# How did you grow your networth?



## snowbird (Jun 14, 2012)

What was the game changer? How did you significantly grow your networth? 

I am thinking of going into the RE rental as a means to achieve a step change in networth. Even though i am working hard at increasing savings and investing from employment income, in addition i am looking for other avenues to build wealth, so want to hear your stories on what factor(s) contributed to the most growth of your networth.

Cheers,


----------



## OnlyMyOpinion (Sep 1, 2013)

Savings + Time.

You have assets of $589K. If you can save $12k/yr and grow your assets by a realisitic 4%/yr (call it a real rate of return), you will have just over $1MM when you are 54 (assuming age 40 now).


----------



## tygrus (Mar 13, 2012)

Compounding inflation


----------



## like_to_retire (Oct 9, 2016)

The magic of compounding over time.


----------



## Rusty O'Toole (Feb 1, 2012)

Rental real estate. I bought my first rental property in a no money down deal in 1975. This was before any of the nothing down books and seminars had been published. At the time I had almost no money to invest, just a couple of years of savings from a factory job at $3.25 an hour. I saved up $4500 in 2 years.

The big appeal to real estate was leverage. You can easily buy real estate with 25% down. You can get a CMHC mortgage with 10% down. There are ways to get the 10% down payment and making a no money down deal. No money down doesn't mean the seller gets no money. They get the money, it just doesn't come from your pocket.

But, if you do this, there is a lot of work involved. I did almost all my own renovation and management work because I could not afford to hire it done. Eventually things got easier. Now I am nearly out of real estate and have gone into the stock market. But the capital came from real estate.

To make things a little clearer - if you have $10,000 to invest and you can make 10% in a year, that is a profit of $1000. If you use the $10,000 as a down payment on a $100,000 property and it goes up 10% that is a $10,000 profit or a 100% gain on your $10,000. You don't need too many years of making 50% to 100% or more on your money to amass a fortune.


----------



## AltaRed (Jun 8, 2009)

Methodical and disciplined. Here is how I got to a very comfortable retirement by age 57.

1. Lived well below my means and paid myself first (to pay down debt and then to invest)
2. Never had debt except for student loans (paid off in 3-4 years), and a mortgage (paid off in 16 years with accelerated payments)
3. Hade a good enough time, e.g. vacations and recreation, but did it in a budgeted way.
4. Don't waste money on luxury/designer goods. Mid-range is just as good.
5. Avoid useless leakage like daily Starbucks. Office coffee will do.
6. Rarely bought a new vehicle, or when I did, bought quality mid-range and kept it for 10-15 years.
7. Invested with base hits in mind. Didn't chase stock tips nor high risk too-good-to-be-true returns. Developed a well diversified portfolio of stocks and bonds, and some couch potato indexing, and was patient. As said above, the magic of compounding over time.

The race isn't won in 10-20 years, It is a journey that can show bright light at the end of the tunnel by time one is 50.

Some people here have done well via investment real estate and promote it as their success story. That simply was not a viable option in my day of 10-18% mortgage rates. I am not so sure it is going forward from today either when gutter level interest rates have nowhere to go but up. Debt payments will go up and valuations have to incur headwinds. The easy money has been made. I'd never expose myself to that kind of leverage. Different strokes for different folks. I prefer to be debt free.


----------



## TomB16 (Jun 8, 2014)

snowbird said:


> I am thinking of going into the RE rental as a means to achieve a step change in networth.


If you are one of the 99.9% of people who wants to get into R-E investing and have someone else do all of the manual work, there is a high probability you will lose money.

We made our money with saving, R-E investing, and stock investing. Most of our money has come from R-E investing but it's the weekend and I'm literally at home having lunch between various jobs and projects, trying to get things cleaned up before snow fall.


----------



## Pluto (Sep 12, 2013)

Get an education, then
1.Save money: the three B's. Bike, Bus pass, and Bag lunch. No car. 
2. Stocks.
3. Real estate.


----------



## Just a Guy (Mar 27, 2012)

I managed to luck out and made money in all three ways, owning a business, investing in stocks and investing in real estate. 

None of these were "overnight successes", they all took time, and probably a certain amount of luck. For example, today is a lot harder to find real estate properties which will cash flow than it was when I started. The stock market wasn't at an all time high either. 

I'm not saying it's impossible to find good investments, just a lot harder and the returns will probably not be as high. The biggest mistake people can make is jumping in the market just to get into the market. You need to do a lot of work to ensure you find the right investment, moreso today than at any other time. You won't get real estate to go up by 2-300% anymore, nor can you count on interest rates to stay low (let alone drop). 

The market is always changing, that's why they always say past performance is no indication of future returns.


----------



## snowbird (Jun 14, 2012)

OnlyMyOpinion said:


> Savings + Time.
> 
> You have assets of $589K. If you can save $12k/yr and grow your assets by a realisitic 4%/yr (call it a real rate of return), you will have just over $1MM when you are 54 (assuming age 40 now).


Once the mortgage is paid off in 2 years, i could save $50K/year if i stay at my job and the salary + bonus stay the same. I just feel so restless at the moment, and think i should be doing something else to get ahead (i started this journey late). I don't like the thought of being an employee for another 10 years (but maybe if i changed jobs this could change who knows)


----------



## snowbird (Jun 14, 2012)

Thanks everyone. Seems like Savings + Patience is it.
I already walk/bus/bike everywhere, bring my lunch and invest my savings in stocks. Seems like RE could be the next frontier. I am not looking to be an overnight success and i am a hardworker - i just want to make money smartly - beyond trading my time for a paycheque for the next 10 years.


