# How do you all do it?



## KaeJS (Sep 28, 2010)

I'm currently working my *** off pretty much all day everyday to make $7,000 net per month. But it's just not enough.

By the time I pay my bills (mortgage, insurances, gas, utilities, etc..) I am left with only $3,000. I have some debt from a business venture that flopped and I currently owe about $30,000. So, it will take me until next year to pay it off. I'm fairly frugal, or at least I like to think so. I spend $500/month on entertainment and food combined.

I guess my question is... Am I doing OK?

I'm 29.5 years old.
House is worth $400k. I have about 70% equity.
No other debt except for that $30,000.
I have savings/investments of about $25,000.

My net worth is about 250k (not including vehicles or items, purely house and debts/savings) but it's just not enough. 

I have been using online calculators and have determined that if I want to retire at age 55 with a million dollar portfolio, I will have to sock away $1250/month. That's a pretty high amount to be saving each and every month...

I've opened a WealthTrade (WealthSimple) account and will be proceeding to contribute the $1250/month as soon as I hit 30.

But I can't keep working all day everyday. What is the point in having so much money when all I do is work?

How do you all have so much and still have freedom or time to do what you want to do? I feel as if I am wasting my younger years working too hard.

I know this is a finance forum, and I would like to treat it as such. Not looking for sympathy and do not want it. I want to know how other people have found success and how maybe I can alter my current lifestyle to be more efficient.


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## AltaRed (Jun 8, 2009)

Perhaps define 'all day every day' for us. I know the last 20 years has gotten worse for some in terms of 'availability' due to cell phones and internet so time away from the office is not necessarily 'shut off' time. But 40 hour work weeks are common, along with some extra hours now and then.


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## agent99 (Sep 11, 2013)

If you earn money doing something that you like doing, then it is not work. 
I don't recall saving much at all at 29 yrs of age. That came later, especially after we were mortgage free. 
Never had other debts. Ok, one for my first car - Cost me about $500 back then  
Always paid off CCs monthly. 
Forget about saving until you get your debt paid off. Mortgage OK and it will be easier to handle as time goes by. 
Hang in there!


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## jargey3000 (Jan 25, 2011)

.....ohhhh....to be 29.5 years old again! ....workin' my *** off! (at a job I hated, BTW).....lucky you...


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## m3s (Apr 3, 2010)

KaeJS said:


> Not looking for sympathy and do not want it. I want to know how other people have found success and how maybe I can alter my current lifestyle to be more efficient.


I wasn't that far off at that age and net worth multiplied in my 30s. I think many build this kind of foundation in their 30s and then net worth multiplies in their 40s. You're ahead of the curve imo

As far as being more efficient have you considered relocating to a lower cost of living area? If you have some good work experience it seems like savings potential is higher outside of the major cities



KaeJS said:


> I'm currently working my *** off pretty much all day everyday to make $7,000 net per month. But it's just not enough.


It's a lifestyle choice more than anything but I seem to hear people often working their *** off just to pay the bills in the major cities like this.

Say somewhere else you might net 80% of the income but the bills drop 50% - saving rate increases and work/life balance improves drastically imo


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## AltaRed (Jun 8, 2009)

I agree few have much net worth in their 20s and it only begins to build in their 30s (usually equity in a home). Net worth really can take off in one's 40s if one doesn't blow all their earnings in keeping up with the Jones. Other than an employer sponsored savings plan, DB pension plan contributions, and an emergency fund, I had no investment accounts until I was 40 and the mortgage was paid off. 

Net worth growth really can build quickly when there are no debts and in peak earning years. Almost my entire investment portfolio was built in about 17 years, age 40 to 57 when I retired.

Be patient, enjoy life as you go, and it will come together if you stick with the plan.


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## peterk (May 16, 2010)

Isn't this the same conversation we've been having for nearly 10 years now KaeJS?

What savings amount or working amount _would_ satisfy you? You already save 40% of your take home, and have $1/4M before 30 - That's not bad. Is it mostly the fact that you work too much to get ahead? Would you expect to be able to work just a normal amount, or even less, and still "get ahead" of others? Why?

Sure, old generations perhaps had it easier than you, ("How do you all do it"?), and perhaps had greater success in being able to live life normally compared to us, and no that's not fair and a point for resentment... but it is what it is, man. You have a job, some money, you are moving along forwards at least, not backwards.

These days I'm a bit older,and am responsible for hiring students, going to recruitment events for my department. Let me tell you, you have it WAY better than these zoomer kids. They are mega, mega screwed. They will be doing your job soon for 2/3 the pay and paying 2/3 more for their living expenses, and have to have their **** together wayyy more than we did 10 years ago in school to even stand a chance...

So be thankful, at least, that you're 29 instead 19, and have 10 fewer years of employment hell ahead of you, and get paid a bit higher and treated a bit better.


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## Just a Guy (Mar 27, 2012)

I’d say your priorities are a little screwed up. You make 7k a month, but are worried about 30k of debt. You’re under 30 and have 70% equity in a 400k house. 

You’re so afraid of debt, you’re forgetting to live life. 

If you learn how to use debt to make money, and stop fearing it, you can actually enjoy life and work a lot less. I’ve got huge debt, but a low debt ratio. My debts are all self paying. My visa bill each month is always at least 5 figures, but is always paid off. I’m not afraid of big numbers. I am afraid of fiscal irresponsibility.


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## james4beach (Nov 15, 2012)

KaeJS, you make a lot of money. Your net take home is about the average of mine over the last decade.

Personally, I've prioritized keeping my spending level low. I don't see "investment" as a way to get rich; it's just a way to accumulate capital and preserve purchasing power. Sure it would be great to get a few percent positive real return, but it's not what I expect from investing. I expect to preserve value vs inflation.

I've kept spending low, to be able to keep accumulating capital. In my mid/late 30s now, this has really started adding up. In my view the key to this has been:

1) disciplined spending patterns (I'm not really that frugal)
2) disciplined, steady investment to preserve purchasing power
3) pure dumb luck and no health problems, which I'm very thankful for

I'm currently living on about 40K of expenses per year and will probably get it down to 38K. For example with your 84K take home, that would leave 46K of new savings (capital accumulation) a year. That's easily over 500K net worth accumulation even with conservative investments over a decade.

That pace of capital accumulation is more or less what I achieved. _With similar income to yours_, I've now worked about 15 years... it adds up.

As for the question, how do I do it? I like to take time off from work to make sure I don't get exhausted. I take breaks in between jobs and enjoy my free time. I relax and enjoy unstructured time.

IMO this is a marathon, not a sprint.


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## andrewf (Mar 1, 2010)

peterk said:


> Isn't this the same conversation we've been having for nearly 10 years now KaeJS?
> 
> What savings amount or working amount _would_ satisfy you? You already save 40% of your take home, and have $1/4M before 30 - That's not bad. Is it mostly the fact that you work too much to get ahead? Would you expect to be able to work just a normal amount, or even less, and still "get ahead" of others? Why?
> 
> ...


I am also hiring entry level university grads. We are starting them at the same pay I was getting 10 years ago. It blows me away.

I'm in my early thirties and it has only been recently that I have gotten significant pay increases, stock options, etc. I bought a house fairly late, but that was somewhat borne out of financial insecurity --or lack of comfort with taking a big mortgage on my income in a frothy housing market. In hindsight, I should have leveraged myself to the hilt and hit up bank of mom and dad to buy a house when I first graduated. However, I feel like I have reached a point in my career where I don't expect much more promotion and I'm not sure I want it (from the perspective of having to deal with more political nonsense and maneuvering). I'm more inclined to develop side-hustles to augment my earning potential and perhaps leave the 9-5 if very successful.

Kae, I don't know if you want to talk about your line of work. I think you indicated previously you were in MF sales. I don't know what the career progression looks like for you, or is it just a matter of more hours for more dollars.


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## agent99 (Sep 11, 2013)

peterk said:


> Isn't this the same conversation we've been having for nearly 10 years now KaeJS?


Oops - I went back and see you are right.


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## cainvest (May 1, 2013)

KaeJS said:


> I want to know how other people have found success and how maybe I can alter my current lifestyle to be more efficient.


Only you can truely assess your current situation. The balance between work, play and saving is something everyone juggles and you need to find your balance point. Maybe $1M at 55 is too much "back loading your life" for you ... $1M at 60 still ok? Maybe $750k at 55?


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## doctrine (Sep 30, 2011)

$250k net worth and likely $120k+ of gross income per year before age 30? Doing well, I'd say. You can easily hit your goal if you want. 

Probably the risk to not meeting your goal is more real-life related. Divorce, or doing something risky with your money (large leveraged business or investment going to zero, not unheard of, or selling in a market crash). At a certain time, you are going to make more money by investing in your spousal relationship than your stock portfolio.

The best part about working hard earlier and building capital is you don't have to work as hard later to catch up. Once you hit $500k of capital, in most years you are probably going to find you make far more in investing than in saving. Anyone with $500k invested at the beginning of the year, even if evenly split between S&P 500 and TSX, is now up to $600k or more. Although those are higher than average returns, once you are at this level even average market returns make a huge difference.


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## Eder (Feb 16, 2011)

Kae...when I was your age I had 4 kids and a 18% mortgage....worked 6 days a week/10 hours per day. I had nothing in the bank other than a home equity line of credit. Maxed the line of credit to buy into an opportunity...don't despair.


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## Topo (Aug 31, 2019)

KaeJS said:


> I'm currently working my *** off pretty much all day everyday to make $7,000 net per month. But it's just not enough.
> 
> By the time I pay my bills (mortgage, insurances, gas, utilities, etc..) I am left with only $3,000. I have some debt from a business venture that flopped and I currently owe about $30,000. So, it will take me until next year to pay it off. I'm fairly frugal, or at least I like to think so. I spend $500/month on entertainment and food combined.
> 
> ...


I'll just emphasize a few points:

1. There is no easy way to riches. For most people it is the result of hard work and savvy savings. I would recommend reading "The Millionaire Next Door." 

2. With the income you have, you should be able to easily stash away at least 20% of your income into investment/retirement accounts. First, however, it makes sense to pay down your debt.

3. You may have some leakage in your expenses that you can patch. Generally, there are two categories: One category is large items such as mortgage, car payments, club memberships, etc. The second group are smaller things, commonly know as the "latte factor." I believe the first group are more important, but some emphasize the second group.

If you spend less and save more, you will have the opportunity to work less or under better conditions.

An article in MarketWatch about cars as they pertain to financial success or failure:

https://www.marketwatch.com/story/t...e-drive-a-crappy-car-2019-06-21?mod=home-page


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## AltaRed (Jun 8, 2009)

Eder said:


> Kae...when I was your age I had 4 kids and a 18% mortgage....worked 6 days a week/10 hours per day. I had nothing in the bank other than a home equity line of credit. Maxed the line of credit to buy into an opportunity...don't despair.


I remember similar circumstances. 2 pre-school kids, lived in a duplex and was just paying off the end of the second mortgage and had just a few years previous, paid off the last of the student loans. The first mortgage was about 10% and the second mortgage exceeded 12% I think. Everything we had we put to paying off debt. The OP and many others here are in actually rather good places at equivalent ages.


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## cainvest (May 1, 2013)

Topo said:


> An article in MarketWatch about cars as they pertain to financial success or failure:
> 
> https://www.marketwatch.com/story/t...e-drive-a-crappy-car-2019-06-21?mod=home-page


Ouch, that's a terrible article on car ownership/costs.


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## Topo (Aug 31, 2019)

cainvest said:


> Ouch, that's a terrible article on car ownership/costs.


It is certainly not a classic and there are more thorough articles and discussions on this matter, but it stresses the general point of not overspending on depreciating assets. 

I personally don't believe in buying clunkers and have bought new in recent years but try to extract good value out of it.


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## AltaRed (Jun 8, 2009)

To the OP: I think you will feel a lot better when that $30k loan is discharged. That has to be a heavy dark cloud that can weigh on one's psyche. Those funds can then be turned loose on some more productive.


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## agent99 (Sep 11, 2013)

cainvest said:


> Ouch, that's a terrible article on car ownership/costs.


