# Living On A Million Dollars



## tygrus (Mar 13, 2012)

I see more and more of these news stories about people who have got to a million either by extreme saving, maybe a house sale etc., then they quit work in their late 30s and say they are going to live on $40k per yr passive income forever. While am sure it can be done, $40k would be about the amount to rent or pay a mortgage, eat, utilities, bit of entertainment and thats about it afterwards, no account for inflation etc. 

While I am all for frugality, that seems not enough to rely on, especially if a family is in your future.


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## none (Jan 15, 2013)

If you have a million you would get about 40K plus 10-15 in OAS and CPP (caveats with that). 55K a year is pretty decent to live on if you're living paycheck to pay check.

To get to a million you don't really need to do extreme savings. I'm more less on track to hit a million at 65 and all I have to do is save $450 a month until then. That's not too much of a burden. Although saving is still less fun than spending!


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## nobleea (Oct 11, 2013)

If it's heavy on the dividends, then the 40K per year will feel more like 50 or 55K per year due to preferential taxation on dividends. Plus over the long term, dividends generally grow at a rate similar to inflation.

A lot of people raise normal families on incomes of 50K a year, so it's certainly doable.
If the house was paid off (no rent, just upkeep and taxes), then i could see it being a decent life.


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## hboy54 (Sep 16, 2016)

Hi:

My area is reputed to be the poorest in Ontario except for the misery found on reservations. Likely half or more residents would be delighted to get their incomes up to $40K.

Is it possible? Sure. Many going to choose to permanently live on that much if they have the means to obtain more? Not likely many takers.

Hboy54


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## TomB16 (Jun 8, 2014)

One million is pretty modest and doesn't leave a buffer for problems that life is great at creating. Still, I think my wife and I could easily live on it.

For someone who has averaged 8~10% returns over the last 20 years, as many investors have, one million dollars will provide a lot more comfort and adventure.

I agree with Tygrus. $1M is too little for an index investor to live on for 30 years. Index investors should be thinking about $1.5M of today's money as a bare minimum, unless they have a plan that involves extreme frugality. Moving to Mexico, for example, would enable a couple to easily live off $1M or even less.


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## none (Jan 15, 2013)

TomB16 said:


> One million is pretty modest and doesn't leave a buffer for problems that life is great at creating. Still, I think my wife and I could easily live on it.
> 
> For someone who has averaged 8~10% returns over the last 20 years, as many investors have, one million dollars will provide a lot more comfort and adventure.
> 
> I agree with Tygrus. $1M is too little for an index investor to live on for 30 years. Index investors should be thinking about $1.5M of today's money as a bare minimum, unless they have a plan that involves extreme frugality. Moving to Mexico, for example, would enable a couple to easily live off $1M or even less.


^ This is credulous and has no basis is reality.


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## Karlhungus (Oct 4, 2013)

Can easily be done. If you track expenses and live even modestly frugal its not that hard. Most of the people that track their expenses are within a couple thousand each year, so not much fluctuation. I find most people only dwell on the negative what ifs, and not the positive. What if the stock market crashes? What if a major expense comes up? Ya well, you're not working anymore. What if you discover a passion project that ends up generating money? The people that are retiring in their late 30's are motivated individuals. They are not gonna sit around all day. Its too easy to make money.


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## gibor365 (Apr 1, 2011)

tygrus said:


> I see more and more of these news stories about people who have got to a million either by extreme saving, maybe a house sale etc., then they quit work in their late 30s and say they are going to live on $40k per yr passive income forever. While am sure it can be done, $40k would be about the amount to rent or pay a mortgage, eat, utilities, bit of entertainment and thats about it afterwards, no account for inflation etc.
> 
> While I am all for frugality, that seems not enough to rely on, especially if a family is in your future.