----------



## humble_pie (Jun 7, 2009)

Pluto said:


> Get an education, then
> 1. Save money: the three B's. Bike, Bus pass, and Bag lunch. No car.
> 2. Stocks.
> 3. Real estate.



this is nifty
the whole world of how-to finance in a haiku



Bike
Bus pass
Bag lunch

^^ would t shirts with this on em sell


.


----------



## crgf1k (Aug 8, 2015)

snowbird said:


> What was the game changer? How did you significantly grow your networth?
> 
> I am thinking of going into the RE rental as a means to achieve a step change in networth. Even though i am working hard at increasing savings and investing from employment income, in addition i am looking for other avenues to build wealth, so want to hear your stories on what factor(s) contributed to the most growth of your networth.
> 
> Cheers,


I've pretty much broken even on all three houses I've owned (or lost money if you include mortgage interest). My stock market investments never did great...largely my fault. The most powerful tool for me is being ultra-frugal and using every spare penny to pay down mortgages fast and then build up investment accounts.


----------



## kcowan (Jul 1, 2010)

RE went up 2432%
JV MURB up 100%
5x10 bagger stocks up 1000%
Only 2 new cars in 50 years, usually 3 years old
Alway wore Timex-priced watches, some bobbles for DW
LBYM always
Fly overseas on points/deals, stay at bnb/vrbo/airbnb
Save 50% of retirement budget by living 5+ months in Mexico and renting out northern place

Now starting to loosen purse strings until next market swoon.


----------



## lonewolf :) (Sep 13, 2016)

spend less then made
put options on SPY & SPX in 08


----------



## milhouse (Nov 16, 2016)

For me it was a bit luck/timing and changing habits. 
We kind of lucked out in buying a place before the housing market exploded in Vancouver in the 2000's. If we delayed our decision by a few years I'm not sure how things would have turned out on the housing front. 
We also kind of lucked out with good jobs and by luck and with some work we were able to grow our salaries and had some interesting opportunities. A lot written out there about early retirement talks about how anyone can do it with a bit of discipline. To state the obvious, it's so much easier if you and your spouse both have good salaries. And I was fortunate to work on some overseas projects that provided an extra bump in earning for a while. 
I'm also fortunate the missus is a saver and that kind of rubbed off on me kind of like having a personal trainer. IMO most of one's wealth in the early days comes from your savings versus investments. So, I think it was pretty key that we early on maxed out on our RRSP's, TFSA's, all of our company's benefits, etc. My only regret is that we didn't throw more at non-registered savings early on and weren't more diversified in US equities.


----------



## ian (Jun 18, 2016)

-real estate. smaller homes in good areas appreciate faster
-never pay cc interest, or have consumer debt
-paid off mortgages as quickly as possible
-lived below our income level
-strong commission income, the very good management performance bonuses
-great stock options exercised in a timely manner
-refused pension buyout, remained in DB plan
-careful/prudent investing, buy when people are selling, sell when people are buying.
-never bothering about keeping up with the Jones' or having two new cars in the driveway


----------



## Pluto (Sep 12, 2013)

snowbird said:


> Thanks everyone. Seems like Savings + Patience is it.
> I already walk/bus/bike everywhere, bring my lunch and invest my savings in stocks. Seems like RE could be the next frontier. I am not looking to be an overnight success and i am a hardworker - i just want to make money smartly - beyond trading my time for a paycheque for the next 10 years.


RE the next frontier. good idea to explore since you have 2 years of payments on your mortgage left - meaning a decent amount of equity. If the structure of the house allows it, a basement suit rental can help. Houses are a great thing to have as you can get loans for investment with the house as colateral.


----------



## Koogie (Dec 15, 2014)

Raised in a frugal farming household. Kept that mentality all my life and, most importantly, got a spouse with the same attitude.

Made 90% of NW from my own small business. 10% came from conservative investing. Semi retired at 42.


----------



## bds (Aug 13, 2013)

"The easiest way to earn money is to not spend it" I heard somewhere years ago. I do that. No cable, cheap phone plan, always owned older used cars that I can fix myself. I rent the upstairs of my house out and live in the basement that I renovated myself.

5 years ago I had a string of bad landlords so I bought a house because I was tired of dealing with their poor management, It was a cheap house that with all expenses considered cost me $400/mo more than the rent at my terrible apartment. I lucked out and I recently sold that house for 180k more than I paid after 4 years and putting about 40k into it. That definitely helped, thank you crazy real estate market. I don't think any stories like that will happen in the near future now though.

I've been looking to purchase a rental property for a while now but haven't found anything that is worth while. The vast majority are losing money just from the adding up the numbers in the MLS ad! It's kind of amazing how awful the prospects are out there right now.

Besides that, investing mostly in stocks. The most success I've had has been with the thing everyone preaches here, large Canadian dividend growers.


----------



## james4beach (Nov 15, 2012)

The money diaries can be a good place to look, to see how others are increasing their net worth. One particularly impressive one is:
http://canadianmoneyforum.com/showthread.php/31537-No-plan-survives-contact-with-the-enemy

Sm5 increased their net worth from 94 K to 445 K in under 3 years!


