Recent Graduate... Want to follow a good path

[lifeliver]

Hello All,

2 Years have passed and it is time for an update on my financial situation.

I now have a much better Job with the same FI. It is a sales role where I am making 60 - 70k per year.

I no longer live at home but am now renting a place in midtown Toronto for $950 per month.

I have about 7k sitting in my bank account doing nothing and also close to 9k in my employee share purchase plan this is an RRSP.

At this point I have zero debt which is really great.

Although I have progressed in my life, I have not really made any steps in financial planning above and beyond the employee share purchase plan.

Can anyone recommend any good reads that can introduce me into the world of investing?

Thanks.

[ddkay]

Congrats on your raise. No more student loans? It should be easy from here. Write up a budget. I would budget more for housing, at least twice as much since $950/mo is far below average for a nice place in TO. If you aren't already, buy everything on CC so easy to track and see where your money is going. Do this for a year and then you can cut down the excess. Fill up your TFSA before your RRSP. RRSP is a curse if you retire with high income, you will get taxed like crazy at the highest marginal rate. Plus who knows if income tax will increase by then. If your plan is to be rich, it's better to pay taxes upfront now to soften the blow in the future.

[P_I]

At this point I have zero debt which is really great.

Although I have progressed in my life, I have not really made any steps in financial planning above and beyond the employee share purchase plan.

Can anyone recommend any good reads that can introduce me into the world of investing?

Well done getting the debt paid off. You might want to take a look at Eight with Weight: A Reading List for New Investors, which is a sticky on this forum and also Getting Started - finiki, the Canadian financial Wiki which offers some common sense introduction to investing.

[Feruk]

Sounds like you're doing pretty well. With $70K/year, you've got about $4K net take home monthly which is awesome. I'd try to put at least $1.5K into savings monthly. It might not seem like much, but over time it'll add up. Take some time and learn about investing rather than rushing in. I didn't do this and took some decent losses in my first few years of playing with stocks.

[cash]

I like the Canadian Couch Potato and the reading list he's made:

http://canadiancouchpotato.com/resources

[GOB]

Congrats on your raise. No more student loans? It should be easy from here. Write up a budget. I would budget more for housing, at least twice as much since $950/mo is far below average for a nice place in TO. If you aren't already, buy everything on CC so easy to track and see where your money is going. Do this for a year and then you can cut down the excess. Fill up your TFSA before your RRSP. RRSP is a curse if you retire with high income, you will get taxed like crazy at the highest marginal rate. Plus who knows if income tax will increase by then. If your plan is to be rich, it's better to pay taxes upfront now to soften the blow in the future.

Agree with everything except the bold. A balance must be struck between paying now and paying later, and it is dependent upon the amount of disposable/investible income you have. If paying all the tax now means you have very little to invest, you're missing out on the wonders of compound growth simply to avoid a tax bill in the future. If you have enough to invest, then by all means pay whatever else you can off as soon as possible.

It is also possible to contribute to RRSPs while deferring the tax benefit. This way you can get the growth of an RRSP and only take the tax break when you see fit (i.e. when you are in a high tax bracket). RRSPs do have advantages, especially in the case of US dividend stocks. TFSAs will charge a 15% withholding tax on US dividends - RRSPs will not.

[lifeliver]

50% of my income right now is commission so it is better to contribute to the RRSP as much as possible so that I can get a tax break now. I finally got around to opening up a TFSA and dumped all my access funds in there. I will try to fill it up to the limit within the next year. In the mean time I will start reading about investing so that I can put my money to work.

[Ethan]

I now have a much better Job with the same FI. It is a sales role where I am making 60 - 70k per year.

Can anyone recommend any good reads that can introduce me into the world of investing?

What do you sell for the FI? I find it odd for a bank salesman to be looking for an introduction to the world of investing.

[lifeliver]

What do you sell for the FI? I find it odd for a bank salesman to be looking for an introduction to the world of investing.

I am in Mortgage Sales.

[lifeliver]

A little update as of the end of November 2012

Age 26

Assets:
$9,500 in TFSA saving account (will go into some sort of index fund or EFTs once I read more)
$10,300 in RRSP employee share purchase Plan
$1,300 Bank Account
Liabilities:
$0 - No Debt

Net worth: $21,100

Income:
Approx $3000 - $4000 after tax, this fluctuates because of commision. For 2012 the gross is 63K before year end Bonus (expecting about 5k but not 100% sure).

Expenses:
$950 Rent (I live with a girlfriend who has finished school and is starting to work finally so this will be cut down to $475 each)
$150 Motorcycle insurance (Planning to sell the bike this summer as I don’t use it enough)
$200 Groceries (the other $200 comes from gf)
$60 Cell Phone
$50 Internet
$40 Gym
$80 Dog expenses
$120 in Bus tokens (only in the winter as I ride the bike from March - November).
The rest of the expenses are not fixed so I dont know exactly.
Total: $1650

Cash Flow:
$1750 - $2500 Approx as Income fluctuates.

Goals: I would like a personal net worth of $100,000 by 30. Continue renting as there is no reason to purchase property in the GTA. Learn as much as possible about investing. Maybe invest in a rental property outside of the GTA.

Feedback is welcome...