I agree . Even with grown up kids, 1M is not enough for comfortable living. It will be enough for food, utilities, property tax etc,. but not enough if you want to travel around the world.
I'd estimate that we need at least 1.7-2M for comfortable living from dividends/interest


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## james4beach (Nov 15, 2012)

tygrus said:


> I see more and more of these news stories about people who have got to a million either by extreme saving, maybe a house sale etc., then they quit work in their late 30s and say they are going to live on $40k per yr passive income forever. While am sure it can be done, $40k would be about the amount to rent or pay a mortgage, eat, utilities, bit of entertainment and thats about it afterwards, no account for inflation etc.
> 
> While I am all for frugality, that seems not enough to rely on, especially if a family is in your future.


Whether or not it's enough depends on how much you'll be spending  For my lifestyle, I think I would need 1.5 M in today's dollars to retire. You may find this simulator useful:
https://www.portfoliovisualizer.com/monte-carlo-simulation

For example, enter 1 M capital, fixed annual $35,000 withdrawals, with inflation adjustment, boost it to 50 year simulation. Enter 50/50 US stock and bond exposure. The results show probability of success for the 50 years at over 90% with this balanced exposure. So yeah, maybe 1M is enough to retire with 35k + inflation withdrawals.

Assuming you only need 35k


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## CalgaryPotato (Mar 7, 2015)

Well first it sounds like you are only talking about the case where the person in question has sold any property they have and are solely living off of the million dollars and have to afford rent within that. Because if the person has a fully paid off home, it can make a clearly big difference to the monthly costs.

Second you have to remember many in Canada don't make that much to begin with. If a person makes $30/hour which is considered quite a good income, that is $60K/year. Out of that they are going to pay CPP/EI & Income taxes. On top of that they save a few thousand per year to get to their million of savings in the first place. The amount they were living off of, isn't that far different from the $40k/year to begin with. And that is not taking into account they may now have a paid off home, they may have been paying for children who are now out of the house, and they may be reducing their commute expenses.

I'm not great at the whole frugal living thing personally, I like to enjoy some of the finer things in life, particularly travel. I would struggle to live off of $40K/year. But it is hardly a ridiculous figure.


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## Spudd (Oct 11, 2011)

I tracked spending for 2 years and found we spent about 36k/year, not including mortgage payments. If one's house is paid off, I think one can quite easily live on that, assuming one is reasonably frugal. If not (on either), it would be tight.


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## bds (Aug 13, 2013)

My partner and I happily live off less than $40k/year now and we go on 2 trips a year on average. It isn't hard, you need to decide if you'd rather have the fancy car, all the cable channels, and a latte every morning or a couple trips a year and the freedom to choose to work instead of needing to work.


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## peterk (May 16, 2010)

Thought $1M would be enough for quite a while in my 20s, but pretty sure it's not anymore.

Either you're going to have kids in your 30s and expenses will rise above 40k significantly, or remain a bachelor and want to start living an 80k lifestyle by the time you're 40 and beyond.

Of course it's hard to predicts just how much money you'll have in the future. Focusing on cash-flow and savings rate is nice and makes you feel accomplished, but decades-long net worth is really what matters. You could make way above average money, go through bad investments and divorce, and end up with not much in your 40s. Or you could be a layabout, buy a $200k house in vancouver when you're 20 with a borrowed downpayment and end up with $2M+ in your 40s.


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## m3s (Apr 3, 2010)

CalgaryPotato said:


> I'm not great at the whole frugal living thing personally, I like to enjoy some of the finer things in life, particularly travel. I would struggle to live off of $40K/year. But it is hardly a ridiculous figure.


People have travelled the world on less. The slower you travel the cheaper it is per day. I like to enjoy finer things in life that many seem to think are unaffordable yet they are in debt while I bank most of my income. $40k per year is very doable if you are savvy

If you want to live in a major suburb of cookie cutter houses, drive 2 vehicles that keep up with the jones and put a class of adult children through post secondary education and extra curricular activities then no. $40k will never be enough.