Shouldn't bother most CMFers:


> You should have $1 million before you buy a new Beamer or a Benz.


Whatever you buy, look after it. Good cars will last for 20+ years if well maintained. The one we will be using for a longish trip today is a 98 model.


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## fstamand (Mar 24, 2015)

Maybe try something on the side. Keep it legal 
I did a lot of buy/sell at your age


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## AltaRed (Jun 8, 2009)

Think the OP needs to stay away from 'business ventures' for awhile, at least until the debt of the last one is paid off... or pick something that has very little capital required.


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## nobleea (Oct 11, 2013)

As others have said, I'm not sure what the big deal is.
You're under 30 and have 250K in net worth.
I've been tracking my NW, meticulously and with the same methodology since I was 28.
When I was your age, my NW was $160K.
I'm 41.5 now and it's over 1M.

I will say that the biggest growth vector to the NW, in my case, was getting married. She didn't have any money or inheritance, but she has a good career, great friends and family and a good mindset for wealth growth. HAving a second income is huge and cannot be understated. When I was in my late 20's that was honestly my main goal - to find a great partner.

And conversely, getting divorced is a sure fire way to lose it all.


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## Longtimeago (Aug 8, 2018)

Well at 30 I had basically nothing in financial terms and retired at 43. So age, how hard you are working and where you are today, has nothing to do with it in my view. The answer to your question, 'how do you all do it' in fact differs by individual, there is no 'all' answer.

I believe that everyone has until around age 35 to do as they wish as long as they are more or less on a path that has potential. In my case that was industrial sales. Up until I was 35, like many people, I spent as much as I earned, I paid off car loans, rented an apartment and just generally blew the rest of my money. A typical kinda guy earning only a bit more than the average income. I had nothing in the way of debt fortunately but even less in the way of savings and yet I managed to retire as I said, at age 43.

I had my 'eureka moment' one day when 35. I realized that I did not want to work till age 65, get a pension, retire and drop dead on the golf course at age 67. So I decided to retire as soon as possible and move on to enjoying life all day, every day. But unlike most who decide to retire early, I did not start out by deciding how much capital (your $1 mil) I would need to have. I started by deciding WHEN I would retire and my answer to that was in 10 years.

When you change the initial premise of any equation, it changes all subsequent decisions you have to make in getting to your goal. For example, if you start saying, 'I will retire when I have $1 million, you have no time limit in that goal and so you look at here's what I earn today and here are my expenses and what I can save towards my goal, so I will get there in X years allowing for average annual increases in income etc. If you set the time limit first, that answer will not work.

Having set that time limit, my next step was to determine how much INCOME I would need, not how much capital. That then lead me to thinking about inflation. The amount of income you would need to retire this year will not be enough next year. Your income will have to increase by at least as much as inflation to continue to have enough income to not need to work obviously. So whatever I was going to do for income would have to at least provide that much increase every year. THAT affects any decision you will make as to how to invest your capital as you accumulate it. 

Trying to determine how much income I would need also meant that I had to think about 'needs vs. wants'. If I wanted a new car every few years then obviously I would need more income than if I were happy driving a used car longer. Most people in my view have trouble determining what their needs really are and what are really just wants. Realizing what your needs really are vs. just wants, can have a huge impact on how much income you need to have and of course how much capital you will need to provide it.

I also realized because of my 10 year time limit, that even if I limited the amount of income I would need to real needs vs. wants, I probably couldn't accumulate enough capital to generate that income just doing what I was doing, saving what I could, spending as I was spending and investing in the most 'traditional ways.' So I needed to change some things.

First was doing what I was doing. I was a decent salesperson and managed to sell as much as anyone else without breaking a sweat so to speak. I probably actually worked about 20-25 hours a week even if I 'appeared' to be putting in 40+ hours a week. Long lunches, an afternoon playing hooky from the job, etc. So I decided to put the nose to the grindstone and actually work 40 hours, sell more than anyone else, get promotions and earn more. That would give me more per year to invest. I didn't work any 'harder' than before, I just worked a few more hours per week and 'played the game' to get promotions.

Next was getting hold of my spending. Now I am not talking about doing without. I still took 3 vacations per year of a week or two each and I still went out on a Friday night (I was in my 30s after all) with friends, etc. But instead of that latest and greatest whatever, I was CONTENT with keeping what I had. I found that I was 'content' because I no longer saw it as doing without, I saw it as contributing to my bigger goal, financial independence. Often people buy 'stuff' because they are NOT content with their life and where it is going. I found I could spend about half of what I had been spending and still be happy because my outlook had changed. And my spending did NOT increase as my income increased. Most people spend more when they earn more, it never ends. 

So I started to have some savings to invest. When I looked at what to do in that regard, again, I could see that I wouldn't meet my 10 year goal if I invested in traditional ways. An investment that pays 10% will require half the capital invested to achieve the same income as an investment that pays 5%. To reach my 10 year goal, I would need investments that paid well, given the amount of capital I could expect to have by the end of the 10 years. Income is what matters, not how much capital you have. The traditional 'portfolio' of stocks, bonds, gic ladders, etc. were never going to get me there.

The goal you start out with as I said, changes ALL subsequent thinking and decisions you make. In fact, I achieved my goal of financial independence in 7 years, not 10. I 'retired' with enough income to live on for the next year and haven't had to go back to work for 30 years now. All I have had to do is keep making sure I earn more than I spend, cover inflation.

In fact, I ended up adopting a 'Rule of 3s' for my income. I try to maintain my spending on real expenses at around 1/3 of income, have 1/3 for discretionary spending and 1/3 for savings. That means that if I have a bad year in terms of income for some reason, I have a 2/3 cushion to fall back on, I am not going to starve or have to sleep on a park bench. When I have a good year in terms of generating income, I can splurge on something or just add it to savings/investing. My net worth today far exceeds what it was when I first retired. 

So to answer your other question, 'am I doing OK', I would say, sure, you're doing fine. All you need is a plan. With your current income you could probably quite easily learn to save $1250 per month and have your $1 mil at age 55. As for the working 'all day every day', I don't know what you do but whatever it is, I would say there is a good chance you need to learn to work 'smarter not harder' as they say although I realize that can be easy to say and hard for some people to do. I never really compromised my work/life balance when following my plan to financial independence.

But given your current financial circumstances and potential, I would in fact question your goal. Why wait till 55 to retire? There are plenty of people who have retired at an earlier age than that and I would even venture to say that some of them did not start from as good a financial position as you are in. I'd say that you are aiming too low.


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## Longtimeago (Aug 8, 2018)

nobleea said:


> As others have said, I'm not sure what the big deal is.
> You're under 30 and have 250K in net worth.
> I've been tracking my NW, meticulously and with the same methodology since I was 28.
> When I was your age, my NW was $160K.
> ...


See again, conventional thinking and as such not wrong nobleea but not always the case.

When I was working on financial independence, my wife was an active participant in that plan. When we reached the goal however she got what could be called, 'onemoreyearitis'. In working towards the goal, she had increased her income as I had, got promotions and was then unable to 'give it up'. I waited a year for her to agree to quit and when she couldn't our marriage ended. She went her way and I went mine but I did NOT have to lose my financial indendence as a result. My finances were sufficient to allow me to continue being 'retired' as her were also if she had chosen to quit. In other words we had enough for 2 between us or enough for 1 each.

Getting divorced doesn't mean you get taken to the cleaners and lose everything necessarily. There are plenty of more or less amicable separations and divorces that happen as ours did. The only thing we argue over was a painting we both wanted to have. I let her win, 'happy wife, happy divorce.'

I will agree with you though that having a partner on the path is a good thing. Sharing is better in most things including working to reach a goal.


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## Mechanic (Oct 29, 2013)

At 30, all I could think about was how much overtime etc I could get to help pay bills. Wife, 2 kids and a mortgage. Net worth didn't really start to build till in my 40's and even then I was head down, butt up, working at building my small business. My wife did work too, which helped enormously. You have to try and limit the mistakes too, so as to limit high interest debt (says the guy who had a 21.75% mortgage in '82) I think you are on the right track with a 250k NW by 30.


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## KaeJS (Sep 28, 2010)

Wow...

I didn't expect this many replies and so soon. It's great to see this forum is still very active and even better to see some familiar faces.

I'll try to respond to all points but it might be haphazard as I only have a few minutes here and there usually. The reason for this, which might clear up some questions, is that my main full time job sucks. I only make about 55k/year so I need to supplement with outside gigs. This is why I work about 100 hours a week. $55k/year just doesn't cut it.


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## KaeJS (Sep 28, 2010)

Regarding my 30k debt, it is at 5.5% which is not overly high. I have not maxed out my TFSA so I am kind of doing a split between paying down the debt (it's on a PLOC) and buying up companies in my TFSA.

I'm largely buying things like NVU.UN, SRU.UN, REI.UN, T, RCI.B, BCE, CU, FTS, PZA.TO, SU, CNQ, ZPR, etc... There are more but just some examples.

Good quality names that pay dividends.
It makes me feel better to split some into the TFSA and some onto the PLOC. I know investing is not guaranteed and the 5.5% on my PLOC is, but I feel like I've been in the investing game long enough to not mess it up (and my TFSA is currently up more than 5.5% YTD).

My mortgage is also at 2.49% fixed until 2022, so it makes no sense to pay that down any more than the base payment.


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## KaeJS (Sep 28, 2010)

m3s said:


> I wasn't that far off at that age and net worth multiplied in my 30s. I think many build this kind of foundation in their 30s and then net worth multiplies in their 40s. You're ahead of the curve imo
> 
> As far as being more efficient have you considered relocating to a lower cost of living area? If you have some good work experience it seems like savings potential is higher outside of the major cities
> 
> ...


I see what you're saying, and everything you are saying is correct. I live 1 hour from Toronto and house prices keep increasing. But this is exactly why I don't want to move. With our (bite my tongue) Liberal government, these house prices are never going down. Rates are too low, immigration is too high, borrowing rules are too relaxed.

I remember people telling me a couple years ago to sell... And it's just not worth it. It's parabolic. It's insanity. But it's reality.


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## KaeJS (Sep 28, 2010)

peterk said:


> Isn't this the same conversation we've been having for nearly 10 years now KaeJS?
> 
> What savings amount or working amount _would_ satisfy you? You already save 40% of your take home, and have $1/4M before 30 - That's not bad. Is it mostly the fact that you work too much to get ahead? Would you expect to be able to work just a normal amount, or even less, and still "get ahead" of others? Why?
> 
> ...


Yes, this is the same 10 year old conversation. I guess some things don't change. :tongue:

I'm not sure what amount would satisfy me. I just need enough to have what I want. I would probably need close to a million, maybe 900k, and then also need about 70,000/year on top of that to have what I truly wanted.

The newer generations are definitely in deep trouble. My generation is, too. The people I work with got paid $10k/year more than I do now 30 years ago...

It's quite sad, actually.
Sad that our country has gone this way.
It's frustrating to work just as hard and receive less while the price of everything has gone up. But what can any of us do?

Also, I don't expect to work less and get ahead. But I'm seriously starting to wonder if the only successful people (other than the super busy savvy ones) are the people who were born into it. I feel like it is extremely difficult and almost impossible to get ahead just by working hard and without the help of mommy and daddy.


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## kcowan (Jul 1, 2010)

KaeJS
I think you need to keep going on your approach. Our experience was in a different era. Even my sons who are late 40s had a different experience than either me or you. You need to listen to it all with a grain of salt and continue to follow your own course.


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## peterk (May 16, 2010)

KaeJS said:


> Yes, this is the same 10 year old conversation. I guess some things don't change. :tongue:
> 
> I'm not sure what amount would satisfy me. *I just need enough to have what I want.* I would probably need close to a million, maybe 900k, and then also need about 70,000/year on top of that to have what I truly wanted.
> 
> ...


I think you need to look deep into yourself and decide what it is you need to do with your life that will make you feel like an adequate man who's accomplished something, without the thoughts of money popping up.

It seems like you really want to be better off than "middle class", which, by definition, is a minority group and fairly rare. Maybe you'll achieve that, and even deserve that... but maybe you won't. Maybe you'll falter and have even less than what you're currently envisioning... Regardless, you need to have a potential path and purpose in life that can be pursued whichever financial fortune, good or bad, happens to befall you.

