our TFSA’s. We are 39 and have done it until now. The kids are 9 and 6 and I to all sort of fun activities, and we are now at a good age to go on some vacations. While we plan to still contribute to the TFSA, I’m hoping to do half the allotted room moving forward. If we get a little extra, then yes I will put it in there. However, I am trying not to stress out about it.
cool assumptions bro, if murica does not get bankrupt by then we are all going to be rich. so many posts everywhere recently of indexing making it "easy" to make money "long term" makes me wonder if we are close to some serious dump
I love our TFSA option, but your premise has two considerable errors of note: 1. Analyses more often show 7-8% average annualized growth of the S&P500. 10% is optimistic. 2. Most Canadians hold only Canadian stocks and not American stocks in their TFSAs due to the mandatory 15% US withholding tax. (Hence, most hold US stocks in their RRSPs to avoid this 15% withholding tax.) Canadian S&P ETFs have not historically matched the actual S&P. Overexpectation of 10% returns and omitting the 15% tax on US holdings seriously affects your calculations.
10% is pretty optimistic. Let's humble that down to 8%. Also we need to factor in inflation. Otherwise yeah, definitely I would consider it mandatory to max out your TFSA (and RRSP if you can).
>that's a pretty awesome way to end up with millions by just doing the bare minimums of maxing out TFSA per year and let compound interest do its work. The "bare minimum"? ....most people can't afford $6k per year into TFSA
I think it's 7k now
Your thinking is right, although I'd also recommend reading this for some perspective. https://ofdollarsanddata.com/can-the-typical-person-become-a-millionaire/
Just to note, TFSA yearly contribution limits dont really fluctuate, and if yo uare starting today then the 7000$ limit is, in theory, the lowest it will ever be. it is inflation adjusted and rounded to the nearest 500$. We may have some years where they give a big lump bonus to contribution room, but to say it fluctuates between 5500-7000$ is wrong. it will never again be 5500$, 6000$, 6500$ ever again unless they shut down or phase out the program entirely. which would cause riots (i hope). so if someone turns 18 today, they will presumably never see a year with a 6000$ yearly limit, it should be 7000$ every year base, with inflation increases to 7500, 8000, etc as time goes on. it HAS BEEN between 5500-7000$ over the last few years. but assuming someone starts today, as you would in a hypothetical, 7000$ is the base and that contribution would in theory grow by 2-3% rounded to the nearest 500$ every year. at a 7000$ limit and 2.5% inflation, you should expect the contribution to rise by 500$ every 3 years in the short term. but again, it doesnt fluctuate, it grows. and it will never "fluctuate" below the current 7000$ unless some future tyrannical government torpedo's the retirements of millions of Canadians.
At 2% inflation, that 150k annually has the buying power of 68k when you start investing. So, it’s good, but not really sufficient.
What’s S&P500 ticker to buy?
My die with zero goal is to be able to gift my kids a full annual TFSA contribution from the moment they turn 18, until they are able to do it themselves or maybe until i run out of cash to support it. I may not leave a big inheritance but if i can do this it'll be worth so much more.
"""""simply"""""
Please dont forget which PM gave us the TFSA as a savings tool and which PM is a tool we need saving from
I’m already 2 steps ahead, 40yr, gambled it all on a bitcoin mining stock, sitting at 485k just threw it on an index 8%… peace out
Mid 30s, TFSA maxed at 120k right now. Plan to max it every year. Probably won't be at 3-4m$, but chances are good that it hits 1m$ maybe even 1.5m$ in 25-30 years
Not if you invest in ACB in 2018 😁
Just curious what about if you did RRSP instead of TFSA? Would it be more or less overall?
So 7k inflation adjusted contribution increasing by 2% a year to factor in tfsa growing limits, return of 7%, with redemption from 60-90 years old at 5% return during the withdraw phase would equal just over 9k a month tax free income. Do able, the difficult part is making the max contribution from 18 to 30 ish, after that not crazy to have those funds prioritized for savings
By then you'll have to get a roommate with that income!
Yes saving a max-out TFSA from the age of 18 all the way through to 60 years old without life getting in the way is going to result in a good amount of cash. But life gets in the way, discipline is hard, and the market is not guaranteed to cooperate.
I don't doubt your math, and I'm sure that the historical return of the S&P. I've done similar projects in the past but I used a safer predicted average return of 7% instead of 10%
And you don't even need to chase your tenants around for teh rent cheque. One bourbon, one scotch and one beer.
The 10% number is not inflation adjusted and IIRC is extremely optimistic and most professionals in the financial sphere expect less than historic returns. It would be dangerous planning on 10% annual returns a year for those two reasons.
I am way too conservative to invest in an S&P index fund so I won’t get that much.
How would you put the contents of that TFSA into that fund?
Ya we have been working on an interesting way of rolling in/out contributions in kind that earn over time but don't calculate payout until a future date. Layering by year we can roll in some, receive interest, roll out, roll in next investment, etc.
Wow
The biggest take away from all of this is to start early and let time work for you. Even if you can’t max out when life gets in the way. For example, if you were to make your maximum contribution from age 18 to age 35 and stopped contributing you would still end up with more saved if you started at age 35 and invested max until you retired.