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## redsgomarching (Mar 6, 2016)

It depends on their situation. If a young couple never wants kids and works diligently for a period of time while living frugally they could definitely achieve the 1 mill. Now the fact that they don't want nor will they have kids will free up a lot in their life budget. 1 mill at conservative 4% is 40k in dividends (pretty achievable) not to mention the ability to shelter 100k of the portfolio in TFSAs which the divs they will not pay tax on. This also doesn't mean a complete stoppage from work. I would pick up programming and try to get some freelance deals to get some small income. 

The only thing that would eat into the income is the place to live. Now if its 1 mill + small condo then you are set. I'd gather that this lifestyle would mean extensive travelling and would require knowledge on good travel deals. 

I would spend 12k to go on a half year cruise each year and not worry about anything else and then have the rest for the remaining to live for the rest of the year.


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## james4beach (Nov 15, 2012)

redsgomarching said:


> 1 mill at conservative 4% is 40k in dividends (pretty achievable)


Beware that 4% extraction from a portfolio is not conservative and is considered barely sustainable, if we're talking 4% of the original value (40k) plus inflation adjustment, on a constant withdrawal schedule (i.e. 4% SWR).

Dividends are a different matter, as they are not constant withdrawals but will vary over time.


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## redsgomarching (Mar 6, 2016)

james4beach said:


> Beware that 4% extraction from a portfolio is not conservative and is considered barely sustainable, if we're talking 4% of the original value (40k) plus inflation adjustment, on a constant withdrawal schedule (i.e. 4% SWR).
> 
> Dividends are a different matter, as they are not constant withdrawals but will vary over time.


You are right maybe between 3-4% and the dividend timing would definitely be something to be wary of.


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## Eder (Feb 16, 2011)

Most good businesses increase dividends faster than inflation...try that with most other investment options. With 1 mill buy argo's 6 pack & you won't be worrying about inflation.


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## canew90 (Jul 13, 2016)

Not too many people start out with $1Mil. As mentioned, live within your means, save, invest and increase your saving\investments as one earns more. We certainly didn't have $1Mil even when we were 55, but at that age we were earning good money, owned our home, no debts, and were therefore able to really increase our annual contributions considerably. Then we began investing for Income not the size of the investment or whether we were meeting or beating any index or market. I think that's the key, at least it was for us, how much income will one's investment generate and is it a growing income. What happen for us is as our income grew, so did our capital and now we do have over $1Mil invested and a growing income which exceeds our annual expenses.


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## john.cray (Dec 7, 2016)

Interesting thread.

I've been thinking about this recently. Say you have $1 Million in a very well diversified portfolio - equities: us, cad, developed, emerging you got it. Then you have bonds, preferred shares and REITs. At the end finish with some gold bullion. You get the point. Total market value - $1M.

If you decide to retire at this point and live off of it what do you do exactly? Do you restructure it and go heavy on Canadian dividend stocks (aiming for 4% income) or you keep it as is and start selling little by little?

If you chose case 1) then it looks like diversification goes out the window but it's simple and you enjoy low taxes on Canadian dividends
If you chose case 2) then it feels like it's harder to "generate" the income due to multiple transactions/commissions every month or two

What is your approach?

P.S. I realize that the above is somewhat oversimplified ...


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## agent99 (Sep 11, 2013)

A lot depends on WHERE you live. I am sure there are people with a cabin in a remote part of BC that live on less. same would be in Newfoundland. But in Toronto, Vancouver or even other major cities?? Unless you are prepared to be a street person or something close. 

Someone metioned CPP/OAS. You won't get much of that at 30 something (or even later if you don't work)

For a retired middle class couple with paid off home and full CPP/OAS living outside of major cities, a million might do it in todays $. They would have a total of about $65-$70k before tax if the money has wisely invested. But not if in GICs or the like.


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## m3s (Apr 3, 2010)

agent99 said:


> A lot depends on WHERE you live. I am sure there are people with a cabin in a remote part of BC that live on less. same would be in Newfoundland. But in Toronto, Vancouver or even other major cities?? Unless you are prepared to be a street person or something close.