----------



## 1980z28 (Mar 4, 2010)

Purchased real estate and index invested


----------



## Italicum (Feb 10, 2017)

snowbird said:


> What was the game changer? How did you significantly grow your networth?
> 
> I am thinking of going into the RE rental as a means to achieve a step change in networth. Even though i am working hard at increasing savings and investing from employment income, in addition i am looking for other avenues to build wealth, so want to hear your stories on what factor(s) contributed to the most growth of your networth.
> 
> Cheers,


 - Patient, relatively cautious (i.e. Not much leverage, as i have an aversion to debt) in RE and the stock market (mainly in blue chip dividend payers)

- self employment and related tax advantages

- unquantifiable amount of luck

- heavily invested in my own education 

- always lived below my means (which still translated into a very comfortable and fairly expensive lifestyle)

I would say that, of all factors, the last two have been by far the most important.


----------



## ian (Jun 18, 2016)

The real game changers for me were thinking out of the box, not doing what others were doing or what they thought was best because it was expected. Seeing an opportunity is one thing, being willing to act on it and move forward is quite another.

Next was having a partner that was willing to share in the adventure and be supportive of all my crazy decisions, moves/transfers, travels, etc.


----------



## Just a Guy (Mar 27, 2012)

The one thing to remember is to not listen to others, especially those who've never done something similar. I remember when I purchased my first rental, I ran the numbers and saw there was no way I could lose money on the deal, yet friends and family all thought I was nuts. 

I remember a similar reaction when I talked about buying my first stock. It was a company that wasn't too popular and not doing well at the time.

Of course, years later, the same people wondered what happened with my purchases, but I'd learned not to talk much about it by then. They remember me mentioning my purchases, and know things went well afterwards, but I don't need to gloat and they still think investing is "too risky".


----------



## TomB16 (Jun 8, 2014)

Just a Guy said:


> .... I'd learned not to talk much about it by then.


Keeping your mouth shut is one of the keys to success, IMO.

When asked how you're doing, you should always grumble and pretend you're just about to go under. lol!


----------



## TomB16 (Jun 8, 2014)

Italicum said:


> - Patient, relatively cautious (i.e. Not much leverage, as i have an aversion to debt) in RE and the stock market (mainly in blue chip dividend payers)


I haven't figured out how to make a reasonable return with no debt in R-E investing. It would be wonderful if you were to share it with us, one day.


----------



## GreatLaker (Mar 23, 2014)

TomB16 said:


> Keeping your mouth shut is one of the keys to success, IMO.
> 
> When asked how you're doing, you should always grumble and pretend you're just about to go under. lol!


^^^ 

That worked for me in university and it still works for me today.

When my friend boasts about the great financial adviser that calls him a couple of time a month with great investment opportunities and meets with him 4 times a year I smile subtly and try to look impressed. Then I say something perplexingly witty like "the broker you have, the broker you get".

When the nice lady at the bank asks if I would like to meet with one of their advisers I say I do my own investing so if I need investment advice I just talk to myself... It makes scheduling a lot easier. That usually silences them. eaceful:


----------



## olivaw (Nov 21, 2010)

i know nothing about real estate and very little about stocks. I saved like crazy and invested in index ETFs using a couch potatoes allocation model. Returns were great between 2009 and 2014 but my saving rate was the key to my ability to retire at 56.


----------



## Italicum (Feb 10, 2017)

TomB16 said:


> I haven't figured out how to make a reasonable return with no debt in R-E investing. It would be wonderful if you were to share it with us, one day.


I don’t have much wisdom to share on the subject of RE investing, really. What I meant is that I was ‘sequential’ in my approach: I would expose myself to only one mortgage at a time (including the initial one on my residence), although my income could have supported more than one, even if the cash flow on the (rental) property was negative. It allowed for more accurate planning (fewer moving parts), monitoring and balancing of the % ratio of RE vs stocks vs bonds/GIC assets and let me sleep well at night. It does have to be the 'right' way of doing things for everyone but it worked for me.

If there is a suggestion I may make, it is this: be aware (perhaps you are already) and monitor the mental processes at play in investing. The ‘grasping’ at a desired investment (RE or otherwise), the ‘wanting’, the restlessness and even anxiety that can derive from investing. These mental states are not worth the money, in my view.


----------



## Italicum (Feb 10, 2017)

It does NOT have to be the 'right' way ......


----------



## mars (Mar 11, 2014)

I took advantage of all opportunities at the various work places. A couple of examples, my first full time job was with Coca-Cola. Back then it is Coke Canada and had their own stocks listed on the TSX. As an employee I could buy 10% of my pay cheque in shares each month and the company would match 50% of the first 6% so basically a free 3% in shares in my account. At one point the shares were trading at about $2 per share so I was collecting some nice shares back then, wish I was making a higher salary so it could have been more. Anyway, as it turned out, after 5 years working and buying into the share program Coke Canada was bought out by a US bottler for over $24 per share. 

Other opportunities were RRSP matching programs, pension matching, etc. A lot of the companies I worked for had various matching programs or share purchase programs. In every case where the company was giving me extra money for contributing to my savings I took advantage. When I finally left each company it was amazing how much I had accumulated. The other thing that happened was more luck in timing. One of my last jobs I had been with the company for 11 years and had built up a decent pension with the company, when I left interest rates were almost at the bottom so I commuted my defined benefit pension over to a LIRA. For those that may not know, when calculating the amount of cash to give you now versus a payout later from a defined benefit pension, the interest rate pays a big part of the calculation. It meant the company had to pay out a higher amount of cash because of the low interest rate. I was then able to take that money and invest it myself at better rates of return.

I also bought my house in Toronto about 5 years before housing prices started to take off so I am sitting on a significant gain in my house at the moment. Just need to crystalize the gain by selling.


