# 24 y/o - road to financial freedom



## Dimpled Balls (Jun 8, 2020)

Hi everyone,

I have been reading the “money diaries” forum and have found everyone’s stories very intriguing. Here is my current state and I’m hoping to get some feedback and advice for the future. 


24 years old, single, no student debt, graduated university 2 years ago.
I have approximately 100k in savings/investments - started investing in stocks in April.
No residence expenses - living with parents.
Pay off credit card monthly to $0
Trying to save 2k per month.

I have a full time job and am making 65k per year. 

The goal is to be financially free by 50 y/o. Is now the time to buy into a rental property? Do I continue to invest in stocks? I want to generate multiple sources of passive income while working and saving. 

Thanks


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## Johnny199r (May 20, 2014)

100k by 24, well done. You're much further ahead than most people.

Re; Property - do you want to be tied down to one spot? Do you have aspirations of moving to another place someday? If so, you probably dont want to own a rental property in another city/province.

I dont own any property. I like having my capital in the stock markets so I'm not tied down to one place.


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## Dimpled Balls (Jun 8, 2020)

Johnny199r said:


> 100k by 24, well done. You're much further ahead than most people.
> 
> Re; Property - do you want to be tied down to one spot? Do you have aspirations of moving to another place someday? If so, you probably dont want to own a rental property in another city/province.
> 
> I dont own any property. I like having my capital in the stock markets so I'm not tied down to one place.


Thank you for the reply! I can see myself staying in the GTA my whole life. It’s where I grew up and where I want to be. If you decide to find a rental property in another province, maybe you can look into a property manager? Not too sure.

As for the stock market - my mind seems to pull me in different directions - whether it is day trading, long term holds or ETF’s like vanguard. Tough to narrow down which path I’d like to go down.


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## peterk (May 16, 2010)

I think you're pretty much all set, I wouldn't worry about it much. Stocks, real estate, whatever. Just be dilgent in not overspending and invest "wisely" in whatever you do, i.e. not too aggressively or conservatively. Continue to focus on your life goals that aren't money related (health, intellectual pursuits, family, and working hard at whatever you do) and a prosperous life will flow.

Don't get too caught up in the weeds. Whatever happens happens with your financial life, you can only control so much. So long as you don't screw up majorly or have very bad luck, you'll probably end up upper middle class and can retire in your 50s, like you want.


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## Johnny199r (May 20, 2014)

Dimpled Balls said:


> Thank you for the reply! I can see myself staying in the GTA my whole life. It’s where I grew up and where I want to be. If you decide to find a rental property in another province, maybe you can look into a property manager? Not too sure.
> 
> As for the stock market - my mind seems to pull me in different directions - whether it is day trading, long term holds or ETF’s like vanguard. Tough to narrow down which path I’d like to go down.


With your large assets at a young age, and assuming regular contributions, low cost ETFs are a great tool. Day trading can be hit or miss, depending on expertise. Property can be a headache. No expertise or time required for ETFs.

Assuming you invest $25k a year, in addition to your current 100k for the next 26 years, at 6.5% rate of return, that's $2,201,570.89.


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## Dimpled Balls (Jun 8, 2020)

Johnny199r said:


> With your large assets at a young age, and assuming regular contributions, low cost ETFs are a great tool. Day trading can be hit or miss, depending on expertise. Property can be a headache. No expertise or time required for ETFs.
> 
> Assuming you invest $25k a year, in addition to your current 100k for the next 26 years, at 6.5% rate of return, that's $2,201,570.89.


Thanks for providing this! $2,201,570.89 is mind boggling money. ETF’s seem to be the safest route to attaining long term wealth without any headaches. The beauty about this is also having time on my side now. Just trying to figure out what’s best for when I’m 50.


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

As a long time real estate investor I would not recommend you to buy rental real estate at this time. If I had as good a job as you have I would never have bothered with real estate investing. You can do better with less hassles by sticking to your job and investing in stocks, using your self directed RRSP as much as possible.
Day trading is a mug's game. 90% of day traders go broke and no wonder, it puts you at a huge disadvantage in so many ways. Start off with low cost ETFs and dividend stocks, read a few books, and if you are drawn to trading paper trade for at least six months and then trade small. Trading real money is a lot more emotional than paper trading and most people are not ready for it. The secret I found is to trade so small the gains and losses seem insignificant, and not worth bothering about. Once you get the hang of it and show steady gains you can slowly increase your trade size but never risk more than 2% of your account on any one trade.