This kind of thinking blows my mind

Someone living in Toronto has $1M (anyone who owns a house there) and says well darn I need to keep working until 65. Because Toronto. Does it not cross their mind that they could be living like a king in many beautiful parts of the world instead of gridlock traffic and cubicles half their life? Leaving is not even an option? I live in hamster cage therefore I shall run in the hamster wheel? Stockholm syndrome maybe?

To build up OAS you need to live in Canada for 6 months/year. Why not spend 6 winter months somewhere warm in a hammock.


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## My Own Advisor (Sep 24, 2012)

You don't need to save $1 M if you a) save early and b) save often. Compounding and reinvested returns and dividends will take care of the rest over 20-30 years. 

That said, to answer your question, I hope to live off $1 M within another 10 years. 

I have no hope of quitting work in my 30s. In my early 40s now but we're halfway to our goal. I recently wrote about how I believe $1 M is "good enough" for our retirement plans: 
http://www.myownadvisor.ca/our-bucket-approach-to-earning-income-in-retirement/

This excludes CPP and OAS income which should be a conservative of $20,000 per year between both of us at age 60 or higher at age 65.

Say you have $1 M in your RRSP, at age 60. You can withdraw a tidy sum of money for the next 30 years. 

At the end of the day, $1 M or $2 M or even $500k is OK depending upon your lifestyle. Once you figure out how you want to live, the 'enough number' is easy to figure out. Just me maybe.


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## TomB19 (Sep 24, 2015)

I agree with MOA but I think there are a lot of moving parts here.

I've been grappling with this problem for years and have yet to determine a quantitative nest egg number I knew was right. At the end of the day, I think you get yourself into a reasonable range and you live within what you have. You adjust to fit the money at hand, instead of adjusting the money to fit you.

... and then there is the issue of risk versus time. We intend to draw out less than what we could, at first, because I am a fraidycat. As we get closer to end of life, I expect we'll be able to turn up the spending massively. ... but when you have 35 years to fund, it's a bit scary.


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## agent99 (Sep 11, 2013)

My Own Advisor said:


> Say you have $1 M in your RRSP, at age 60. You can withdraw a tidy sum of money for the next 30 years.


Unfortunately, part of that $1million belongs to the government. It will be taxed at full rate, same as interest when withdrawn. At 71 the government will set the withdrawal rate at 5.28% and it goes up every year after that. It depends on whether we are talking about a single or a couple, but a good part of OAS/CPP (also taxable at full rate) will be required to pay the taxes on the RRSP/RRIF withdrawal. 

So basically saying that $1million in RRSP is not same as $1million in taxable savings.


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## My Own Advisor (Sep 24, 2012)

Yet Tom, you could, if you had...and you might because from what I know you've done very well for yourself..... had $1 M in an RRSP today, and start withdrawing from it at age 60; assuming 2% inflation and a 5% conservative rate or return - _unless you have lots of debt at the time of retirement_ you could withdraw $50k per year and die broke at age 94. 

Then, if you owned a home, you could always sell that in your 90s and use that for supportive care. Then you have CPP and OAS on top of your $50k per withdrawn.

I've always thought the 'enough number' is a bit of a guessing game but I believe if people, could, somehow, strive to have $1 M in the bank in their 60s (say time of retirement) they've done very well and would have little money issues in their golden years.

The 'enough number' is easy if you know when you'll die. Morbid thought but true. So, better to save your David Chilton net 10% income as early and as often as possible and if you hit $1 M (or even close to it for most Canadians) pat yourself on the back - you've saved well and done good.


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## mordko (Jan 23, 2016)

none said:


> ^ This is credulous and has no basis is reality.


Quite. Someone who is claiming that an index investor needs 50% more funds to generate the same income as active investors is deluding himself and the reasons are bloody obvious - a well as statistics. Then again, I am all for active investment - by others - so all is good.