----------



## kcowan (Jul 1, 2010)

Funny how I tend to forget the company stock plan. 10% into stock at 15% below price struck on July first each year. Plus a DBP. Only sold stock to finance major purchases. Still hold a bunch.


----------



## pwm (Jan 19, 2012)

AltaRed said:


> Methodical and disciplined. Here is how I got to a very comfortable retirement by age 57.
> 
> 1. Lived well below my means and paid myself first (to pay down debt and then to invest)
> 2. Never had debt except for student loans (paid off in 3-4 years), and a mortgage (paid off in 16 years with accelerated payments)
> ...


Everything AltaRed said above, plus one major additional thing. My company stock purchase plan. The company paid $1 for every 2$ I put in. 5% of my salary plus re-invested dividends over 15 years plus the stock price went up hugely. Ended up with ~ $500k in stock. The dividend is more than my pension. I quit at 55.


----------



## james4beach (Nov 15, 2012)

Nice responses but I feel like people are glossing over two big factors: a high income, or a generous pension.

Over the years of reading personal stories and money diaries on this forum, I've seen that the people who are well off (and have growth their net worths) are all very high income earners, or perhaps had modest income plus a giant pension, which amounts to the same thing in terms of total compensation. Sometimes people accomplish the "high income" with a dual income household where spouses have moderate incomes.

But what I have never seen is a single income earner with a low or moderate income (say 50K with no pension) grow their net worth significantly just through living below their means.

Unfortunately for everyone under 40, pensions are now mostly a thing of the past. And if you're under 30, just finding a steady job that pays a decent annual salary is very tough. Many people today would love to have even 50K annual salary in a full time job. Younger people can't be too hard on themselves for trying but failing to match the wealth accumulation of the baby boomers. It's going to be _very_ tough today.


----------



## Eaglyeye (Mar 21, 2017)

james4beach said:


> Nice responses but I feel like people are glossing over two big factors: a high income, or a generous pension.
> 
> Over the years of reading personal stories and money diaries on this forum, I've seen that the people who are well off (and have growth their net worths) are all very high income earners, or perhaps had modest income plus a giant pension, which amounts to the same thing in terms of total compensation. Sometimes people accomplish the "high income" with a dual income household where spouses have moderate incomes.
> 
> ...


+1


----------



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

james4beach said:


> ....Unfortunately for everyone under 40, pensions are now mostly a thing of the past. And if you're under 30, just finding a steady job that pays a decent annual salary is very tough. Many people today would love to have even 50K annual salary in a full time job. Younger people can't be too hard on themselves for trying but failing to match the wealth accumulation of the baby boomers. It's going to be _very_ tough today.


Its sad to say this but I see the young generation banking on heritages.....


----------



## DollaWine (Aug 4, 2015)

Mortgage u/w said:


> Its sad to say this but I see the young generation banking on heritages.....


Pretty much. We make $35k-$45k coming out of college and even starter CONDO townhouses in the GTA are $500k+. Even if we graduate debt-free, we still feel like we're starting our adult lives trying to climb out of a hole..... Parents are talking about how much money they can give to their kids as downpayment, or buying rental properties with plans to pass them to their kids when they're old enough to live in them.

Many will be forced to leave. Toronto simply will not be affordable for many people.


----------



## milhouse (Nov 16, 2016)

james4beach said:


> Nice responses but I feel like people are glossing over two big factors: a high income, or a generous pension.
> 
> Over the years of reading personal stories and money diaries on this forum, I've seen that the people who are well off (and have growth their net worths) are all very high income earners, or perhaps had modest income plus a giant pension, which amounts to the same thing in terms of total compensation. Sometimes people accomplish the "high income" with a dual income household where spouses have moderate incomes.


I kind of touched on that! 



milhouse said:


> For me it was a bit luck/timing and changing habits. <snip>
> We also kind of lucked out with good jobs and by luck and with some work we were able to grow our salaries and had some interesting opportunities. A lot written out there about early retirement talks about how anyone can do it with a bit of discipline. To state the obvious, it's so much easier if you and your spouse both have good salaries. And I was fortunate to work on some overseas projects that provided an extra bump in earning for a while.


Reading though a lot of FIRE type blogs, particularly those retiring in their 30's, a lot of the authors seem to have dual really high income paying jobs. That obviously helps a lot. However, they also had A LOT of spending, savings, and investment discipline. [Justin from Root of Good is kind of an exception. They made average salary with a couple of somewhat high years but nothing I'd call huge money.] 

IMO... On the income side, I'd call it luck or making your own luck. The savings and spend side other half of the equation is more about discipline.


----------



## Koogie (Dec 15, 2014)

DollaWine said:


> Pretty much. We make $35k-$45k coming out of college and even starter CONDO townhouses in the GTA are $500k+. Even if we graduate debt-free, we still feel like we're starting our adult lives trying to climb out of a hole..... Parents are talking about how much money they can give to their kids as downpayment, or buying rental properties with plans to pass them to their kids when they're old enough to live in them.
> Many will be forced to leave. Toronto simply will not be affordable for many people.


FFS... If you are just coming out of college MAYBE you shouldn't be thinking about buying a house ? Why do kids these days have to have/deserve everything right away ? I was out of school 8 years before I had saved up a downpayment. And inflation adjusted I was making a damn sight less than 40K.


----------



## hboy54 (Sep 16, 2016)

So I guess James et al consider high income to be a single teacher salary of ~$85K average over the past 15 years. And when I worked, with 3 years over $50K, I was high income. Personally I think high income would be much larger numbers.