Here's a pretty good one about getting through pointless, meaningless hard work, which by all rights you shouldn't have to endure, and not letting it bring you down:


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## AltaRed (Jun 8, 2009)

KaeJS said:


> I'm not sure what amount would satisfy me. I just need enough to have what I want. I would probably need close to a million, maybe 900k, and then also need about 70,000/year on top of that to have what I truly wanted.
> 
> <snip>
> 
> Also, I don't expect to work less and get ahead. But I'm seriously starting to wonder if the only successful people (other than the super busy savvy ones) are the people who were born into it. I feel like it is extremely difficult and almost impossible to get ahead just by working hard and without the help of mommy and daddy.


Maybe you are looking too far ahead and setting arbitrary goals. At age 30, it is virtually impossible to know how the next 20+ years will unfold for you, never mind how the economy or general standard of living will unfold.

Maybe aspire more to a priority of enjoying life as you go, striving to put away 10% of your net into investments. Whatever is left in your pocket each month is what you prioritize on your spending list.

Long term investing could take care of itself, what with investment returns and consistent contributions over the next 20 years. You can't possibly know that $70k/year is what you will be satisfied with. Few of us have everything we want. There are compromises along the way. I doubt very much that a lot of successful people are simply born into it. I don't know anyone personally of that group, nor am I aware of anyone who got a mega-launch due to the bank of mom and dad. I do know people who in their 50s and 60s inherited some money allowing them to retire in a better fashion than they otherwise would. 

I think your views may be skewed by pre-selecting those who have it better, or are perceived to have it better, than yourself. Stop looking at those people and look for others around you who are on a similar ship to yours. I never once looked with envy or jealousy to the 'rich' crowd. Couldn't play in that crowd nor did I want too. There is nothing joyous about fancy cars or big houses. Everyone gets up in the morning and takes a crap the same way.


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## james4beach (Nov 15, 2012)

KaeJS said:


> It's quite sad, actually.
> Sad that our country has gone this way.
> It's frustrating to work just as hard and receive less while the price of everything has gone up. But what can any of us do?


I have no idea how to compare to past generations. I'm about 10 years older than you.

I boosted my income by being very open minded about where to live and work, and I searched for opportunities everywhere. I made two very large moves in pursuit of work. First from western Canada to Toronto, then from Toronto to the US west coast. And I knew many others (friends of mine in Toronto) who did exactly the same thing, obviously for the same reasons because we couldn't find jobs in Toronto.

All of this came at tremendous cost as well. Loss of relationship stability, difficulty keeping circles of friends, adapting to new places, no permanent home. In fact in both big moves, relationships (girlfriends) didn't work out for various reasons, they couldn't move or didn't want to, and that was the end of the girlfriends.

With all this moving, I was also farther from family and had to spend more effort flying around to check up on my mom & dad. Much of my vacation time over the last 5 years has gone to flying to see family. Hardly a vacation, hardly leisure.

It's what I had to do to have the higher income. I'm just writing this so you don't think I just sat in my home town and -- poof -- here comes a high income for me... absolutely not the case.

IF instead I wanted to stay in one city, live in a house I bought, and stayed with my girlfriend at the time, I would likely have had lower incomes or much more difficulty with my career. This isn't to say one way or the other is the right thing to do, but there are tradeoffs.

It's good to think about those tradeoffs. For example, you have a house. I could not have a house (not with all my moving for work). I could not be close to my friends and family members for many years. It took me a full day of travel to even go visit my parents. Left my apartment at 9 am, arrived at my parent's house at _midnight_.

Several people in my home town seem jealous of my income level or job, but at the same time, are unwilling to move and unwilling to have these inconveniences in their life.


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## Mortgage u/w (Feb 6, 2014)

Something doesn't add up. According to your figures, you spend $48000 net on mortgage, insurance, utilities, gas. If we add your food and entertainment, that's an extra $6000 net. Combined, you're spending the equivalent of what you're base gross salary should be. If I rely on your figures, you can't make ends meet unless you work double your base salary which is not sustainable long term.

One would think you're living beyond your means.....but you go on to say your mortgage debt is roughly $150k, have a $30k unsecured debt, have savings and essentially live a frugal life. Again, something doesn't add up. I can't grasp how you are spending $4500 a month on 'essentials' given what you listed.

Unless you own multiple financed or leased cars, have more debt than you say you have (maybe a second mortgage, credit card debt, student loan?), there is no reason you can't make ends meet even on a $55k salary.

The answer may lie in your spending. Take a look at your credit card statement and bank account expenses. Make a budget and see where you're money is really going and cut out any useless spending.


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## Eclectic12 (Oct 20, 2010)

KaeJS said:


> ... I have been using online calculators and have determined that if I want to retire at age 55 with a million dollar portfolio, I will have to sock away $1250/month. That's a pretty high amount to be saving each and every month ...


What are the assumptions build into the online calculator?
Are you sure it isn't tilted to selling product for the provider?


Back in the day, my gross salary was $25K, the calculator said I needed six million to retire at age fifty five ... and that's when interest/GIC rates were much higher than today.


Cheers


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## diharv (Apr 19, 2011)

You are left with ONLY $3000 per month and you can't sock away $1250 of it per month for long term savings/investing? Not sure what the problem is but it looks more like a spending too much issue rather than a not earning enough issue.


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## AltaRed (Jun 8, 2009)

diharv said:


> You are left with ONLY $3000 per month and you can't sock away $1250 of it per month for long term savings/investing? Not sure what the problem is but it looks more like a spending too much issue rather than a not earning enough issue.


Don't think we can judge as I believe the OP did say he only spent about $500/month of entertainment plus food. That leaves $2,500/month (from the $3k) for non-essentials of which investing half of that shouldn't remotely be an issue, while the other half goes to retire the $30k debt. That debt is the current albatross that needs to be disposed of, perhaps on a priority basis....then invest.

Added much later: If the OP is undergoing angst because he perceives himself 'not keeping up' with some examples he is measuring himself again, e.g. the 10%, I recommend he read the book "The Subtle Art of Not Giving a F*ck" by Mark Manson. It gives a whole new spin on playing to one's strengths while avoiding the comparisons that can eat one alive and living a much happier, less stressful life. It is the antithesis of so many books written that says everyone can be a billionaire if they really tried. I've recommended it to those who are excessively unhappy with where they currently are in life.


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## james4beach (Nov 15, 2012)

Killing the debt is a great idea. Will put the OP farther ahead.


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## Longtimeago (Aug 8, 2018)

I have a suspicion that the OP just likes to complain and isn't really looking for advice on how to change things. 

He writes, _"I'm not sure what amount would satisfy me. I just need enough to have what I want. I would probably need close to a million, maybe 900k, and then also need about 70,000/year on top of that to have what I truly wanted._"

I find the 'just need enough to have what I want' quite telling. Need and want in the same sentence rarely make sense but are often used as if they were synonyms. I need a flush toilet but I don't need two, no matter how much I might want to have two. If the OP had $70k a year income, why on earth would he also need $900k capital on TOP of that? He is making no sense and isn't actually taking in anything being said to him as far as I can see. He's just ranting, not asking to learn anything.


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## Plugging Along (Jan 3, 2011)

KaeJS said:


> Wow...
> 
> I didn't expect this many replies and so soon. It's great to see this forum is still very active and even better to see some familiar faces.
> 
> I'll try to respond to all points but it might be haphazard as I only have a few minutes here and there usually. The reason for this, which might clear up some questions, is that my main full time job sucks. I only make about 55k/year so I need to supplement with outside gigs. This is why I work about 100 hours a week. $55k/year just doesn't cut it.


Is this the same chocolate milk drinking frugal once early 20's young man that was making barely $30K at a bank a few years ago? Who is now making $55K plus a side gig. If so, I think you should look back at your old posts. Even years ago, you worried a lot about money. I think a little perspective is still what you need. 


You are doing fine for your age. $250K networth under 30 is great. You have to remember as mortgages and debts get paid off, and income increases, you will be able to save more. You may want to provide some more detailed numbers in breaking out your regular and side gig, please expenses. 

For people who worry about having savings, there always the question of 'will I have enough?' Even I started a thread for myself years ago about feeling that it's just doesn't seem enough, and both my spouse and I are high income earners. It feels like a very slow process for how much 'sacrifice' and work one is putting in. When it becomes automatic, all of a sudden you look at your savings/investments and think 'Wow, it may just be fine'. (That's where I am now). Getting over that feeling of when it's enough takes while especially when you feel like you are working really hard. 

I think I said to you many years ago that you would be better off spending the time to upgrade your skills so you can make more income. That may still be the case if the side gigs haven't been working.


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## marina628 (Dec 14, 2010)

This post made me laugh as my son just turned 27 years old did 4 year degree and very talented but struggling on his $48,000 salary ,he has zero savings except what we have contributed and he lives in a $2200 a month apartment with roommates.He has always been independent and not allowed us to 'help' him buy his first home and wanted to do it on his own.I have a feeling now watching that condo go from $250,000 - $480,000 he likely feels different now.I am only speaking for myself right now but I am concerned about his future ,he does not have a union job or a pension plan and works as a Graphic Designer .I also have a 16 year old at home ,thank god I sold my business a few years ago and I know I have enough to provide for them but it is nice if they can get there on their own.Also last week he came from Toronto to Oshawa(closest train station to us) with his partner by Train/bus combo ,it was $14 each way for the train plus whatever they spent on the bus ,$80 return trip is insane.


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## Longtimeago (Aug 8, 2018)

marina628 said:


> This post made me laugh as my son just turned 27 years old did 4 year degree and very talented but struggling on his $48,000 salary ,he has zero savings except what we have contributed and he lives in a $2200 a month apartment with roommates.He has always been independent and not allowed us to 'help' him buy his first home and wanted to do it on his own.I have a feeling now watching that condo go from $250,000 - $480,000 he likely feels different now.I am only speaking for myself right now but I am concerned about his future ,he does not have a union job or a pension plan and works as a Graphic Designer .I also have a 16 year old at home ,thank god I sold my business a few years ago and I know I have enough to provide for them but it is nice if they can get there on their own.Also last week he came from Toronto to Oshawa(closest train station to us) with his partner by Train/bus combo ,it was $14 each way for the train plus whatever they spent on the bus ,$80 return trip is insane.


I'm somewhat at a loss to understand what you are saying marina628. As I read it, you are saying your son struggles to make ends meet with a $48k salary. He isn't that far off the median salary of $56k and is within what in most provinces would be considered 'middle class' in term of income. As some have already suggested to the OP here, the issue is not income, the issue is spending. I would suggest that is the same issue with your son. 

When I say that, I am not picking on your son in particular. I am amazed to read that a survey showed that the average Canadian believes that the income required for 'comfort' came in at $250,000! Read here: https://www.huffingtonpost.ca/entry/average-salary-canada-wealth_ca_5cd5740be4b07bc729783948

There are two comments in that article that I would like to point out. The first is, _"The more people earn, the more they believe they need"_ The second is, _"That's because as salary increases, so does expenditure."_ What do those two statements really mean and tell us?

Our NEEDS do not increase as we earn more, so why do we BELIEVE they do? Our expenditures do not HAVE to increase as our salaries increase, so why do we increase our expenditures? We need to eat but earning more does not mean we need to eat steak, it just means we can buy steak or hamburger where before we could only afford to buy hamburger. To me this shows the basic problem most people have of not being able to differentiate between what they NEED and what they WANT.

The more people earn, the more they tend to spend simply because they CAN, not because they NEED to. Ask your son to list his expenditures and divide them into needs vs. wants. You may be surprised what wants he puts in the needs column. https://www.nerdwallet.com/blog/finance/financial-needs-versus-wants/

Much of the problem is due to a totally unrealistic managing of our expectations. How can people actually believe they need $250k to be 'comfortable'? Do they also believe that anyone who is earning less than that is not 'comfortable' in their lives? That is after all what they are also saying by definition.

