# 24 yr old - financial snapshot



## redsgomarching (Mar 6, 2016)

hello everyone - firstly, thank you all for sharing your stories and your successes, hardships, and expertise. I am using this to track my goals as i become financially independent. I am a huge fan of moneysense and frugality however have been known to go off the handle some times (still havent touched any savings though!)

I will post my updates biweekly based on my paycheques to keep myself motivated and to keep dat frugal life going. 

About me;
24 yr old
living with parents
love sports + personal finance

education;
hbc graduate with decent average (75+)

job;
big bank as financial advisor (salary around 50k including benefits, esop, bonus)

financial snapshot

Assets;

chequing; 1.2k
vacation account; $300.00
secret 10% (got this idea from kevin o leary, enjoy doing this) 2.6k
regular hsa - 6.8k

registered investments;
tfsa - 47k (currently at a -7% loss on this. I bought index funds in 2015 and suffered quite the loss, this number WAS -16% in jan of this year but has recouped fast, i am not too worried as I have a lot of time).

RRSP 6k (current at a 14% overall gain as of january of this year, purchased a low cost energy, resources and commodities mutual fund and the fund itself holds a 30% gain for me)

ESOP - market value of 6k

Total assets; approx 70k


Liabilities ; 0, i have absolutely no debt.

expenses
My current expenses include;

gas (40-$60 per week depending if i go to visit friends)
life insurance (150$ per month)
cellphone (45$ per month)
groceries (since i dont pay rent) $300 per month (includes supplements)
misc (generally if i go out i am looking at 150-200)

I try to save atleast 60-70% of my paycheques to go into investing or savings while saving for specific items. There are times in which I spend more than I should but I never dip into my savings unless it is a specific use (i.e vacation fund when going out etc).



Now here is another curveball. I am planning on returning back to school in september to pursue the CPA designation (will be in for 1 yr or 2 semesters). I really am not too fond of my current job and have been mismanaged at the bank for almost 2 yrs now. I sucked it up in the hopes of getting into a position that I enjoy but despite great performance it hasnt happened.

I can easily finance this without touching any of my savings (rrsp, esop, tfsa) but I am considering applying for OSAP to fund the cost. 

Since osap is interest free until 6 months after graduation I thought I would use the funds I have saved up to earn a decent amount before paying it back. For example; by the end of tenure I will be at around 16k in liquid cash in which I have been looking at sustainable REITS who pay a good dividend (8%) paid monthly which would generate 1680 +/- any variance in the unit price.


Thank you all for your time and appreciate your feedback.


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## Spudd (Oct 11, 2011)

Why do you have life insurance? That seems very unnecessary (and expensive!!). Also, why don't you have car insurance? 

OSAP is asset-tested, so you may not be able to get as big of a loan as you're hoping. The RRSP is exempt but the TFSA is not. 
https://osap.gov.on.ca/OSAPPortal/en/Help/Definitions/TCONT003080.html


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## redsgomarching (Mar 6, 2016)

Spudd said:


> Why do you have life insurance? That seems very unnecessary (and expensive!!). Also, why don't you have car insurance?
> 
> OSAP is asset-tested, so you may not be able to get as big of a loan as you're hoping. The RRSP is exempt but the TFSA is not.


This is a good point - thanks for bringing it to my attention! Will re-think my plan then. 

As for life insurance - the plan acts as a savings vehicle as well as I am able to "borrow back" from my contributions. My dad set this up for me while I was in university and I have kept it going for that reason.

As for car insurance - parents float this cost as I inherited a very old vehicle from them and pay maintenance costs + repairs.


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## D-ru (Nov 27, 2011)

As with Spudd first thing that came to my head was why life insurance? @$150/month is very expensive for your age, I assume this is whole life and not term but still very expensive. I just got life insurance for the first time since I just had my first child. Quoted on life and term, I decided to do a 20 year term but at 31years old my whole life quote was cheaper then $150. 

Anyways, for a 24 year old I think you are doing very well, I wish I was more serious about this at your age.