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## hboy54 (Sep 16, 2016)

m3s said:


> This kind of thinking blows my mind
> 
> Someone living in Toronto has $1M (anyone who owns a house there) and says well darn I need to keep working until 65. Because Toronto. Does it not cross their mind that they could be living like a king in many beautiful parts of the world instead of gridlock traffic and cubicles half their life? Leaving is not even an option? I live in hamster cage therefore I shall run in the hamster wheel? Stockholm syndrome maybe?
> 
> To build up OAS you need to live in Canada for 6 months/year. Why not spend 6 winter months somewhere warm in a hammock.


I wonder about this too. I am 54. There are at the very least tens of thousands of Toronto homeowners about my age who bought 20 or 30 years ago and are sitting on approximately a tax free one million dollar gain earned purely by the genius of being lucky. Why there is not a stampede out of Toronto to say Ottawa where the same building can be had for $300K or $400K is beyond my understanding. Or put another $100K in your pocket by living across the river in Gatineau. Or put yet another $100K in your pocket living in some economically dead area like where I live.

I can kind of understand Vancouver if you really must be a Canadian that lives in Canada but insists on not experiencing winter, but even here, why not pull an Eder, that is get your *** on a sailboat and hit Mexico or the Caribbean annually.

Hboy54


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## My Own Advisor (Sep 24, 2012)

hboy54 said:


> I wonder about this too. I am 54. There are at the very least tens of thousands of Toronto homeowners about my age who bought 20 or 30 years ago and are sitting on approximately a tax free one million dollar gain earned purely by the genius of being lucky. Why there is not a stampede out of Toronto to say Ottawa where the same building can be had for $300K or $400K is beyond my understanding. Or put another $100K in your pocket by living across the river in Gatineau. Or put yet another $100K in your pocket living in some economically dead area like where I live.
> 
> I can kind of understand Vancouver if you really must be a Canadian that lives in Canada but insists on not experiencing winter, but even here, why not pull an Eder, that is get your *** on a sailboat and hit Mexico or the Caribbean annually.
> 
> Hboy54


I have no idea hboy. If I was sitting on $1 M tax free in Toronto, I'd be LONG gone. If I was sitting on $2 M in Vancouver I'd be running!!!


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## My Own Advisor (Sep 24, 2012)

agent99 said:


> Unfortunately, part of that $1million belongs to the government. It will be taxed at full rate, same as interest when withdrawn. At 71 the government will set the withdrawal rate at 5.28% and it goes up every year after that. It depends on whether we are talking about a single or a couple, but a good part of OAS/CPP (also taxable at full rate) will be required to pay the taxes on the RRSP/RRIF withdrawal.
> 
> So basically saying that $1million in RRSP is not same as $1million in taxable savings.


Yes, part of it does. But if you own your home, you have $1 M in the bank churning out income, AND you have CPP and OAS to rely on, are you saying that's not enough money to live on? Maybe depending on how some people live, it's not, but for 95% of Canadians over age 60 I suspect they would be very happy and comfortable.


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## tygrus (Mar 13, 2012)

Call me crazy but $5 MM would be what I would consider to be enough to live well on. That would throw off $200k. Then you cna have it all.


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## agent99 (Sep 11, 2013)

My Own Advisor said:


> Yes, part of it does. But if you own your home, you have $1 M in the bank churning out income, AND you have CPP and OAS to rely on, are you saying that's not enough money to live on? Maybe depending on how some people live, it's not, but for 95% of Canadians over age 60 I suspect they would be very happy and comfortable.


A lot will depend on how you have the money invested. 

You can't just assume a 5% return. You need to consider the real return over the long term. If you have a mix of FI and equities, 1.5% real might be a figure to use. Or 3.5% with 2% inflation. 

If your nest egg has a sizeable equity allocation, you must consider how those $50k annual withdrawals will affect it. James often talks about sequence of returns. Or, what happens to portfolio if you withdraw at same rate at times when markets are down. Withdrawal rate of 5% is well above what is usually recommended, so there is a risk of running out of money if spending is not cut back. Maybe 3.5% would be safer estimate. Also consider that at 60, you will have to draw down more before CPP/OAS kick in.