One of the best financial lessons I believe anyone can learn is to differentiate between real needs and what are just wants. If someone is having a hard time making ends meet on a $50k salary, I can GUARANTEE that they are spending too much on wants. Tell your son to adopt the 50/30/20 rule shown in the Nerdwallet link above and STICK to it.

That rule says 50% for needs, 30% for wants and 20% for savings. It isn't saying you can't have some wants, it's saying you can't have ALL your wants and you can't spend savings money on wants. It's supposed to be a RULE, not an optional, 'if it suits me today' good idea that then doesn't get followed. 
https://www.makingsenseofcents.com/...e the difference,life a little more enjoyable.


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## Just a Guy (Mar 27, 2012)

The funny part about what your saying is often people assume a lot of things. Take your meat example. Many times I go to Costco and pick up a vacuum pack of sirloin tip. The price per pound, often $8. The price for hamburger and stew meat Is often more, but people buy stew meat and hamburger for two reasons. 1) they assume it’s cheaper and don’t even look. 2) they don’t know how to cut up a sirloin tip and can’t be bothered to learn. So they eat stew meat and hamburger instead of sirloin tip beef.

My kids hate eating steak at a restaurant because they aren’t very good and asked me why the stuff we make is so much better. I pointed out that, in most restaurants, the stuff they are selling for steaks is the stuff we use for stews, Korean beef, Chinese food, tacos, etc.

As for your comment about earning more, spending more...it’s true for a lot of people but, for some of us, there comes a point where you have enough junk and don’t want more no matter what you can afford. 

What I’m a bit amazed at is Marina’s kid is still only relying on a paycheque for income. I would have expected he’d be an investor knowing his mom’s success.

My son decided to do another degree once he graduates this year and talked about how he could pay for his education, it’s a special program only offered out of town. I pointed out that the condo he owns would pay the rent for his apartment while he’s living away and that his resp would pay his tuition...he basically just needed to come up with food money. Now he’s looking for a way to generate a couple hundred dollars a month passively so he doesn’t have to work. Maybe a second rental, maybe some dividend paying stocks...who knows. He can easily increase his income without getting a job. He could also qualify for scholarships as he’s got a 4.0 gpa, but that’s not in his control other than the application, so we don’t count on it.


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## cainvest (May 1, 2013)

Just a Guy said:


> The funny part about what your saying is often people assume a lot of things. Take your meat example. Many times I go to Costco and pick up a vacuum pack of sirloin tip. The price per pound, often $8. The price for hamburger and stew meat Is often more, but people buy stew meat and hamburger for two reasons. 1) they assume it’s cheaper and don’t even look. 2) they don’t know how to cut up a sirloin tip and can’t be bothered to learn. So they eat stew meat and hamburger instead of sirloin tip beef.


Our Costco is priced way different ... ground beef $7.99 / kg, Stewing Beef $10.99 / kg with almost everything else being more expensive. Sometimes the sirlion roasts are $9.99 / kg but they are usually more than the stewing beef.

I did see Costco pulling a fast one last week, $5 off each Stewing Beef package BUT the price was jacked up to $13.99 / kg!

Always best to keep track of the prices to save money and buy things when they are *really* on sale.


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## Just a Guy (Mar 27, 2012)

I’m not talking the roasts, I’m talking the uncut vacuum packed stuff. Tenderloin, for example in a vacuum pack is about 1/3 cheaper than cut steaks. Same with striploin, I alway shake my head during bbq season when someone goes through the checkout with 5 packs of cut steaks, it’s one slice off the entire piece and 1/3 less cost. Plus you can make them as thick as you want.


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## cainvest (May 1, 2013)

Just a Guy said:


> I’m not talking the roasts, I’m talking the uncut vacuum packed stuff. Tenderloin, for example in a vacuum pack is about 1/3 cheaper than cut steaks.


I hear what you're saying, cutting the steaks yourself if often the cheaper route. 

My previous post was more about the prices you were quoting, over $16 a kg for ground beef or stewing beef ... not even close to that here.


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## marina628 (Dec 14, 2010)

Longtimeago said:


> I'm somewhat at a loss to understand what you are saying marina628. As I read it, you are saying your son struggles to make ends meet with a $48k salary. He isn't that far off the median salary of $56k and is within what in most provinces would be considered 'middle class' in term of income. As some have already suggested to the OP here, the issue is not income, the issue is spending. I would suggest that is the same issue with your son.
> 
> When I say that, I am not picking on your son in particular. I am amazed to read that a survey showed that the average Canadian believes that the income required for 'comfort' came in at $250,000! Read here: https://www.huffingtonpost.ca/entry/average-salary-canada-wealth_ca_5cd5740be4b07bc729783948
> 
> ...


My son had medical expenses of $8100 last year and he was only making $40,000 which was take home of $1232 every two weeks.His friend gave him 4 days notice he was leaving and left my son holding the lease on his own and he was paying $2400 on his own.Transit , insurance ,food , software costs it all ads up , even working full time he is paying his own adobe subscription and uses his own computer in a office in Toronto.I was trying to put some reality in this conversation on how real life is for people and Jag I am very happy your son has been able to purchase investments and doing well for himself ,with my son he has health issues and struggles so much these days.I am just happy we have been blessed and can back him up if he needs it. As for the poker stuff , I have slowed down quite a bit because of my son's issues but I am going to try to play the Sunday big games tomorrow at poker stars.


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## milhouse (Nov 16, 2016)

Just a Guy said:


> I’m not talking the roasts, I’m talking the uncut vacuum packed stuff. Tenderloin, for example in a vacuum pack is about 1/3 cheaper than cut steaks. Same with striploin, I alway shake my head during bbq season when someone goes through the checkout with 5 packs of cut steaks, it’s one slice off the entire piece and 1/3 less cost. Plus you can make them as thick as you want.


I agree that the vacuum packs are a better deal and we'll buy one to cut up and vacuum freezer pack or if we're doing a large family bbq. But one of the reasons I like to _selectively_ buy the odd pre-cut packs is that you can examine the marbling and composition, which you can't really do with the vacuum packs. Every so often, you'll find a set of AAA labelled steaks but with prime grade level marbling. Or on the ribeye steaks, they'll have a large ribeye cap which is my favourite piece of steak. When I can find those instances, for me, the premium is worth it.


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## Longtimeago (Aug 8, 2018)

marina628 said:


> My son had medical expenses of $8100 last year and he was only making $40,000 which was take home of $1232 every two weeks.His friend gave him 4 days notice he was leaving and left my son holding the lease on his own and he was paying $2400 on his own.Transit , insurance ,food , software costs it all ads up , even working full time he is paying his own adobe subscription and uses his own computer in a office in Toronto.I was trying to put some reality in this conversation on how real life is for people and Jag I am very happy your son has been able to purchase investments and doing well for himself ,with my son he has health issues and struggles so much these days.I am just happy we have been blessed and can back him up if he needs it. As for the poker stuff , I have slowed down quite a bit because of my son's issues but I am going to try to play the Sunday big games tomorrow at poker stars.


I'm sorry marina628 but anyone can come up with excuses for why they can't make ends meet. My immediate response to your comment re your son's roommate moving out for example is, then why did your son not realize that he could no longer AFFORD to live there and pay $2400 by himself? Either you get a new roommate fast or you realize that the downside to living with a roommate is perhaps something you don't want to have to deal with and find a place to live that you can afford on your OWN. And most importantly, you learn (or your parents tell you the first time) that you NEVER sign a lease for a shared apartment without your roommate also being on the lease! 

Compare your son's income to this article. https://www.thestar.com/news/gta/20...ftertax_salaries_of_30000_or_more_a_year.html How is it that he on his $48k current income cannot be on the path to where this woman is on a $39k salary? 

I will say it again, it isn't his income that is the problem, it is his expenditures. If he looks at the 50/30/20% rule, it will TELL him what he can AFFORD and then it is his job to find answers that FIT that. Instead, he pays rent he can't afford and complains he doesn't have enough income. He is looking through the wrong end of the telescope. 

How do all the people who make less than your son does manage to live if they don't have the 'bank of mum and dad' to turn to? Somehow, they find a way to make it work obviously as the woman in that article did. They find a way because they HAVE to. You wrote, _"I was trying to put some reality in this conversation on how real life is for people"_ but in fact what you were putting in to this conversation was how your son can't manage his income, not how other people do manage in 'real life'.

The question you should be asking yourself and your son is, how is it that others can manage and he cannot?


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## andrewf (Mar 1, 2010)

My advice to someone earning $50k in Toronto is to find a job anywhere else.


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## AltaRed (Jun 8, 2009)

andrewf said:


> My advice to someone earning $50k in Toronto is to find a job anywhere else.


Sounds appropriate, but it would eliminate most hospitality and labourer jobs like servers, cleaners, busboys, stock clerks, etc. Essentially anyone making less than $27/hr. on a full time 35 hour week. The city would cease to function.

A full time minimum wage job is about $27-30k per year. Hence the very broad and very real issue regarding affordable (social) housing that almost every city mayor is struggling with.


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## m3s (Apr 3, 2010)

andrewf said:


> My advice to someone earning $50k in Toronto is to find a job anywhere else.


Just google "Millennials are leaving big cities" and there are a bunch of recent (US based) articles that point to the rising costs and drawbacks of major cities

Having lived across Canada I find you get a lot more bang for your buck outside of major cities now. Of course there is more upwards potential in a major city but I would say there is a lot more work life balance potential elsewhere. Someone like a graphic designer is a perfect candidate for digital nomad who can work from anywhere nowadays

If this trend continues I wouldn't want to be left holding the bag (of overpriced RE)


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## humble_pie (Jun 7, 2009)

marina628 said:


> My son had medical expenses of $8100 last year and he was only making $40,000 which was take home of $1232 every two weeks.His friend gave him 4 days notice he was leaving and left my son holding the lease on his own and he was paying $2400 on his own.Transit , insurance ,food , software costs it all ads up , even working full time he is paying his own adobe subscription and uses his own computer in a office in Toronto.
> 
> I was trying to put some reality in this conversation on how real life is for people and ... with my son he has health issues and struggles so much these days.I am just happy we have been blessed and can back him up if he needs it.




marina i am sorry your son had to face major health challenges & i sincerely hope all that is behind him now.

i believe you have accurately described - in general - the kinds of problems that face our young people in big canadian cities today. Extreme housing costs. Overhanging student debt. Costs plus stress of distance commuting. If married w young children, costs of day care. All of the foregoing, often on low salaries.

canadians need to take seriously the circumstances facing generation zedders & millennials. Oh yes & immigrants too. These young adults are the future of our country. What can we do to help?


.


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## andrewf (Mar 1, 2010)

AltaRed said:


> Sounds appropriate, but it would eliminate most hospitality and labourer jobs like servers, cleaners, busboys, stock clerks, etc. Essentially anyone making less than $27/hr. on a full time 35 hour week. The city would cease to function.
> 
> A full time minimum wage job is about $27-30k per year. Hence the very broad and very real issue regarding affordable (social) housing that almost every city mayor is struggling with.


Maybe it would help normalize wages and affordability?


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## marina628 (Dec 14, 2010)

humble_pie said:


> marina i am sorry your son had to face major health challenges & i sincerely hope all that is behind him now.
> 
> i believe you have accurately described - in general - the kinds of problems that face our young people in big canadian cities today. Extreme housing costs. Overhanging student debt. Costs plus stress of distance commuting. If married w young children, costs of day care. All of the foregoing, often on low salaries.
> 
> ...


Thanks Humble and no my son's health is not resolved yet he will likely have to go on sick leave while he deals with it ,it has been a tough few months for us and lots of trips to Toronto for us.My son is very lucky he has us and we are lucky to have the financial means for all of this.If you have your health you have everything and we just pray he gets healthy again.


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## Saniokca (Sep 5, 2009)

marina628 said:


> Thanks Humble and no my son's health is not resolved yet he will likely have to go on sick leave while he deals with it ,it has been a tough few months for us and lots of trips to Toronto for us.My son is very lucky he has us and we are lucky to have the financial means for all of this.If you have your health you have everything and we just pray he gets healthy again.


Marina I hope your son gets better. I also hope that you don't pay too much attention to some comments here.