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## redsgomarching (Mar 6, 2016)

D-ru said:


> As with Spudd first thing that came to my head was why life insurance? @$150/month is very expensive for your age, I assume this is whole life and not term but still very expensive. I just got life insurance for the first time since I just had my first child. Quoted on life and term, I decided to do a 20 year term but at 31years old my whole life quote was cheaper then $150.
> 
> Anyways, for a 24 year old I think you are doing very well, I wish I was more serious about this at your age.


Thank you for your kind words! I am serious about it now because of what I want to do in the future. Truth be told I would love to work until 1 mill in liquid assets and live off that @ 5-8% dividends/interest for years to come. Just have to get there first 

As for the life insurance - i will ask about the structure of the policy and will post it here to clarify.


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## redsgomarching (Mar 6, 2016)

First update and a little upset at myself. 

Earnings - 1189.29
Expenses - 955.00
Vacation fund - $35
Secret 10%- $100
Remainder into savings 99.29

Nowhere close to my goal of 60% savings rate, however the majority of expenses included a few new shirts and pants and airplane tickets for my vacation in june!

Reward points are awesome - only had to pay $225 for the flights.


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## Saniokca (Sep 5, 2009)

redsgomarching said:


> Since osap is interest free until 6 months after graduation ....


Be careful - it is not "interest free" (I learned it the hard way). They give you a grace period until you have to start the payments but the interest is accumulating (on the "Canada portion").

https://www.ontario.ca/page/pay-back-osap

_When you need to repay
6 months grace period
For the first 6 months after you graduate, finish your studies, or stop being a full-time college or university student:

you don’t need to make any loan payments
no interest is charged on the Ontario portion of your student loan
*interest is charged* on the Canada portion of your student loan
This is called your 6 month grace period.

You start to repay your loan at the end of the 7th month after you leave school._


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## redsgomarching (Mar 6, 2016)

Wow! Thank you for bringing that up - definitely missed that. Either way I don't qualify for OSAP on my TFSA alone aha. 
Will most likely use my bank employee status to get either a low interest rate SLOC or PLOC (can probably get the same interest rate as OSAP).


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## redsgomarching (Mar 6, 2016)

Second update;

alot going on this week- officially purchasing my first investment property. Have talked to the management company, 2 room + den in waterloo. They have a 1850 per month guarentee, however, there is a possibility of increasing the rent to 2100 and collecting 700 per person. I also may decide to live there when I go back to school.

Work situation has been tough and it is becoming more and more likely that I will leave. Reducing my break times, increasing my hours with no time off in lieu or overtime, no pay increase, manager won't even approve my vacation time. how do these people get away with this kind of attitude in the work place? Still am grateful for a job but it shouldn't have to be like this.

Financial picture;
earnings; 1189.29
expenses; 597.18 (includes costs for TFC season tickets, had a payment left - higher than I would have liked)
Vacation fund - $35
Secret 10%- $100
Remainder into savings - 457.10

Savings rate; 49.7%.
Better this week - will only start to shave off more as most of big purchases have gone through.

Looking at starting up a non reg investorline account to invest this 8k I have in a savings account into dividend stocks to give me some side income - thoughts on this?


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## DividendLuvr (Mar 5, 2014)

I'm sorry, but why on earth are you purchasing an investment property, particularly when you are contemplating a change in jobs? You do not have the financial foundation to do that right now.


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## redsgomarching (Mar 6, 2016)

DividendLuvr said:


> I'm sorry, but why on earth are you purchasing an investment property, particularly when you are contemplating a change in jobs? You do not have the financial foundation to do that right now.


The investment property is a joint venture through my family so I will still have the financial backing, the mtg and payments will be in my name. Even when I go back to school I will still be working so I would still be able to maintain the financial responsibilities of said mtg.

20% down has been completed through my savings + gifted funds. The rental income is gaurenteed for the first 2 years by the management company. There is enough financial backing there. 

The mortgage payments on a 30 year amortization, employee rated mtg comes to around $1000 + condo fees are $350. The net is around $500 give or take admin fees.


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## DividendLuvr (Mar 5, 2014)

So, this is entirely predicated on:

1. Subsidization from your family (gifted funds to your downpayment, and the fact that you are not currently paying rent). Not sure if you used your TFSA to fund your downpayment or if your downpayment was simply not captured in your initial post.