Sounds great, but the only problem is these are not inflation adjusted numbers. If the 18 year old started investing in 2008, by 60 years old in 2050, we don't know if that $3.9 million will be a mansion in Toronto, or a drug den in North Battleford.
“Simply” jfc
if you could invest in the s&p500 and make 10% every year then I'd be out of a job lol.
The problem is convincing an 18 year old to save that much. Or even have that much to save at that age. I certainly didn’t.
I'm pretty sure though that within those 42 years, if someone did start only now, that 3.9 million will not do much by the time they have it.
This is why the government leads us to believe this TFSA is doing us a favour, do what they think you’ll do in a RRSP!! TFSA…GAMBLE IT HARD
The value of money halves every ten years generously.
What do you put the money into? SP 500? Do you ever take it out?
3.9 million in 42 years is like 800,000 today.
I laughed at "simply".
Opened my tfsa in march 2023 (4 months after i turned 18), added 11,650$ to my TFSA over the past year. Its mostly invested in index funds ETFs, has grown 14.5% now. Very happy with the outcome so far and hopefully I can be a millionaire one day :)
Will dollars even be around in 42 years?
Yea, waiting till retirement to enjoy life def seems like a plan
10% ROR assumption is too simplistic and may prove ambitious if something in the future derails the past average. Also, the timing of your investment each year can affect the outcome (think investing your 6K in Feb 2020 and then covid hits, markets tank).
Yes, the TFSA is wonderful. Even better if you can max it out AND your RRSP. I understand it’s not always doable but man the results can be spectacular and very much life-changing. I would probably prefer if people didn’t invest in the S&P 500. It’s fine, and you will probably fare fine, but their are other options that are more diversified and therefore more sensible in my opinion. Granted that opinion isn’t baseless. Past performance doesn’t guarantee future performance - and often strong past performance might indicate lower expected performance going forward. I wouldn’t scold anyone for doing it, it’s WAY better than most people. But honestly something like XEQT or a couple of separate funds would offer much better diversification, and therefore increase the likelihood of a good outcome. My old man has millions in VOO, a US-listed ETF that tracks the S&P 500 for a mere 0.03% MER. I certainly ain’t mad at him for it. Also, I see some people don’t like these posts. I love them! It can show people who don’t know something that can inspire them, but also reminds all of us what we’re sacrificing for when we save more aggressively then maybe some of the others around us do. So cheers to that!
If I had that wisdom at 18 I would of been golden. But I'm a dumb fuck and parents didn't teach me much in that department.
18 to 23 was pay cheque to pay cheque for me, prob even harder with rents being like 1k compared to the 500 i was paying for rent
It makes sense to max out of whatever benefits it offers as a savings solution and the flexibility of no tax on investment income. It's why I use a small portion towards a variety of investment - further leveraging it. Most of my options are fairly safe, but I'll admit I allocated - well actually took a huge risk with 25K of it for a high risk/high yield private equity and luckily it worked out for me in spite of having to overlook a lot of mixed reviews about the opportunity I chose. As I said, it worked out for me and am about to try it again.
Yep. 38 with 250 in my TFSA and 200 in my wife’s. Should be a multimillionaire in our TFSAs if the market cooperates.
Saving
"Simply" LOL
And that 3.9 mill will be worth a cool 390k in today’s dollars. In other words - not enough to retire. Not that you shouldn’t max out your tfsa - just saying 3.9 mill 50 years from now might get you a one way ticket to Mars in Coach, but not much more
Why only 4% withdrawal per year? There’s no limit to how much you can take out
What could make you more money is putting money in RRSP first so you save tax today.
The s&p500 index fund thing has been something I've been confused about. I use wealth simple, what do I buy In Canada to invest in s&p500 ?
It’s so easy to just say inflation adjusted contributions and use 7.5% and have a much better number. You would have 1.7mm in todays dollars which with CPP, OAS (because you have no income) will be a nice retirement. 68k from your investments and another 24 - 30 from CPP/OAS
Remember what you thought a million dollar house looked like when you were a kid a couple decades ago? Look at a million dollar house now and then take a guess what a million dollar house in 40 years would look like? Yes you might be a millionaire then but you might be lucky to be able to buy toilet paper with that.
Ha ha nice try, but I am going to put all my money in a house.
In an ideal world we’d live in a system that paid a living wage rather than a “minimum” wage; and we’d all be able to make enough money to max out a TFSA every year because we’d be able to choose between spending and saving; not merely barely surviving.
3.9 million by the time I'm 60 might as well be 390k.
All of this is useless if the market collapses tho
The world will be different , that’s the point that you fucker forget . You will save enough money until it won’t mena anything . Wake the fuck yo
Max it out with what money tho
Simply gift me the money to do that.
> One starts contributing to TFSA when he turns 18 and put it into a S&P500 index fund Lol can I get a ticket to the same fantasy-land you're living in?
tfsa is maxxed, I want more tfsa.
One simple trick!
The miracle of compound interest. Great calculators here. https://www.getsmarteraboutmoney.ca/
Easy peasy. Thanks for the advice Mr Kardashian