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## marina628 (Dec 14, 2010)

Longtimeago said:


> I'm sorry marina628 but anyone can come up with excuses for why they can't make ends meet. My immediate response to your comment re your son's roommate moving out for example is, then why did your son not realize that he could no longer AFFORD to live there and pay $2400 by himself? Either you get a new roommate fast or you realize that the downside to living with a roommate is perhaps something you don't want to have to deal with and find a place to live that you can afford on your OWN. And most importantly, you learn (or your parents tell you the first time) that you NEVER sign a lease for a shared apartment without your roommate also being on the lease!
> 
> Compare your son's income to this article. https://www.thestar.com/news/gta/20...ftertax_salaries_of_30000_or_more_a_year.html How is it that he on his $48k current income cannot be on the path to where this woman is on a $39k salary?
> 
> ...


I wrote and deleted two replies to you so far tonight because these words really hit a nerve but deleted them. I have been here since 2011 and long standing members know my story about being in a car accident in 1997 that left me in a wheelchair and eventually I started a web business and went by seat of my pants dabbling into a bit of everything like domain sales ,niche marketing under cj.com and other programs and eventually built a business that I sold a few years ago for 7 figures. I signed a 2 year non disclosure and as soon as these terms were met I started my second successful business , not earning as much yet as before but I crossed the 60% sales mark of my top 2012 performance month in September this year .
My son gets his drive and ambition from me and his hard work ethic from both of us ,on June 26 my son was diagnosed with a serious medical condition and since that time he spend $280 a week on prescriptions and likely will be taking a leave from work very soon on doctor's advise .I do not intend to post spreadsheets of his actual expenses as this is a forum and I do not know you but I do know many here in Toronto who I have met in person and they have met my family.I did not want to post this info as some are dear to me and we have not had time to discuss the hell we are going through in person.For that I apologize to my friends especially Rachelle if you are reading this.

As for the lease he did indeed rent the apartment with a friend of 10 years and that friend was on the lease.His friend lost his job moved back with his parents and just walked from his responsibility leaving my son to pay rent alone until he could find a replacement.He tried twice to get others approved on lease but neither had the income or the credit , he finally replied to ad on bunz and found a 21 year old girl who made $24000 a year and good credit and with my sons income the landlord removed the other tenant.The roommate pays $850 and my son pays the rest.You should not assume or judge people and to post a article from 2012 when you could get 35 year amortization and everything else was so much cheaper shows how bad the affordability is in this city.
My son had gone through two surgeries and after only five days was working from home while in a lot of physical pain ,he is my hero right now for surviving what he is going through and you have no idea how hurtful your words and perception of the situation is.


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## marina628 (Dec 14, 2010)

One final thing on this subject my son has been refusing our financial help even though I could pay everything for him and would no questions asked .The one thing he did allow me to do this week was put $20,000 in his TFSA for a rainy day fund and that was more for my peace of mind not his asking or complaining.


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## Just a Guy (Mar 27, 2012)

Many people who have never been sick or injured will never understand what it’s like to go through. They just tell you to suck it up, even if you don’t have working limbs. Just ignore them. We’ve all had to. Hopefully they won’t someday have to encounter what others had to go through. 

I would encourage him to invest that Tfsa himself. Passive income is what turned my life around. Getting the confidence to invest, especially when your back is against a wall is tough, but the motivating factors are high, you need to succeed. I wish him good luck.


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## james4beach (Nov 15, 2012)

marina628 said:


> I wrote and deleted two replies to you so far tonight because these words really hit a nerve but deleted them.


marina, remember that these "characters" around here are random nobodys on the internet and should not be taken seriously in any way. People who post insensitive and unpleasant content here really don't deserve any attention or energy.

Reminds me of a man I keep seeing at my local coffee shop. He's socially inept or possibly even malicious. He's always at the shop, introducing himself to people and talking with a new person just about every time I see him. Usually I overhear him saying arrogant, insensitive and inappropriate things. The last time I saw him there, he was talking with a woman (his latest victim) and had reduced her to tears. She had actually started crying and stormed out of the place.

When you spot people like that, it's best to just avoid interacting with them. Engaging with them further is almost certainly a mistake.

I'm sorry to hear about your son's health issues and I think what you described shows some of the real issues people face, things not obvious to many people. There are other factors at play besides just gross income, which you pointed out: health, medical expenses. The unexpected surprises in housing/rent arrangements.

You did in fact bring some reality to the conversation. Some people are totally clueless about the sequences of misfortune and just random luck which can strike people. Those with the holier-than-thou attitude had better hope and pray that this kind of random misfortune doesn't happen to them. The reality is, it can happen to anyone.

I wish your son the best. Repeating your love and support for him is important and is very powerful. For me personally, knowing I have the unconditional support of my mom has always been a powerful positive force which has given me strength.


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## the_apprentice (Jan 31, 2013)

Thanks for sharing your story Marina. Reading that makes me want to work even harder and appreciate all the good things in life. Luckily he has great parents to help him through these difficult times.

I think you're doing a great job KaeJS. I'd say your current net worth is good for your age and would consider you as middle-class. Although we are similar in age, my net worth was indistinguishable to yours at your age and now I'm at a place I never imagined. Be positive, keep working hard and develop good habits. You will see how things can change for the better, quickly.


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## Plugging Along (Jan 3, 2011)

marina628 said:


> I wrote and deleted two replies to you so far tonight because these words really hit a nerve but deleted them. .



You do not need to justify yourself or your family to some random nobody, especially this one. He is known for frequently lecturing about how he retired at 43 with perfect health. blah blah blah. He is out of touch with most people here and most definitely with anyone who has struggled with a medical condition. He just loves to lecture and tell people how they are living wrong. His posts are condescending and riddling with logical fallacies and assumptions. He is not worth your time. 

Most importantly, I am sorry you are going through this with your son. You have been one of the most inspirational people here. I know it is much more difficult when your child is suffering, it's more difficult than the parent going through the same thing. I send you my thoughts and wishes for strength to get through these times. I also caution you to take care of yourself too.


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## Longtimeago (Aug 8, 2018)

I wish only the best for your son marina628, as I wish for anyone in the world REGARDLESS of their personal circumstances. I do not know all of your son's circumstances as you say, nor do I expect you to disclose them here. However, if you are going to post on this subject and SUGGEST that someone earning $48k per year will have a hard time making ends meet, 'add some reality' as you put it, then you need to be prepared to defend that contention. NOT defend it under a set of personal circumstances that face your son, but as a statement that applies to at least a large percentage of those earning $48k or thereabouts.

The topic is 'how do you ALL do it' as started by the OP, not about your son and his circumstances. If you NOW tell us that your son is spending $280 per week on prescriptions, then you are not talking about an average 27 year old earning $48k. If you tell us NOW that his roommate only pays $850 of the $2400 rent, then you ARE talking about your son in fact still paying more rent than he can afford to pay. THAT has nothing to do with his medical condition, that's simply basic finances 101.

I can understand that you are emotional about your son, but this forum is not about your emotions or your son and this thread is also not about them. This thread is about, 'how do you all do it' and the answer to that question in my opinion, is by managing your finances based on needs vs. wants and what is affordable vs. what is not affordable regardless of someone's unrealistic expectations. I am totally unemotional about it and would suggest if you cannot be the same, then perhaps you should not participate in this thread. But whatever you choose to do, do not try to put blame or guilt on me for dealing with the subject in terms that address the MAJORITY of 27 year olds earning $48k unless I am made AWARE of an individual's personal circumstances that remove that individual from the majority, in which case that individual is not the subject of this thread.


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## Just a Guy (Mar 27, 2012)

LTA, one thing you seem to have missed is marinas son was making 48k/year and was doing okay. Now that he’s sick, chances are his income is going to $0, and he lost his roommate at the same time. 

When I was injured personally I was living a “debt free” lifestyle and making six figures a year. When the income goes to zero for several years, and you have a family to support, huge medical expenses, and no real savings because you just got debt free, I can tell you from experience, you can become extremely poor very quickly with no way to turn it around. It’s not a “spending habit” at that point at all.

This is why I personally advocate for passive income over living debt free. I know what a house of cards living debt free really is.


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## Longtimeago (Aug 8, 2018)

james4beach said:


> marina, remember that these "characters" around here are random nobodys on the internet and should not be taken seriously in any way. People who post insensitive and unpleasant content here really don't deserve any attention or energy.
> 
> Reminds me of a man I keep seeing at my local coffee shop. He's socially inept or possibly even malicious. He's always at the shop, introducing himself to people and talking with a new person just about every time I see him. Usually I overhear him saying arrogant, insensitive and inappropriate things. The last time I saw him there, he was talking with a woman (his latest victim) and had reduced her to tears. She had actually started crying and stormed out of the place.
> 
> ...


Yes james4beach, anyone can get struck by lightning. However, if a thread is about an issue in general, bringing up a case of lightning striking does not change the general question or answers. I see that happening here quite often. An outlier situation is given as a rebuttal of a general principle. In this case, marina wrote INITIALLY as if her son was just another average 27 year old trying to make ends meet. Read her first response again.

_This post made me laugh as my son just turned 27 years old did 4 year degree and very talented but struggling on his $48,000 salary ,he has zero savings except what we have contributed and he lives in a $2200 a month apartment with roommates.He has always been independent and not allowed us to 'help' him buy his first home and wanted to do it on his own.I have a feeling now watching that condo go from $250,000 - $480,000 he likely feels different now.I am only speaking for myself right now but I am concerned about his future ,he does not have a union job or a pension plan and works as a Graphic Designer .I also have a 16 year old at home ,thank god I sold my business a few years ago and I know I have enough to provide for them but it is nice if they can get there on their own.Also last week he came from Toronto to Oshawa(closest train station to us) with his partner by Train/bus combo ,it was $14 each way for the train plus whatever they spent on the bus ,$80 return trip is insane._

She said "this post made me laugh". Her son has a degree, is very talented but struggles to make ends meet on $48k and has no savings. Now in terms of this thread to that point, do you read anything in that that makes you think her son is different in any way? To me, that reads VERY clearly as someone who does not know how to manage their money, plain and simple. The 'made me laugh' comment leads me to think the person writing thinks that it is unreasonable to expect people to be able to manage on their existing income.

In her next response she suggests she was only trying to add some 'reality' but AGAIN does not indicate any reason why I or any other reader should consider her son as not being an average 27 year old earning $48k and not able to manage their finances. It may have been clear to her what 'reality' she was referring to but she did not share anything that would indicate that in FACT she was not talking about this subject in general and only using her son's income as an EXAMPLE of a TYPICAL 27 year old. She was talking about her son in particular and NOT talking about the subject of this thread in general.

In response then to her second comment, I responded again as if her son were an example of the GENERAL issue. She gave no indication that she was in fact talking about an outlier from the general issue. That's on her, not on me.


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## marina628 (Dec 14, 2010)

It is possible to get by on $48000 gross but in Toronto you will not have a very good quality of life on that income given the price of housing ,transit and groceries .People get by but I seriously doubt they are comfortable living that way and you just need to join a tenant group in GTA to see the terrible conditions they live in.I am hosting a couple of refugees from Egypt at my home for Christmas and through their connections I have met many young people with education and full time jobs who are suffering mental illness and depression because they are scared of being homeless.The op and I have been here many years and I think he knows he is one of the blessed one . I use to get crap from some members here to give my kids a $40 a week allowance if only we could roll the clock back to these days lol


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## Longtimeago (Aug 8, 2018)

Just a Guy said:


> LTA, one thing you seem to have missed is marinas son was making 48k/year and was doing okay. Now that he’s sick, chances are his income is going to $0, and he lost his roommate at the same time.
> 
> When I was injured personally I was living a “debt free” lifestyle and making six figures a year. When the income goes to zero for several years, and you have a family to support, huge medical expenses, and no real savings because you just got debt free, I can tell you from experience, you can become extremely poor very quickly with no way to turn it around. It’s not a “spending habit” at that point at all.
> 
> This is why I personally advocate for passive income over living debt free. I know what a house of cards living debt free really is.


I will say the same to you as I have just said to james4beach. The topic was not marina628's son. It was 'how do you all do it' in GENERAL. Marina628 chose to respond to THAT topic with her son's particular circumstances in mind but without DISCLOSING she was NOT talking about the subject as presented but in fact an outlier that was specific to herself.