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## MrMatt (Dec 21, 2011)

Keep your standard of living well below your income.

Make sure you optimize investments, I'd put first in TFSA the highest growth Canadian stuff, then RRSPs.
At your age big TFSA contributions will proving great results.

Also don't get too hung up on details, keep things simple.

Finally as a wealthy person living below their means, don't be afraid to spend money to save time. Why drive to the store when they'll deliver for free or even small amounts like $5 or so, your time is valuable.


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## Dimpled Balls (Jun 8, 2020)

Rusty O'Toole said:


> As a long time real estate investor I would not recommend you to buy rental real estate at this time. If I had as good a job as you have I would never have bothered with real estate investing. You can do better with less hassles by sticking to your job and investing in stocks, using your self directed RRSP as much as possible.
> Day trading is a mug's game. 90% of day traders go broke and no wonder, it puts you at a huge disadvantage in so many ways. Start off with low cost ETFs and dividend stocks, read a few books, and if you are drawn to trading paper trade for at least six months and then trade small. Trading real money is a lot more emotional than paper trading and most people are not ready for it. The secret I found is to trade so small the gains and losses seem insignificant, and not worth bothering about. Once you get the hang of it and show steady gains you can slowly increase your trade size but never risk more than 2% of your account on any one trade.


Thanks for your reply. I think day trading is slowly beginning to be out of the question now. Far too risky and I’m at a point where I want to maximize on my already “decent” financial position at my age.


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

In case you are curious about how I trade I laid out the whole thing in this thread anyone making any serious money....
So far am up $101,000 on this trade since March or 36% on my trading account. It would have been 3 or 4 times that but I was trading very cautiously (I hate to lose money).
It may seem childishly simple and it is, but it took me 50 years to figure it out. It can take a long time to learn something simple. Don't think you have to make things complicated, or that you need to be some kind of genius to make money. You don't.


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## peterk (May 16, 2010)

Dimpled Balls said:


> Thanks for providing this! $2,201,570.89 is mind boggling money. ETF’s seem to be the safest route to attaining long term wealth without any headaches. The beauty about this is also having time on my side now. *Just trying to figure out what’s best for when I’m 50.*


In just a few short years you'll likely figure out that this is a bit of an unimportant goal, and not something to bother thinking about excessively.

You are in the sweet spot right now of: money, job, no immediate plans or responsibilities on the horizon, so thinking about money a lot and imagining a straight line to age 50 is normal and seems reasonable to you at the moment. 

Soon things will change and you'll come to realize that 50 is far, far away, and you can barely plan your life out for more than a year or two. There are many steps and things to do along the way, wealth and retirement is only one of those things, and it'll come when it comes, if it comes. 

I think your plan to buy ETFs, (stock heavy ones, I might add), is a fine plan, the best plan. And also be prepared to want/need to spend some of that money that you're saving and investing, along the way, on worthwhile things in your life over the next 20 years.


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## Dimpled Balls (Jun 8, 2020)

peterk said:


> In just a few short years you'll likely figure out that this is a bit of an unimportant goal, and not something to bother thinking about excessively.
> 
> You are in the sweet spot right now of: money, job, no immediate plans or responsibilities on the horizon, so thinking about money a lot and imagining a straight line to age 50 is normal and seems reasonable to you at the moment.
> 
> ...


Agreed 100%. This is just the mindset of a guy who’s currently graduated and luckily found a job while saving as much as I can in a time where I have no real expenses. This is going to change quickly and I have wrapped my head around this.

Any ETF’s you recommend in particular?


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## peterk (May 16, 2010)

Oh probably not. I'm terrible at investing, don't listen to me. 😝

I'm sure I'd just put all my money in half SPY and half XIU if I were smart... or maybe a VGRO type of thing... But it's very hard not to be arrogant, greedy, bored, or impatient, and follow the easy decision to do only that. I still pick stocks and waste lots of time, clinging to some deluded fantasy about getting richer faster, as if that would be a worthy life accomplishment.


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