Whether $1million is enough will depend on your lifestyle. But you won't be living the Life of Riley


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## mordko (Jan 23, 2016)

I am thinking $2M in investments, not counting bits and pieces like CPP, paid-up house and consultancy income. That would make me feel financially independent and as close to being financially secure as one can get without being a Zuckerberg.


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## gibor365 (Apr 1, 2011)

> I am thinking $2M in investments, not counting bits and pieces like CPP, paid-up house and consultancy income.


 Same opinion, however unlike CPP/OAS, I'd count DCPP


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## mordko (Jan 23, 2016)

Sure, so would I. And DBPP.


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## tygrus (Mar 13, 2012)

So paid off house, kids gone, etc and $2M? Sounds doable.

But the people in the articles are like 35 and single. I mean good for them $1M at 35 or something. But to make it another 50 yrs on that...and I wouldnt count on any govt programs being there when you turn 65.


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## mordko (Jan 23, 2016)

Don't get the thrill of retiring at 30. Quitting a bank job and starting your own business or something like that - sure. But retiring at 30? 

Doing it with $1M when you are so young is taking a huge risk but that's only part of the problem here.


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## gibor365 (Apr 1, 2011)

> I wonder about this too. I am 54. There are at the very least tens of thousands of Toronto homeowners about my age who bought 20 or 30 years ago and are sitting on approximately a tax free one million dollar gain earned purely by the genius of being lucky. Why there is not a stampede out of Toronto to say Ottawa where the same building can be had for $300K or $400K is beyond my understanding.


Mostly because of the family reasons. My mom and MIL (both 70+) live now 20 min driving from us. If we move, they need to move too and this is pretty complicated. Our kids also most likely will live in GTA, Our son soon graduates from University and 90% he secured god job in Canadian bank (downtown Toronto). Our daughter also planning to go to banking industry. Not sure we want to live 3-4 hours flight from our kids and potential grandkids


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## gibor365 (Apr 1, 2011)

mordko said:


> Don't get the thrill of retiring at 30. Quitting a bank job and starting your own business or something like that - sure. But retiring at 30?
> 
> Doing it with $1M when you are so young is taking a huge risk but that's only part of the problem here.


Agree. imho, the resonable retirement is aroung 50 (+/- 2-3 years). No debt, include mortgage. Paid off house/condo, 1.7-2M is saving (50% stocks, 50% FI).

btw, in your opinion, what is the best place to move away from Toronto. The place that has high quality of life, cheap houses, close to major airport and hospital?


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## STech (Jun 7, 2016)

mordko said:


> Don't get the thrill of retiring at 30. Quitting a bank job and starting your own business or something like that - sure. But retiring at 30?
> 
> Doing it with $1M when you are so young is taking a huge risk but that's only part of the problem here.


Yup, my thinking as well. Instead of hitting a magic mile marker (like a million), calling it a career, and then worrying about if you have enough or not. Why not hit your target, and either scale way back on work, or pick another career that you truly enjoy even though it pays less. Work the hours you want in semi retirement. Living from 30-85 years old in retirement will most certainly get boring, if you don't have mega millions to travel the world and live in dozens of places.


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## agent99 (Sep 11, 2013)

gibor365 said:


> btw, in your opinion, what is the best place to move away from Toronto. The place that has high quality of life, cheap houses, close to major airport and hospital?


That could be another whole thread. But maybe for places within easy reach of family: Cambridge/Kitchener area, London or perhaps Kingston.


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## mordko (Jan 23, 2016)

STech said:


> Living from 30-85 years old in retirement will most certainly get boring, if you don't have mega millions to travel the world and live in dozens of places.


And even then... Like don't these people have an ambition to achieve something and ultimately tell grandkids "I did this, and it wasn't just lying on a beach in 459048549584908 different places".


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## kcowan (Jul 1, 2010)

TomB16 said:


> Moving to Mexico, for example, would enable a couple to easily live off $1M or even less.


I met a Texas couple who had sold their house for $200k and bought a comparable one for $100k.

They were going to live on SS and Medicare and add the $100k to their $150k stash. They readily admitted that they could not retire in the US.