I responded to her on the subject as presented and of course since that was not the subject she was talking about, she CHOSE to read what I wrote as applying to her son's personal circumstances as if I KNEW about them. 

It isn't me who 'missed one thing, it was marina628 who chose to write about a specific situation rather than the general subject. But in her first response she did not indicate that in fact she was not responding to the thread, she was sidetracking to writing about her son's outlier situation. So as far as I am concerned it was marina628 who 'missed one thing' that was that the topic of the thread was not her son. 

I have no problem with someone choosing to start a thread on a specific situation if they want to. I DO have a problem with someone using a specific situation to attempt to rebut a different situation entirely and especially without making it CLEAR that they are in fact talking only about a specific situation which they have not even described! 

In this case, most people earning a reasonable income and saying, 'I can't make ends meet, how do all you people do it', obviously has problems not with their income but with their expenditures. You know that, I know that and most here know that. That was the subject of this thread and that is all I responded to.


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## Just a Guy (Mar 27, 2012)

I was replying to post 64 where you did have background. You seemed to persist on 48k being enough. I was pointing out that, even being debt free and making six figures, one can run into trouble and become dead broke over something that took only seconds in your life. In general, bad things happen all the time. It’s not as uncommon as you may like to pretend. 

You missed your own point, I was talking in general about the topic, not specifics of marinas kid.


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## AltaRed (Jun 8, 2009)

james4beach said:


> marina, remember that these "characters" around here are random nobodys on the internet and should not be taken seriously in any way. People who post insensitive and unpleasant content here really don't deserve any attention or energy.


Ditto, but I would advise the Ignore feature works quite well in forum software. Life is too short to put up with trolls, narcissists and know-it-alls, so I find it best to use it somewhat generously.


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## lonewolf :) (Sep 13, 2016)

With good money management & some thinking I think 99.9% of the population have the potential to have an excellent life earning 48k a year. Though not everyone knows how to stretch a dollar.


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## Longtimeago (Aug 8, 2018)

marina628 said:


> It is possible to get by on $48000 gross but in Toronto you will not have a very good quality of life on that income given the price of housing ,transit and groceries .People get by but I seriously doubt they are comfortable living that way and you just need to join a tenant group in GTA to see the terrible conditions they live in.I am hosting a couple of refugees from Egypt at my home for Christmas and through their connections I have met many young people with education and full time jobs who are suffering mental illness and depression because they are scared of being homeless.The op and I have been here many years and I think he knows he is one of the blessed one . I use to get crap from some members here to give my kids a $40 a week allowance if only we could roll the clock back to these days lol


Marina628, here is a good article on Toronto specifically. https://www.huffingtonpost.ca/entry/toronto-poverty-capital-working-age_ca_5da3a7dee4b02c9da04c8d54

In responding to a thread on 'how do you all do it', we can respond based on Canada as a whole, a specific province, a specific city or a specific situation. What we cannot do is respond to a question about one with an answer that applies to another.

So, if you want to talk about Toronto in general I am happy to do that but I will be referring to Toronto in general, not to any individual in Toronto. When you add comments like, "people with education and full time jobs who are suffering mental illness and depression", or "refugees from Egypt", you are then narrowing the scope of the topic. So do you want to have people respond to your comments in regards to those specific people or to an average, healthy, individual with the normal issues of someone living in Toronto? 

I firmly believe first and foremost that we are all the architects of our own lives. Many years ago someone quoted to me (I don't know who the quote is from), 'you can be the architect of change or the victim of change. What is certain is that change will occur.'

When I read the article I have linked above in this response, I think that if I were a new grad just looking at starting out in Canada on my own, that article would say to me, 'do not plan to live and work in Toronto'. That would be step one of my taking control of my own life in terms of where I would live and work. But in fact, most people don't think that way. They just go out and look for a job, 'where they are' and then complain when they aren't happy with the consequences of that. They don't blame themselves for their situation, they blame others. They are the 'victims of change', not architects of their own changes.

We cannot roll back the clock to how things were when I was growing up in Toronto and was able to build a comfortable life there leading to early retirement. We can't even roll it back to how my sons are doing the same. So why then do so many young people growing up in Toronto today, not realize that? Or why are their parents not telling them that? I have a grandchild today growing up in Toronto and my advice to that grandchild is to look outside Toronto for the future, the odds are just getting too high of making it in Toronto UNLESS you are going to go into a career that pays well above average.

How do I come to that conclusion my grandchild may ask. The answer is to apply the 50/30/20 rule to begin with and see if a place and job make sense. IF it cannot be done in a given place with a given job then it simply doesn't make sense to do it! There are lots of good basic financial rules of thumb that anyone can use if they just choose to use them. There are some good ones listed here: https://twocents.lifehacker.com/10-...0-20 rule,wants, like dining or entertainment.

It is a question of what do you put first if in fact you even think to question anything at all. If someone chooses to say, 'I'm going to live and work in Toronto' as their first criteria before going out looking for a job, they will then have to deal with ALL the consequences of doing so. If they put the 50/30/20 rule first in deciding where to live and work, they will in fact probably decide that it isn't going to work in Toronto UNLESS they have an above average income job they can expect to land at least at some point in the relatively near future. That is where it then becomes an individual situation.

If someone graduates as a lawyer for example, gets a job in a good partnership right away, they can decide to stay in Toronto I'd say. Go to Payscale and you will find average salaries for many jobs and specific to Toronto. Here is a graphic designer for example which you obviously have a specific interest in. https://www.payscale.com/research/CA/Job=Graphic_Designer/Salary/b44386f2/Toronto-ON A lawyer averages twice that. An entry level lawyer earns $71k on average in Toronto.

But for the vast majority of people who will work in the vast majority of jobs, the equation is probably never going to work in Toronto. So what is the conclusion they should reach?


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## Longtimeago (Aug 8, 2018)

Just a Guy said:


> I was replying to post 64 where you did have background. You seemed to persist on 48k being enough. I was pointing out that, even being debt free and making six figures, one can run into trouble and become dead broke over something that took only seconds in your life. In general, bad things happen all the time. It’s not as uncommon as you may like to pretend.
> 
> You missed your own point, I was talking in general about the topic, not specifics of marinas kid.


OK, in general on $48k you can make it work in most of Canada, it is enough in general. In specific situations it will not work. The only difference may be in how common or uncommon such situations are. I consider them uncommon, you have a bias towards believing them to be more common than I think they are. No way to resolve that difference.


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## Just a Guy (Mar 27, 2012)

There is also a difference between living in gta, gva and the rest of Canada. Talk about a biased view. Life isn’t black and white.


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## Longtimeago (Aug 8, 2018)

lonewolf :) said:


> With good money management & some thinking I think 99.9% of the population have the potential to have an excellent life earning 48k a year. Though not everyone knows how to stretch a dollar.


I agree, it is the 'thinking' that seems to be missing for many.

Simple example. my neighbour has a daughter who graduated in Education with the intent of becoming a teacher. So how much time and effort do you think she or her parents put in to first investigating the potential market for teachers and what kind of income could be expected? I know the answer, basically none. The salaries and benefits actually aren't too bad but it is the number of positions available vs. the number of applicants that is the issue in some places. There are simply too many applicants for too few jobs.

So where is my neighbour's daughter, answer in rural Ontario. Look at this list: https://www.jobbank.gc.ca/marketreport/outlook-occupation/15904/ca So where should she be looking for a job, where are the 'good' opportunities'? Answer, Northwest Territories, Yukon, BC and Quebec. Where does she want a job? Answer, Ontario which has the the most 'limited' opportunities. 

Her parents complain bitterly that it has been 2 years since she graduated and she has only managed to find some fill-in on vacation, etc. type work. They also complain that retired teachers are even taking most of that work. 'They have a pension, they should live on it and leave the part-time work to new grads like our daughter who need the money'. Blame everyone but themselves.

They don't tell her, 'you should have considered where the job opportunities were before you went down that path and either been prepared to go where the jobs are or pick a different path.'


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## Longtimeago (Aug 8, 2018)

Just a Guy said:


> There is also a difference between living in gta, gva and the rest of Canada. Talk about a biased view. Life isn’t black and white.


No one said it was black and white but you have to decide what the topic is and relate discussion to that topic as I have said. Not a question about one topic and an answer that is relative to another topic obviously.

In most of Canada managing on $48k should not be an issue. In the GTA it is no doubt much harder to do but then that is the choice of the person who insists on living and working in the GTA or GVA. I would advise 'most' that they should be able to manage on $48k. I would advise those who chose to live and work in the GTA or GVA that they should either find a way to earn more or accept the consequences of their choice, or move somewhere else. It's their choice to make but most don't actually make a conscious choice at all.


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## Longtimeago (Aug 8, 2018)

I have sometimes tried to explain to individuals that earning more income does not necessarily mean a higher standard of life and often in fact can mean a lower quality of life. But not many want to hear about that.

In the small town where I currently live, you can rent a nice little one bedroom apartment for $600 a month for example. So the income someone working around here needs is lower than the income someone needs in somewhere like Toronto to enjoy the same standard of living in terms of accommodation AND at the same time, quite likely a higher quality of life.

https://www.macleans.ca/economy/best-communities-canada-2019-supercharged-small-towns/

On the subject of 'how do you all do it', the question of 'where do you do it' really doesn't come up much. Maybe it deserves more attention.


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## m3s (Apr 3, 2010)

Relative to income - Canada has been shown to have highest house price to income ratio in the OECD by a large margin, mostly driven by the insanity of GTA and GVA. Yet there was a study years ago that showed Canada also has some of the most affordable housing relative to income if you break it down by city. The most affordable ones were in the maritimes and quebec at the time, but the country is massive and we have everything from the most outrageous RE to the best deals in the world imo. And if you could work remotely, the world is your oyster


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## Longtimeago (Aug 8, 2018)

Part of the problem is that people want what they want. Try telling a 23 year old bank teller in Toronto that really, s/he cannot afford to live there on their income. The response is likely to be something like, 'but I should be able to, it's where I want to live for all the excitement of the city that a younger person wants to have.' 

I don't know where this idea of 'I should be able to' comes from. It implies entitlement obviously but where did this sense of entitlement come from? Most people don't think they 'should be able to' buy a Ferrari, so why do they think they should be able to live in a certain place? 

I remember several decades ago talking to a couple who owned an art gallery in Aspen, Colorado. They were moaning about the fact that their children who were born and raised there could not afford to get on the first step of the property ladder because Aspen real estate prices had been driven ever upward by all those who wanted to own a ski chalet in Aspen. I asked them why then they were in a business that depended on those people to make money? Why were they not discouraging tourism/skiing in Aspen rather than encouraging it? People want to have their cake and eat it too. 

That same young bank teller can do just fine in our small town but it isn't where they WANT to live. Well as the song goes, 'you can't always get what you want'.


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## Just a Guy (Mar 27, 2012)

If the bank teller thought outside of the box and developed passive income, then she could probably live wherever they want. She just wants to live there on a bank teller’s income and wants that income increased. Heaven forbid people actually did something to earn money.

I raised my kids with the idea I never wanted the to HAVE to work, I expect they will work, doing whatever they want, but they’ll have their income come from other means so that they can to anything they want. At least until sags’ kids lead the revolution to take from those who earn to give to themselves.

The idea of earning your money instead of just getting it given to you is so unfair and old fashioned.


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## sags (May 15, 2010)

Your passive income is built on 100% financing and the value of your units are falling quickly. That is a recipe for financial disaster.

I have no similar concerns. Our pensions are over 100% funded and the government isn't going bankrupt any time soon.


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## Longtimeago (Aug 8, 2018)

sags said:


> Your passive income is built on 100% financing and the value of your units are falling quickly. That is a recipe for financial disaster.
> 
> I have no similar concerns. Our pensions are over 100% funded and the government isn't going bankrupt any time soon.


LOL, how old are you sags? Surely you are old enough to know (not directly but in your parents generation) about things like the hyper inflation of Germany in 1923. https://web.nli.org.il/sites/NLI/En...-Germany/Weimar-Republic/Pages/Inflation.aspx What do you think happened to those on a nice comfortable pension of whatever kind there? 