Hboy54


----------



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

Koogie said:


> FFS... If you are just coming out of college MAYBE you shouldn't be thinking about buying a house ? Why do kids these days have to have/deserve everything right away ? I was out of school 8 years before I had saved up a downpayment. And inflation adjusted I was making a damn sight less than 40K.


I think the point was that shelter payments in general are very high. Even if you don't make mortgage payments straight out of college, there is a good chance you are paying rent.

For what its worth, I think its important strong family values are instilled from a young age and encouraged to live with mom and dad for as long as you can. The goal is to save up enough money before you grow your own wings to fly.


----------



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

hboy54 said:


> So I guess James et al consider high income to be a single teacher salary of ~$85K average over the past 15 years. And when I worked, with 3 years over $50K, I was high income. Personally I think high income would be much larger numbers.
> 
> Hboy54


$85k is indeed a high income if you were to consider that the Canadian combined family income average is in the low $70ks. Think about it......


----------



## AltaRed (Jun 8, 2009)

DollaWine said:


> Pretty much. We make $35k-$45k coming out of college and even starter CONDO townhouses in the GTA are $500k+. Even if we graduate debt-free, we still feel like we're starting our adult lives trying to climb out of a hole..... Parents are talking about how much money they can give to their kids as downpayment, or buying rental properties with plans to pass them to their kids when they're old enough to live in them.
> 
> Many will be forced to leave. Toronto simply will not be affordable for many people.


That is not out of line with what I faced in 1971. A good starting salary of $7650/year when very basic duplexes were about $40k in Oakville and beyond. I know by the time I could pay off the bulk of my student debt and save the slimmest of down payments in late 1974, the best I could do was to buy an el cheapo duplex in Burlington for $49k with a double digit mortgage interest rate as well. Things are NOT different as Koogie says. There are unreasonable expectations today. Young grads think they should have a newish car, the latest smartphone, maybe a place to buy, plus a week in the sun in winter within a year or two of graduating.


----------



## hboy54 (Sep 16, 2016)

Mortgage u/w said:


> $85k is indeed a high income if you were to consider that the Canadian combined family income average is in the low $70ks. Think about it......


I thought the context of high income here was you know $200,000 or thereabouts.

Ok let's assume that $85K single income makes it easy to have a $3M family net worth, in essence it is the dominant factor.

First we need to derate this by about $5K to account for the extra income taxes single earner pays vs two at half $85K each. So we are comparing low $70s say 72 to 80. Are you really prepared to say this marginal $8K is the leading reason why we have a what we do and some impoverished family at $72K has such a hard time and has close to nil? Frankly I can think of of 4 or 5 factors that would rank higher than this 8K, but maybe it is just me.

The other question I would have is where are the millions of millionaire families with incomes over ours that should exist given we are about top 10% net worth but only top say 40% for income?

I guess you and others are free to conclude that we have high net worth due to our advantage of high income, but then I am free to think you are delusional.

Hboy54


----------



## olivaw (Nov 21, 2010)

To James, point, I was unable to save a substantial amount in my 20s and 30s. Most of my retirement savings were accumulated after I reached the age of 40. In fact, 80% came during my final decade of work.

ETA: I do not advocate putting off retirement savings forever but the reality is that young people are paid far less than older workers. Add in the rent or mortgage payments, children, ongoing education and other costs and it becomes almost impossible to live below ones means.


----------



## AltaRed (Jun 8, 2009)

olivaw said:


> To James, point, I was unable to save a substantial amount in my 20s and 30s. Most of my retirement savings were accumulated after I reached the age of 40. In fact, 80% came during my final decade of work.
> 
> ETA: I do not advocate putting off retirement savings forever but the reality is that young people are paid far less than older workers. Add in the rent or mortgage payments, children, ongoing education and other costs and it becomes almost impossible to live below ones means.


Fair enough. Other than an employer sponsored and contributor to an employee savings plan, I didn't really start investing*until I was 40 and had the mortgage paid off. Course there was an incentive to do so in the days of double digit interest rates. I think the majority of us did most of our saving and investing between 40 and 60....or perhaps better said, the last 10-15 years of employment. A lot of young people today will likely fall into similar scenarios.

* But what I did to was avoid any kind of debt other than mortgage debt AND save enough each year between 1975 and 1990 to pay down principal each year to bring down amortization.


----------



## DollaWine (Aug 4, 2015)

AltaRed said:


> That is not out of line with what I faced in 1971. A good starting salary of $7650/year when very basic duplexes were about $40k in Oakville and beyond. I know by the time I could pay off the bulk of my student debt and save the slimmest of down payments in late 1974, the best I could do was to buy an el cheapo duplex in Burlington for $49k with a double digit mortgage interest rate as well. Things are NOT different as Koogie says. There are unreasonable expectations today. Young grads think they should have a newish car, the latest smartphone, maybe a place to buy, plus a week in the sun in winter within a year or two of graduating.


Very true. We (millennials) are more entitled than previous generations, that's for sure.


----------



## redsgomarching (Mar 6, 2016)

DollaWine said:


> Very true. We (millennials) are more entitled than previous generations, that's for sure.


I disagree. The same was said about our parent's generation by their parents yet they were able to walk into a high paying job with any useless degree at the age of 25+ and some are now earning inflated salaries while penny pinching and truly creating a mess for us to clean up. Their "money now, consequences later" mentality has truly showed such a lack of forward thinking in many businesses who are now backtracking to try to maintain sustainability.