2. Low interest rates

As long as you continue to live rent-free with your parents, they have the means to step in should you experience financial challenges (i.e. you are not absorbing 100% of the risk associated with this decision), and interest rates remain low, you will be able to float it. Out of curiosity, have you benchmarked what your overall costs for the investment property would be at a 5% interest rate?

Are you taking on landlord duties, or are your parents going to be doing so?


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## redsgomarching (Mar 6, 2016)

DividendLuvr said:


> So, this is entirely predicated on:
> 
> 1. Subsidization from your family (gifted funds to your downpayment, and the fact that you are not currently paying rent). Not sure if you used your TFSA to fund your downpayment or if your downpayment was simply not captured in your initial post.
> 
> ...


It is a family business - we invest - whether it is stocks, real estate, small businesses.

The down payment came from savings that I had accumulated but did not include in this post as I had paid it to my dad and it was not in my possession.

Interest rates are not going to jump to 5% over night, however, yes I have used calculators etc to see what payments will be like respectively at 2,3,4,5%. 
Even at 5% interest rates the payment still comes to less than 1200$ on the mtg.

My goal is to be out of there and renting to 3 people for a total of 700$ per person (this isn't bad considering it is fully furnished with wifi and cable and utilities included). 

The landlord duties will be a mix of me and my family - it is a family business we are all required to pitch in (also great learning experience for home renos etc)


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## redsgomarching (Mar 6, 2016)

Another biweekly update; received some additional funds for my bday (385).

Total inflow of funds; 1574.28
Expenses (brothers bday gift + mothers day increased this) = 626.72
Vacation - $35
Secret 10% = $100
Remainder into savings = $812.56

Savings rate = 51.61% 
Managed over 50% due to the additional bday funds. Shifted around some funds for additional trading into a non reg (my RRSP is pretty much maxed). Picked up netflix, I think they will have a good earnings report + the recent variance has been around 89-115$ usd. Also with the speculation and likeliness of a US rake hike I think it is useful to have some US funds available. 

Would really love to clean up my TFSA of some of these index funds I have so I can free up some room. Purchased a high yield corporate ETF at my dad's recommendation and I have a big loss on it - don't want to sell it and it generates around 7% yield but it would free up a lot of room to pick up some better positions.


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## My Own Advisor (Sep 24, 2012)

So far, so good reds.

Well done overall at 24 to be focused on personal finance and investing. I wasn't!

I would on the investing side:
1.Focus on filling up your TFSA, max it out, this year and every year for the rest of your working life.
2.After 1, focus on filling up your RRSP, max that account out as well.

Once TFSA and RRSP are maxed, then consider investing via non-reg. account.

What you put inside the TFSA and RRSP is your call, but I think you'll find over time (probably by trial and a few errors):
1. Blue-chip dividend paying stocks are best, and/or
2. Index investing is smart, easy, simple, and very effective.

(i.e., no need for corporate ETFs or chasing anything "high yield"). Be boring as an investor, it works very, very well over time.

Good luck!


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## redsgomarching (Mar 6, 2016)

My Own Advisor said:


> So far, so good reds.
> 
> Well done overall at 24 to be focused on personal finance and investing. I wasn't!
> 
> ...


thank you for your kind words sir - tfsa is completely maxed (i wish they kept the 10k per year contribution room) rrsp is about 80% full due to my ESOP + my own contributions.

I think I am going to be doing that over the long haul run and am going to clean up asap.


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## humble_pie (Jun 7, 2009)

redsgomarching said:


> Purchased a high yield corporate ETF at my dad's recommendation and I have a big loss on it




red won't you please look back over your posts. Almost every one is dad's recommendation, dad bought this for me, i'm investing with my dad, i'm living with the 'rents, i'm co-managing a new real estate investment with the 'rents, etc.

it's possible that one fine day you'll wake up & discover that you're middle-aged or even old but you never had a youth. 

move out! stop the insurance! dump the co-property investment! lose the mother's day gifts! buy a motorcycle or take up sky-diving! go holiday in vietam!