In more recent years Greece has had several pension cuts after their economy got into serious trouble with the 2008 Recession. https://web.nli.org.il/sites/NLI/En...-Germany/Weimar-Republic/Pages/Inflation.aspx

Any assumption that such things could not happen in Canada are very patriotic thinking perhaps but not based on any actual factual reasoning. A country can indeed go bankrupt whatever you may think.


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## Just a Guy (Mar 27, 2012)

He obviously doesn’t understand cash flow either. I couldn’t care less for the value of my units (I’m not selling and they’re already financed), I care about the rents they generate. As the fools who overpaid for their houses lose value, the demand for rentals goes up (since they have no cash flow to cover the expenses). The banks won’t foreclose on me since the cash flow easily supports the financing. What happens to the homes of those unemployed union workers though...add a few more to my pool.

As inflation increases, the cost for me to pay off the properties decreases but rents remain at market value keeping up with inflation. The cost of my loans remains the same, buying power of the dollar decreases, meaning higher inflation, cheaper to pay off. Also, the last few I bought cost less than a car, not even a fancy car. I’m really terrified for my future.

If we get hyperinflation, your pension will be worthless and I’ll pay off all my loans in one month of rent, while still generating inflation adjusted income. Pensions are the people who are on a house of cards here.

Truly his depths of misunderstanding is truly limitless...


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## ian (Jun 18, 2016)

You do not have to go back that far in Canada to see the damage that four or five years of inflation can do to anyone on receiving a non indexed DB pension. To make matters worse, inflation typically hits retired people on fixed income harder than it does the general population based on differences in their hypothetical basket of goods. That is why some groups run a separate inflation factor for retirees. Oil isdown right now. Just think of the impact on fixed income retirees who heat with oil if the price of fuel increased 50 percent or more from one year to the next. Or if increasing property values in Toronto or Vancouver push up rents at multiples of the inflation rate.

Same with currency fluctuations. Our Canadian currency is in the toilet at the moment-and has been for a few years. It is not difficult to see what impact that has had on imported foods, fruits and veg, clothing, and many consumer goods. It is part of the inflation factor.

We use our DB as one leg in the stool. We count on our equity investments to provide some shelter from inflation. When we look at returns, we always consider returns net of inflation. If inflation is running at 1.5, getting 1 point on our investments means that we are loosing money every year this occurs.


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## Just a Guy (Mar 27, 2012)

Yeah, wouldn’t want to invest in inflation protected assets, union job and begging is the only way to go.


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## ian (Jun 18, 2016)

Just ask those living in the Maritimes about the bankrupt Altlantic Co-Op DB plan. Or the Sears or Nortel plans. Or stateside, ask those in the Teamsters Central States Pension plan or those in the Mine Workers Joint DB plan.

Well funded DB plans are only a recession away and a bankruptcy away from revising payouts to retirees.


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## Just a Guy (Mar 27, 2012)

Those are just greedy corporations who also lost their shirts. Heaven forbid we took responsibility for our own money. Most people don’t have a clue as to what their pension is invested in. Can’t be bothered, too much work. Couldn’t blame someone else then.


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## sags (May 15, 2010)

If you think pensions will be destroyed, what do you think will happen to their underlying investments ?

Both our CPP and OAS and one of our pensions are indexed, and our fixed living expenses are very low, so inflation increases actually improve our finances.

I read the financial reports from our pensions. They are invested in commercial real estate, infrastructure, stocks, bonds.......well diversified and all good.

If our pensions were to collapse due to a financial meltdown, the stock markets would have already been obliterated.


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## james4beach (Nov 15, 2012)

ian said:


> You do not have to go back that far in Canada to see the damage that four or five years of inflation can do to anyone on receiving a non indexed DB pension. To make matters worse, inflation typically hits retired people on fixed income harder than it does the general population based on differences in their hypothetical basket of goods. That is why some groups run a separate inflation factor for retirees. . . Same with currency fluctuations.


Why don't we have more people speaking up against the Bank of Canada and their policy of low interest rates forever?

I think the central bank is being totally reckless. It obviously ruins the fixed income returns of savers, to begin with. The central bank is trying to induce what they think is a healthy amount of inflation, but there's a danger that they could spark some significant inflation that starts running away from them. Low interest rates are a dangerous game and I would not be surprised to wake up one day with over 6% inflation, given the easy money that's been flowing for the last decade.

It's a big reason why I have an allocation to gold. Protection in case this grand experiment by the Bank of Canada fails to work smoothly.


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## Just a Guy (Mar 27, 2012)

You realize fiat currency needs inflation or it fails. It’s not like we’re on the gold standard anymore. Cash is crap, assets it where it’s at.


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## sags (May 15, 2010)

With so many retailers within a few blocks, we get many deals on almost everything. We shop for clothes and household goods at the Goodwill and Sally Ann.

The other day Loblaws had packages of bagels on sale.....raisin/cinnamon, white, and whole wheat for 10 cents a package of 4. 

We bought 25 packages for $2.50 and put them in the freezer. Yea baby..........that is what I am talking about.

Inflation.........what inflation ? In many spending areas there is little to no inflation.

Inflated housing and rentals is completely detached from economic reality. Those rise in costs are driven by greed by the developers and builders and landlords.

Anyone care for a toasted bagel with jam and a cup of tea ?


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## AltaRed (Jun 8, 2009)

james4beach said:


> I think the central bank is being totally reckless. It obviously ruins the fixed income returns of savers, to begin with. The central bank is trying to induce what they think is a healthy amount of inflation, but there's a danger that they could spark some significant inflation that starts running away from them. Low interest rates are a dangerous game and I would not be surprised to wake up one day with over 6% inflation, given the easy money that's been flowing for the last decade.


Everyone is too indebted to cause runaway inflation, i.e. they don't have the fiscal capacity to consume/invest/spend any more than they are already. I used to be a believer in a future risk of high/hyper inflation. No more simply because there is little chance we can overheat the economy that much any more with limited cash flow. Bounce rates up 1% and bankruptcies start to happen.


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## james4beach (Nov 15, 2012)

I hope you're right AltaRed, but I get nervous because everyone (this is pretty unanimous) expects low inflation to continue forever. A counter argument to what you wrote is that printed money always finds a home. It's currently found its home in financial and RE assets, which is a pleasant effect that everyone enjoys. But printed money has a history in showing up in other places as well. Admittedly this has not happened, and I don't necessarily think it will, but it remains a risk.

Did I mention I just bought a long bond the other day for my bond portfolio? I should feel more nervous about doing that kind of thing. But I don't.

I guess it just makes me nervous when everyone in the market has piled into the same trade. Everyone expects low inflation, low interest rates forever. Dividend stocks are desirable, no surprise of higher rates is expected. Everyone knows the central bank rate outlook and forecasts.


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## james4beach (Nov 15, 2012)

PS, remember back in 2005 when inflation and commodities were running hot? Of course you remember it... Alberta was booming.

The story back then was that central banks are printing. Dollars were cheap to borrow, the money did go into commodities. People feared high inflation. The TSX rocketed higher on commodities. Oil was going nuts. Bond yields were quite high, up to 5% on the US 10 year. Inflation expectations were high.

And then... oops! Everyone was wrong. Deflation happened, everything deleveraged, crashed, everyone who bet on inflation got wiped out.

And now... 180... everyone expects low inflation and low interest rates forever. Just like in 2005, everyone is unanimous on it, seems like the obvious way to position yourself.


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## AltaRed (Jun 8, 2009)

The commodities sector was indeed hot and money poured into it. But that was just one sector. Much of the developed (OECD) economy, e.g. transport and manufacturing, was relatively stalled BECAUSE of the high price of input materials. I suspect that was one of the reasons for anemic S&P500 performance in that decade (the dotcom shake out being another). What causes one sector to boom also causes headwinds for other sectors. I didn't see huge gains in the overall global economy....it was relatively centered on resource economies I think.

IIRC, interest rates were not that low, albeit there was a 20+ year steady downward trend https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart


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## Earl (Apr 5, 2016)

KaeJS I think you are doing very well for your age. I've always considered myself fairly successful for my age (considering I've had zero help from family), but at your age my net worth was lower than yours, and I did not become a homeowner until in my early 30s. By what measure do you think you're not doing well? In my opinion, the vast majority of people your age who are doing better than you right now are 1) had significant help from family, or 2) were very lucky in some way (eg invested into bitcoin back in the day).

In my 20s I used to think I would be able to retire in my mid 40s. Now I realize it won't be until my mid 50s. I think when planning for retirement it's important to be malleable rather than make commitments which, if they don't work out, will ruin you. Things don't always work out, and you can't plan for every possible contingency, and that's ok.


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## ian (Jun 18, 2016)

Recently I read a short article on the five steps that one financial expert believes are the keys to financial success. The name of the publication and the author escapes me. It struck me that I (we) and others we know who are financially successful have followed these steps- consciously or unconsciously. 

-Don't spend more than you earn. Never pay credit card interest because you are unable to pay the balance each month.
-Save 10 percent of your income 
-Have a pay raise every year....ie in real terms net of inflation. Get a second income or source of income if you have to
-Only incur Good debt. The examples he/she gave were mortage on your home, post secondary education loan. As opposed to consumer credit.
-Marry well. Marry someone with the same attitude to finances as you.


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## PabloPenguino (Dec 10, 2019)

KaeJS, what's really your end goal? If you just want to hit the $1M mark and continue with your current career, focusing on frugality and career trajectory is likely the best way to get you there. Investing is important too, but saving is really what will continue to build your capital until the power of compounding kicks in. Review your spending and see if there is anywhere you can save. Paying off the PLOC to reduce your interest expense would be one way. Just don't forget to live life while you're at it.

If your goal is to be financially independent so you can step back from your current job, think about what you can do to boost your income. Investment returns will go so far, but if you can find any side hustles or other ways to make passive income, then you can start building a plan to make it happen.


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## james4beach (Nov 15, 2012)

PabloPenguino said:


> Investing is important too, but saving is really what will continue to build your capital until the power of compounding kicks in. Review your spending and see if there is anywhere you can save.


It's actually kind of interesting how little investment returns matter, for a while anyway. Assume it's an aggressive investor with 6% after tax annual return and let's say they can save 40K a year from employment earnings.

With 200K invested, that's only 12K a year in investment gains. The savings are a far bigger factor and the rate of return on investments really doesn't matter much.

At 400K invested, the 24K a year in after tax gains is becoming significant but is still smaller than what they're saving up. Arguably the investor still gets much more "bang for their buck" by having more income and/or saving more aggressively, reducing spending.

Only at around 600K invested, the annual gains are now on par with their annual savings. By 800K, the annual investment gains really matter and are exceeding savings.

To be honest I didn't take my investment returns very seriously until about 300K as it really didn't matter much whether I made 4% or 6% return.


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## ian (Jun 18, 2016)

sags..
Inflated housing and rentals is completely detached from economic reality. Those rise in costs are driven by greed by the developers and builders and landlords.

If this is true how come rents and home prices have been going down in Calgary, Ft. McMurray, etc for the past four years? Perhaps it is really down to supply and demand. If you had a rental property of some sort would you price to your market?


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## My Own Advisor (Sep 24, 2012)

ian said:


> Recently I read a short article on the five steps that one financial expert believes are the keys to financial success. The name of the publication and the author escapes me. It struck me that I (we) and others we know who are financially successful have followed these steps- consciously or unconsciously.
> 
> -Don't spend more than you earn. Never pay credit card interest because you are unable to pay the balance each month.
> -Save 10 percent of your income
> ...


I would largely agree with this....except I would add to avoid lifestyle inflation and try to bank any raise (you may or may not get) from your place of work over your career. In our modern digital economy, definitely encourage folks to have a "side-gig" then can lean on if times get tough and/or you lose your job. Always good to rely on multiple income streams for retirement, why not do it during your career?

Happy 2020 all!