----------



## Beaver101 (Nov 14, 2011)

^ I can't believe with your statement above but partly though. As for "their money now, consequences later" part ... look at it this way, this means you get a multi-millionaire $ inheritance.


----------



## redsgomarching (Mar 6, 2016)

Beaver101 said:


> ^ I can't believe with your statement above but partly though. As for "their money now, consequences later" part ... look at it this way, this means you get a multi-millionaire $ inheritance.


While this is true, I want to be able to build something for myself as well. I still need work so I can also set my future kids up for success and have a network that can help them as well. I can careless about money - i want to spend my time doing something meaningful which also includes work.


----------



## My Own Advisor (Sep 24, 2012)

AltaRed said:


> Methodical and disciplined. Here is how I got to a very comfortable retirement by age 57.
> 
> 1. Lived well below my means and paid myself first (to pay down debt and then to invest)
> 2. Never had debt except for student loans (paid off in 3-4 years), and a mortgage (paid off in 16 years with accelerated payments)
> ...


Impressive. +1. 

Need to post my response but a fan of your methods.


----------



## My Own Advisor (Sep 24, 2012)

1) Real estate. 75% = own a decent home. See #3.
2) Never carried CC debt/interest.
3) Working on killing mortgage.
4) Slow and steady dividend investing. Index invest 50% of assets otherwise.
5) We don't compare ourselves to others.
6) Lucky to have workplace pensions.
7) Spend less than you earn.
8) Always save and invest at least 10% of net income.
9) Invest in ourselves...i.e., education.
10) Forget fancy new cars.


----------



## Beaver101 (Nov 14, 2011)

redsgomarching said:


> While this is true, I want to be able to build something for myself as well. I* still need work so I can also set my future kids up for success and have a network that can help them as well*. I can careless about money - i want to spend my time doing something meaningful which also includes work.


 ... that's kind of contradictory. And all the way back to your post #49.


----------



## Mukhang pera (Feb 26, 2016)

AltaRed said:


> Methodical and disciplined. Here is how I got to a very comfortable retirement by age 57.
> 
> 1. Lived well below my means and paid myself first (to pay down debt and then to invest)
> 2. Never had debt except for student loans (paid off in 3-4 years), and a mortgage (paid off in 16 years with accelerated payments)
> ...


Put me down also as a fan of AR’s methods, although #7 is beyond my ken. I have only marginal stock market experience because I was kinda’ mistrustful of the whole thing and felt I had minimal control. The exception to that was a few years in the early 80s when I got hooked up with a prospector/geologist, a CA, a mining engineer and a guy who was a Howe Street promoter type. We did well for a few years forming private companies, vending mineral claims into them, taking them public on the VSE and getting bought out by someone who wanted a ready-formed public company. The point here is it's not a bad idea to take some flyers when young. If it does not work out, you have time to recover.



AltaRed said:


> Some people here have done well via investment real estate and promote it as their success story. That simply was not a viable option in my day of 10-18% mortgage rates. I am not so sure it is going forward from today either when gutter level interest rates have nowhere to go but up. Debt payments will go up and valuations have to incur headwinds. The easy money has been made. I'd never expose myself to that kind of leverage. Different strokes for different folks. I prefer to be debt free.


I find myself in respectful disagreement with the above quote. Making money in RE was very much a viable option in the days of 10-18% mortgage rates. It was some of the best of times, not the worst of times. Elsewhere I have related here on cmf how I bought a Vancouver house in 1979 for $110,000. I was happy to assume a B of M first mortgage, with 3.5 years left of a 5-year term at what was then an excellent rate of 10.75%. Within a couple of years, houses like it were selling for about $275,000. But then the prime rate went to 22.75% and and market "crashed". That $275,000 house was now a $140,000 house. Interest rates slowly subsided to about 11% or so and Vancouver prices recovered. Boy, did they ever! We sold our $110,000 house in 1989 for $525,000 - almost a 5-fold increase in only 10 years. Years of record high interest rates.

The last time I sold a house in Vancouver was in 1998, the price being just shy of $700,000. If the BC assessment value is any guide, that house is now worth about $3.2 million. That's roughly a 4-fold increase, but it's taken nigh on 20 years of near-zero interest rates to get there.

Snowbird has asked what was, for individuals, the game changer. For me, for sure, it was Vancouver real estate. It might see a decline in value in the near term. I don't know. I know it will continue to go in cycles, as it has since time immemorial. I am not convinced that the tenderloin has forever been cut out of it and it's a lost cause buying in. I know the west coast of Canada and the U.S. fairly well. I remain bullish on what might be called the west coast pacific rim gateway cities, which would include Vancouver, Seattle, Portland, San Franciso, Los Angeles and San Diego. I might not buy back my last-sold Vancouver house today at $3.2 million, but I probably would at $2.5 million. While that price seems a tad inflationary, my guess is that it will sound cheap 20 years from now. 

Snowbird mentioned real estate in particular and I would encourage that as an investment. But not just any real estate. I favour the west coast gateway cities because that's what I know. There are many other good choices, I am sure. There are also a lot more bad choices than good ones. Sometime around 1930, my grandparents purchased 2 lots close by the Welland Canal, in the belief that the canal would bring commerce and much activity to the area and the lots would eventually sell for a profit. They paid $320 for two lots. About 50 years later, the local government expropriated those lots for a park expansion. My grandfather was no longer around by then. After holding the lots and paying taxes on them for 50 years, my granny got back what was said to be the appraised value of $320. Not a stellar investment. So I would say stick with the established performers - Toronto yes; Welland no.