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## OnlyMyOpinion (Sep 1, 2013)

With respect, there are other possibilities. I wouldn't assume OP is not doing exactly what they want. We are only hearing about the financial piece on the Forum. It's not how I did it (I was married and bought a house at age 24), but I am biased by the fact that I still have a daughter at home sl. older than the OP. 
So I'm inclined to see a son & father who appear to get along - a father who has helped his son get established investing and a son who has taken an early interest in his own finances. He lives at home for now and saves a great deal as a result. So he is very likely to reach financial independence at a young age and be able to choose how he lives the latter half of his life (work or not); for now, he can afford that trip to Vietnam (or eastern Europe, Mediterranean, Cuba, Costa Rica in our d's case); he may own a vehicle without being indebted; he will eventually own his own place without jumping in asap and living paycheck to paycheck with associated stress. 
At 24, there is still lots of time to enjoy a life juggling your job, kids, paying bills, shopping, house maintenance, etc.. 
I'm not suggesting all goals and life sb financial, but if you are in good shape financially then your other worldly interests and goals are perhaps more easily achieved and enjoyed?


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## redsgomarching (Mar 6, 2016)

humble_pie said:


> red won't you please look back over your posts. Almost every one is dad's recommendation, dad bought this for me, i'm investing with my dad, i'm living with the 'rents, i'm co-managing a new real estate investment with the 'rents, etc.
> 
> it's possible that one fine day you'll wake up & discover that you're middle-aged or even old but you never had a youth.
> 
> move out! stop the insurance! dump the co-property investment! lose the mother's day gifts! buy a motorcycle or take up sky-diving! go holiday in vietam!


i respectfully disagree. i do everything i want to but i am working hard now so i can enjoy those things with those who are going to be important to me (my own family). 

my first trade was that etf and it was 3 years ago why would I not ask somebody as successful as my dad? after that i took it from there on my own.

it is also possible that you will wake up and wish that you had an integrated family like mine. These days people forget the institution and the strength of family in finance. 

Please do not ever try to give me advice again in this regard.


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## TK.61 (Mar 27, 2012)

redsgomarching said:


> Please do not ever try to give me advice again in this regard.


You did ask for advice and feedback.

Although maybe not fair of Humble Pie to make assumptions about your personal life, it does appear that you're a milking off of your parents and all of your endeavours appear to be using your parents credit or money as a crutch for you. I agree with Humble, You have a full time job, no reason to live with your parents still.


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## redsgomarching (Mar 6, 2016)

TK.61 said:


> You did ask for advice and feedback.
> 
> Although maybe not fair of Humble Pie to make assumptions about your personal life, it does appear that you're a milking off of your parents and all of your endeavours appear to be using your parents credit or money as a crutch for you. I agree with Humble, You have a full time job, no reason to live with your parents still.


And he gave his advice/feedback - the result was my above response and i will gladly offer you the same.


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## BigMonkey (May 31, 2016)

Hi. I was wondering what your secret 10% is used for? 
Is this a place for surprise gifts? Splurging account? #2 girl that girl #1 doesn't know about? lol


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## redsgomarching (Mar 6, 2016)

Hi bigmonkey, my secret 10% is essentially my emergency cash fund. I put 100$ from each of my pay in there (it's abit less than 10% now since my pay increased)


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## redsgomarching (Mar 6, 2016)

Biweekly update (late) 

Had the week off and went to cottage country with friends for the long week + stayed the week. Costed a lot, it was a blast and definitely worth it! Still managed to sock some funds away.

Income after rrsp, tax and other deductions; 1189.35
Spending = 821.11
Savings;
Secret 10% = 100$
Vacation - 35$
Misc savings = 233.17

Overall investment portfolio has seen some great recovery as I had a good feeling on a few rebounds and followed market basics during time of high inflation and market uncertainty (gold, got a good gain on oil rebound). 

Started my non reg investorline and tossed 7.5 grand in there and managed to make 1k USD off of a netflix position. (unfortunately i have no room in tfsa/rrsp for anything else) 

Some news regarding the investment property we got a formal notice today saying the developers were scrapping the project and will be refunding the funds to us! Kind of puts me in a spot because now I have to find a place to live for when i go back make the move to waterloo, on the bright side +15k will be coming back to me in when they process the refunds. Will probably end up using that as rent/school tuition.


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