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## AltaRed (Jun 8, 2009)

LOL.....It looks like Sags again shows his lack of economics as regards housing. Besides the very basics of supply vs demand, he and certainly some others do not understand it is the relaxation of qualifying standards such as down payment and amortization, much lower interest rates and dual income families that has driven prices up. Go back to 25% down payments, 8% interest rates, 25 year amortization and using only one income to qualify... and prices would eventually collapse to historical on-trend values. All this easing over the decades is responsible for driving up demand.


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## My Own Advisor (Sep 24, 2012)

@KaeJS,

I think you are doing very well. Keep at it. The market gave us all a huge gift last year with > 20% returns if you were in CDN equities and about 30% returns if you invested in U.S. equities. We might not see that again for another decade or more.

That said, keep investing and saving and investing and saving. It's all you can do at age 29. You'll get ahead. It takes time.

My wife and I had little at age 29. Age 35, approaching millionaire status in combined NW thanks to diligent saving and killing debt.

Now in my mid-40s, combined net worth >$2 M and $3 M could be coming in the coming years.

We did nothing but save, invest and save some more while having good paying jobs. Time invested will do the rest.

You'll find a high savings rate, early in life, actually yields more money later than trying to "catch up" later in life. I suspect if you save that $1,250 per month at 7% avg. return for 25 years, *diligently*, you'll have no problem realizing your $1 M goal.
The math proves it.


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## sags (May 15, 2010)

Homes prices and rents are falling in Calgary because of wages. There are still lots of people who would like to buy a home or rent a nicer place.

The problem is people have lost good paying jobs and have to work for much lower wages or move out. Alberta is a classic example of that scenario.

Although it is quoted that 100,000 people have lost good paying jobs in Alberta, there is still a shortage of low paid labor in the service industries.

The supply is there. The demand is there. Unfortunately the ability to pay isn't there.


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## ian (Jun 18, 2016)

sags...you clearly do not have very much knowledge of the Calgary or Alberta housing market. Could be that rents are down because there are is a high vacancy rate. You only have to drive around and see the for rent signs or the adverts offering rental concessions. Same with new builds. This is supply and demand. People who do not have jobs or realistic job prospects move to other locations. They do not move up the real estate ladder.


There has always been a shortage of lower paid service industry jobs. Good economy or bad. High home prices or depressed home prices.


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## sags (May 15, 2010)

Supply and demand only works in a competitive market. I wouldn't call the Calgary housing and rental markets competitive markets.


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## sags (May 15, 2010)

Anyone who thinks housing and rental prices are driven solely by supply and demand laws are sadly mistaken.

I knew a large scale commercial and retail developer for years. He would buy open farmland, put in the roads, sidewalks and utilities and sell individual lots to builders.

I was with him one day to pick up an aerator for our hockey team fundraising and he said he wanted to take a look at his property where some foundations were under construction.

As we sat there he pointed at the lots on one side of the roadway and said " I sold these lots for $100,000 each.

Then he pointed to the vacant lots on the other side of the roadway and said " I will sell those lots for $130,000 each.

I asked him if his expenses had gone up $30,000 a lot and he laughed. He said "I will sell them for $30,000 more just because I can".


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## ian (Jun 18, 2016)

That is business sags. People get rewarded for taking risks. The price is 130K because of demand.

One of the largest office space developers in Calgary just put many of their properties into receivership. Why? No renters and less income on those that are rented. Renters are negotiating lease reductions in both commercial and residential properties because demand is in the toilet. They made lots of money during the boom years by renting at market rates. Just as they are loosing lots of money now because rents are low as are the occupancy rates. Risk goes both ways, that is why the reward has to be commensurate with the risk dollars at stake.

No different than cars on the lot. If a new vehicle is hot and hard to get say goodbye to discounts. If a new vehicle is a dog and not selling, suddenly the price gets adjusted with incentives, no interest, etc. Then the manufactures ration the hot sellers and make inventory available on condition that they also take some of the dogs. There is a reason why today you can get a very nice discount on a GM or Ford SUV, but not so much on a Toyota, Honda, or Acura product.

If you had a business sags, would you not try to get as much as possible for your product? And do as much as you could to stimulate interest and demand?

The Loblaws that sold you those bagels at a large discount did so because they had too much supply and not enough demand. Add in an approaching best before date and that spells big inventory problem, big discount. Or did you say to Lablaws ..that is not fair, I am taking advantage of you and please charge me full price, not half?


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## peterk (May 16, 2010)

sags said:


> Anyone who thinks housing and rental prices are driven solely by supply and demand laws are sadly mistaken.
> 
> I knew a large scale commercial and retail developer for years. He would buy open farmland, put in the roads, sidewalks and utilities and sell individual lots to builders.
> 
> ...


Ohh now I get it. "Supply And Demand" to some people is an abbreviation for: "you are required to provide the Supply And to meet our Demands"


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## sags (May 15, 2010)

The overarching economic principle of "supply and demand" is valid within a competitive marketplace, but incorporates within it a lot of variables.

My point...perhaps poorly presented is that it isn't as simple a dynamic as we have a house for sale and you need a house to live in. 

There are homes for sale in Calgary (supply) and there are people in Calgary who would like to buy a home (demand).

Many sub-factors drive the economics of housing and it is far more complicated than simple "supply and demand" transactions.

Yes, business is expected to charge whatever markets will bear but it needs to be recognized the concept creates greed within it's confines.

That is not to say it is good, bad or indifferent, but it is a well known side effect of capitalism. Remember the quote...."greed is good."


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## andrewf (Mar 1, 2010)

What makes you think that Calgary is not a competitive market? Are there not a large number of buyers and sellers? Is there a lack of information? 

You can't just throw around terminology like it doesn't mean something.


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## Eclectic12 (Oct 20, 2010)

sags said:


> The overarching economic principle of "supply and demand" is valid within a competitive marketplace, but incorporates within it a lot of variables.
> 
> My point...perhaps poorly presented is that it isn't as simple a dynamic as we have a house for sale and you need a house to live in.
> 
> There are homes for sale in Calgary (supply) and there are people in Calgary who would like to buy a home (demand) ...


So what are you seeing as the dynamics that are taking Calgary away from being a competitive market?

I know lots of people around where I am who would love to buy lots of things (including homes) but a lot of them don't count as demand as they are wishing for it, aren't trying to save up and can't afford it.


Cheers


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## sags (May 15, 2010)

When real estate listings are higher......sales are lower....and prices are falling, it isn't the hallmark of a competitive market.

When increasing numbers of owners are forced to sell due to the inability to continue to maintain their mortgage, that is not a competitive market.

As defaults and bankruptcies rise, it doesn't support a competitive market.When people can wait for lower prices before they buy, it isn't a competitive market.

I would turn the question around. Given prevailing conditions, why would the current Calgary home market be considered a competitive market ?


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## Eclectic12 (Oct 20, 2010)

sags said:


> When real estate listings are higher......sales are lower....and prices are falling, it isn't the hallmark of a competitive market.
> When increasing numbers of owners are forced to sell due to the inability to continue to maintain their mortgage, that is not a competitive market ...


You are describing a buyer's market instead of a non-competitive one.




sags said:


> ... As defaults and bankruptcies rise, it doesn't support a competitive market.When people can wait for lower prices before they buy, it isn't a competitive market.


LOL ... I've had lot of relatives wait to buy for lower prices where no one described it as non-competitive. 
What you are calling a competitive market is a hot or over heated one. 


You've never notice that there are cycles to RE?




sags said:


> I would turn the question around. Given prevailing conditions, why would the current Calgary home market be considered a competitive market ?


There are people selling and buying. The village in NB that is offering lots for a $1 or the NS business that had to throw in the promise of two acres of land to successful, long term hires IMO is more like a non-competitive market.

Or back in the day when immigrating to the west then working the land meant you received it free.


Cheers


*PS*
I take that back about the NB and NS land incentives. Something like a company town where the company controls everything, including RE prices (and possibly prevents buying RE versus renting from the company) is a better example.


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## AltaRed (Jun 8, 2009)

Sags has no concept of economics or of supply vs demand. After all these years, almost anyone should be able to grasp the basics of economics. With the exception of company towns and loss of the industry, the market is ALWAYS competitive, even it if is skewed towards a buyer's vs seller's market for periods of time. Nothing ever says prices shouldn't go up or down, sometimes dramatically! That is the definition of competitiveness!!!

If oil drops to $30/B, that is the competitive (clearing) price. It is obviously a buyer's market until the surplus can be cleared...and that happens by both increasing demand (some) and supply being lost (mostly). The opposite is true with $100 oil. It is absolutely no different in real estate or any other freely marketed product. Sags is getting all mixed up about 'balance' vs 'competitive'. They are not remotely the same things.


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## nathan79 (Feb 21, 2011)

Real estate prices are incredibly sticky... sellers often have irrational expectations and will keep their homes listed at inflated prices for months, or even years. The lack of potential buyers doesn't seem to deter them. The real estate industry has people conditioned to believe that real estate never goes down, so all they have to do is wait for the "right buyer" to come along.

This is not to say that the rules of supply and demand do not apply, but that the market is very slow to adjust to external forces.


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## AltaRed (Jun 8, 2009)

Agreed but it does adjust after a stage of denial. Some people have to move, e.g. corporate transfer, etc. and that sets the tone...eventually.


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## peterk (May 16, 2010)

sags said:


> When real estate listings are higher......sales are lower....and prices are falling, it isn't the hallmark of a competitive market.
> 
> As defaults and bankruptcies rise, it doesn't support a competitive market.When people can wait for lower prices before they buy, it isn't a competitive market.


When prices go up Sags complains.

When prices go down Sags complains...

Sags can't get no satisfaction.


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## sags (May 15, 2010)

_Sags is getting all mixed up about 'balance' vs 'competitive'. They are not remotely the same things. _

The law of supply and demand is only valid in a competitive market. Balance is only one necessary component for a competitive market.

Without balance there cannot be a competitive market. When the balance is restored the competitive market will return.

Housing markets will never be a "perfectly" competitive market because they are never priced the same, even if the homes are identical.

Wheat prices are used as an example of a competitive market because the price is the same to every buyer.


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## nobleea (Oct 11, 2013)

sags said:


> _Sags is getting all mixed up about 'balance' vs 'competitive'. They are not remotely the same things. _
> 
> The law of supply and demand is only valid in a competitive market. Balance is only one necessary component for a competitive market.
> 
> ...


A true free market will always be in balance. There are always the same amount of buyers as sellers. Same in the stock market. There can be a lot more people *wanting to buy* or *wanting to sell*, but it always takes two to complete a sale. You're not a 'buyer' until you actually buy.

I'm not sure what you mean by a competitive market. One could say it's a competitive market for buyers when there are more people who want to buy than people who want to sell (at a given price). Or competitive for sellers when it's vice versa.

Balance does not imply price balance/stability. The amount of buyers and sellers is always in balance, but the price is not.


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## ian (Jun 18, 2016)

It really depends on the market and the price elasticity of the product or service. A stable market does not necessarily imply that the market is in balance or that it is competitive. That is why we have consumer legislation aimed at potential practices of monopolies and oligopolies. At either the manufacture level or the retail level. At the moment there is or recently was an investigation by consumer and corporate into bread price fixing in Canada by some of the large retail grocery chains.

I suspect that a healthy market is one where the the market fluctuates a little between equilibrium. The exception might be new technologies.


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## AltaRed (Jun 8, 2009)

True in select cases, but the attempt here is to try and provide Coles notes insight of Econ101 for Sags' benefit.


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## sags (May 15, 2010)

AltaRed said:


> True in select cases, but the attempt here is to try and provide Coles notes insight of Econ101 for Sags' benefit.


Econ101 is the study of microeconomics. The discussion here involves macroeconomics.


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## CPA Candidate (Dec 15, 2013)

My wife and I save plenty of money because we have good incomes and live in an affordable city, Winnipeg, home of the 2019 Grey Cup Champs.

We receive about $9000 monthly after tax from our jobs.

Our mortgage payment is $850 monthly and we have another loan that is about $500 per month. Daycare is about $1000/month, utilities $200, property tax $280, food $600, car insurance $300, gasoline $200, etc. We save thousands every month without a budget or any real plan to do so, it just happens. We haven't let our lifestyle catch up to our earnings.


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