----------



## Benting (Dec 21, 2016)

My Own Advisor said:


> 1) Real estate. 75% = own a decent home. See #3.
> 2) Never carried CC debt/interest.
> 3) Working on killing mortgage.
> 4) Slow and steady dividend investing. Index invest 50% of assets otherwise.
> ...


Education, should be top on the list ! Constant upgrade yourself ! Make sure you would be one of the highest paid worker in your field. If you do not make much in the beginning, you won't be able to save much either. I always take one or two evening job related classes to upgrade myself almost every working year. Monday to Thursday evening were dedicated to work related study, nothing else. Only Friday evening and weekends reserved for family. Always go to user group meeting and trade shows to get any info that can help my career. 

Second thing that help me is my investment ( I know all of you experts out there would think I am crazy ! ) Well, I am 'Crazy', about money but do not have time and interest to educated myself with all these investment strategies. Also I am cheap, do not want to paid anybody to invest for me. I looked the holdings of the most common equity funds. Just about 99% of the funds has banks. Why should I pay people to buy them for me that I can buy them myself. Other thing I know is I had a secured job. Do not need to cash in my investment for at least 20 years. With only 3 months + vacation money in saving. Invested the rest in blue chip stocks (70% min in TD and RY), no bond, gic and no MF or ETF also. And, of course adding more of the same every working year. Did not need to spend time to balance the portfolio. It turned out to be OK. These 2 stocks grew to 90% of my investment before I retired more than 10 years ago. I am doing ok with OAS, CPP even without DB pension right now. Last I checked, without counting my house, my asset has actually grown a lot more than the inflation despite the need of supplement the yearly expense by cashing in dividend and sell some stocks (due to the RIF withdrawal rule) !

Just to let you know, right now my investment is 100% with these 2 stocks........


----------



## james4beach (Nov 15, 2012)

Mortgage u/w said:


> $85k is indeed a high income if you were to consider that the Canadian combined family income average is in the low $70ks. Think about it......


And the median individual income in Canada is just 28 K.

Yeah, I'd say 85 K is high income.

A random anecdote. A friend of mine came over last night for an early Thanksgiving. She has worked as a retail store manager for over 10 years and makes around 50 K. She owns a house, but has a big mortgage. She really has problems making ends meet because a couple major home repairs popped up. She tells me that every time a surprise expense comes up, she has to go deeper into debt. She's not able to pay off any of that mortgage. She recently got a roommate in her house to help with the finances.

At times, money is so tight that she has to cut back on food. She jokes that it might be "rice and beans" soon again for her. (It's not really a joke)

Many people have these kinds of incomes. 50 K is barely enough to get by with and yet median individual Canadian income is way lower. After tax you have barely 39 K. This city has a high cost of living and I spend about 35 K a year despite being quite frugal, and I don't have a house or car. With a house + car + repair expenses, you can see the math ... *50 K gross income is barely a living wage*.

This kind of situation is very common in the real world. People who've steadily worked for decades and yet barely make enough to get by. Saving up any money and growing their net worth is a total fantasy -- frankly it will never happen.

On this Thanksgiving, I am reflecting on how lucky I am to have a decent income, and how it's a rare privilege in this country (whether Canada or US) to actually make enough money to survive + save for the future. I also recognize that it can all disappear in an instant. Just a little bit of a misfortune or catastrophe can ruin all your finances and plunge you into poverty.


----------



## hboy54 (Sep 16, 2016)

I was a low so single income earner all those years ago. Stock boy and cashier all the way up to shipper/receiver in a drug store at age 18, 19. Its quite unfortunate that I didn't have a James around at the time to tell me my finances would be permanently miserable. I could have remained poor as was my manifest destiny.

Really no way to win here. It all reminds me of "If you think you can or you think you can't, you're right!".

Hboy54


----------



## ian (Jun 18, 2016)

By far the biggest contributors to our net worth/early retirement have been employee stock options (wonderful tax treatment), over achievement bonuses, and sales commissions....... in that order. Turning down a pension buyout/conversion and remaining in a grandfathered DB plan was the icing on the cake.

It is also very important in growing net worth to focus on what you keep to the same extent that you focus on what you make. I learned early on in the market that the old adage 'pigs get slaughtered' is very true. Set a goal, make your number, get out, and move on to something else.


----------



## james4beach (Nov 15, 2012)

hboy54 said:


> I was a low so single income earner all those years ago. Stock boy and cashier all the way up to shipper/receiver in a drug store at age 18, 19. Its quite unfortunate that I didn't have a James around at the time to tell me my finances would be permanently miserable. I could have remained poor as was my manifest destiny.


Sorry about that, my post was unnecessarily bleak.

Did your income rise over the years? Do you have any tips on increasing the income (and I really will pass this on to my friend). She has looked for other jobs but can't find anything that pays her more than 50 K. She's in her late 30s.


----------



## pwm (Jan 19, 2012)

Yes, J4B has been a little bleak lately. Both my adult children in their mid forties are doing very well on ~ $55k annual income. The thing is that each of them has a spouse that also works, so the "family" income is >$100k. My son has a paid for house, maxed out RRSPs and TFSAs. My daughter has her mortgage almost paid off.

I suppose that re-enforces a fact I have always believed, which is that a stable, long term marriage is a huge contributor to building wealth and achieving financial freedom. Divorce, on the other hand will always have the opposite effect.


----------



## ian (Jun 18, 2016)

Absolutely agree with you about a long term, stable marriage. My spouse took care of many issues in our lives while I was working long hours, and travelling on business. 

In many ways she was a very positive enabler. And certainly my best career moves would not have been possible without her complete support.


----------



## tavogl (Oct 1, 2014)

100k household might be good enough in some places of the country, and at your mid 40's you've already had your biggest expenses (bought a home, had kids and paid for daycare, etc...) but in other areas of the country 100k is not enough to live comfortably, have kids and pay the mortgage, not even mention save for a downpayment.

I was reading a few days ago an article where household income in Port Coquitlam (1 hour away from Vancouver) needs to be 150k a year to buy an average home in the area. Which works out exactly to be my situation, we could not afford a condo in the area until our incomes got to 150k (and believe me, this is not an ideal area).

Daycare alone is about 1200 a month!

Housing AND rent are increasing steadily year over year, making this really difficult for young couples with what you call "high incomes" if you are not asking mommy and daddy for downpayment money, help with the kids and to pay for your schooling. Its almost impossible to achieve a comfortable life with 50k if you are starting from scratch, with no help.

Reality is, 75k in Vancouver and its suburbs is not a high income, I call high income 200k+.


----------



## AltaRed (Jun 8, 2009)

That is why a lot of young families and professionals are leaving the Lower Mainland for the interior where builders, specifically in the central okanagan, cannot keep up with the demand. Lots of tech jobs, etc. moving here and $100k works just fine.


----------



## james4beach (Nov 15, 2012)

pwm said:


> Yes, J4B has been a little bleak lately. Both my adult children in their mid forties are doing very well on ~ $55k annual income. The thing is that each of them has a spouse that also works, so the "family" income is >$100k. My son has a paid for house, maxed out RRSPs and TFSAs. My daughter has her mortgage almost paid off.


That's good to hear. And as others have pointed out, the city makes a big difference. Where I live, a person can't get by on 50k annual income, but in other cities you can.

Dual incomes are a huge benefit, yes. It completely changes the equation, so I think any talk of "how much income is enough" must be explicit about whether we're talking about a single income or total household income.

The median individual income in Canada is only 28k


----------



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

I think its time society needs to get real again. There's a clear disconnect somewhere. The median income is really not in proportion with the median housing price. Just looking at this stat http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil130a-eng.htm makes one wonder how anyone can survive.

Yet, when I look around, everyone is living large; the big house, fancy cars (which you need to change every 3 years or people might think you're a low class citizen), the vacations, clothes, watches, shoes, gadgets, you name it. Its sad that the banks make it all too accessible. People don't know better. All they see is $xxx.99 so it must be a good deal which they think they can afford - the neighbor does so why can't they? Reality is we need to re-educate society and go back to basics. Its ok to drive an old beater. Its ok to wear last year's jacket. Its ok to skip a vacation. 

Wealth is built 1 dollar at a time - no matter how much you make.


----------



## bgc_fan (Apr 5, 2009)

Just an observation. I count at least 3 people who point out employee stock purchase plans or options as a portion of their wealth. Some would say that you are not diversifying and taking a risk but it worked out for these people.
Obviously, it doesn't always work out, e.g. Nortel.


----------



## AltaRed (Jun 8, 2009)

bgc_fan said:


> Just an observation. I count at least 3 people who point out employee stock purchase plans or options as a portion of their wealth. Some would say that you are not diversifying and taking a risk but it worked out for these people.
> Obviously, it doesn't always work out, e.g. Nortel.


I worked for a large blue chip multi-national and even I exercised and sold most of my stock options on a fairly methodical basis over a number of years to keep the amount of 'double jeopardy' lower than it might have otherwise been. One simply does not know what the future brings. Sure I left something on the table (capital appreciation of company stock) but I leveraged the proceeds into other investments which also provided me with a reasonable return. Key message: Don't fall in love with your employer's stock. It's no different/better/worse than a plethora of other stocks out there.


----------



## hboy54 (Sep 16, 2016)

james4beach said:


> Sorry about that, my post was unnecessarily bleak.
> 
> Did your income rise over the years? Do you have any tips on increasing the income (and I really will pass this on to my friend). She has looked for other jobs but can't find anything that pays her more than 50 K. She's in her late 30s.


Not really, other than the obvious. I eventually got a degree at age 29 and soldiered on.

I think it comes down to: high income, low spending, high returns, pick any two.

Hboy54


----------



## ian (Jun 18, 2016)

I was very fortunate to have both a good stock plan and acquire stock options at the right times. I kept the stock options and exercised them carefully. The stock plan stock got sold at every buy period, six months, and the money offset against our mortgage. I worked for an IT company that went through two stressful mergers. I did not want to have my career, pension, and equities tied up in one organization. SO, with the exception of options, we invested elsewhere in different sectors. Some of my colleagues held on to their options for too long. They watched those 15 and 17 dollar options go to 54 and then back to 17 without exercising one grant. The beauty of options that they are taxed at the same rate as capital gains-only 50 percent of the gain is taxable. I got caught out with a very small number that expired at a higher price than the then current market price.


----------



## redsgomarching (Mar 6, 2016)

i think this has already been said but the bottom line is growing your networth is all in the approach and dedication to doing it. everyone will have a different story of how they got there with some sharing steps but overall the basis comes down to the dedication to building that nest egg. don't have stock options? great, find another way to monetize a hobby so you can spend time earning away from work.


----------