Not for me but a viable option for many.


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## dotnet_nerd (Jul 1, 2009)

gibor365 said:


> btw, in your opinion, what is the best place to move away from Toronto. The place that has high quality of life, cheap houses, close to major airport and hospital?


A great option is the Niagara region. Eg. Welland, Fonthill, Fort Erie, Port Colborne, Crystal Beach, Wainfleet are a few good choices. (Avoid Niagara Falls/Niagara-on-the-Lake - too expensive and touristy)

Housing here is still cheap in these places._ Dirt cheap_ compared to the GTA You're in the heart of wine country, close to nice beaches on Lake Erie, parks, quiet, low traffic/noise etc.

Hospital: the new facility in St. Catharines is in easy reach on a 400 series highway
Airport: Buffalo is minutes away


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## kcowan (Jul 1, 2010)

My Own Advisor said:


> I have no idea hboy. If I was sitting on $1 M tax free in Toronto, I'd be LONG gone. If I was sitting on $2 M in Vancouver I'd be running!!!


I was sitting on a million in Toronto and stayed there and worked for 5 more years before moving to Vancouver. The thing is, when your place becomes worth a lot (we paid 250k 10 years before), nothing else has changed. 

We did go to see a property in Lake Joseph that had decline from $799k to $375k and sold to the relator for $300k, same as our offer.


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## kcowan (Jul 1, 2010)

gibor365 said:


> Not sure we want to live 3-4 hours flight from our kids and potential grandkids


Yes this anchor prevents many retirees from moving to a place more sensible for them.

I suppose the family connection is strong. We moved 1500 miles away from their grandparents but had them each out for a month to live with us every year. Then we moved back 8 years later and were local again.

I think the one month stay with us generated a stronger bond and the extended family feeling much more than the Sunday dinners at al. YMMV but don't just dismiss the idea.


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## OnlyMyOpinion (Sep 1, 2013)

dotnet_nerd said:


> A great option is the Niagara region. Eg. Welland, Fonthill, Fort Erie, Port Colborne, Crystal Beach, Wainfleet are a few good choices.


Agreed, ancestors liked the area too, moved there in 1787 after the Amercican Revolution and still have family in the area.


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## kcowan (Jul 1, 2010)

agent99 said:


> That could be another whole thread. But maybe for places within easy reach of family: Cambridge/Kitchener area, London or perhaps Kingston.


My son chose Belleville because the other grandparents lived there. He rented a basement apartment in Whitby to use the GO train to work.


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## CalgaryPotato (Mar 7, 2015)

m3s said:


> This kind of thinking blows my mind
> 
> Someone living in Toronto has $1M (anyone who owns a house there) and says well darn I need to keep working until 65. Because Toronto. Does it not cross their mind that they could be living like a king in many beautiful parts of the world instead of gridlock traffic and cubicles half their life? Leaving is not even an option? I live in hamster cage therefore I shall run in the hamster wheel? Stockholm syndrome maybe?
> 
> To build up OAS you need to live in Canada for 6 months/year. Why not spend 6 winter months somewhere warm in a hammock.


I could also say I don't get why someone who choose to pick up and move away from all their friends and family the day they retire. Also I know people who've moved to the other side of the country or the other side of the world and absolutely hated it, moving to a new place is different than going there on vacation. I don't know if the average person who has lived in a big city their whole life, would just automatically adjust to living in the middle of nowhere.


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## CalgaryPotato (Mar 7, 2015)

tygrus said:


> Call me crazy but $5 MM would be what I would consider to be enough to live well on. That would throw off $200k. Then you cna have it all.


Well if you go with that as your standard 95% of Canadians will never have enough to live off of in their working or retired lives.... again why this whole conversation is relative. 

I know seniors who would have more money than they'd know what to do with if they were getting $40K/year.


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## Koogie (Dec 15, 2014)

dotnet_nerd said:


> A great option is the Niagara region. Eg. Welland, Fonthill, Fort Erie, Port Colborne, Crystal Beach, Wainfleet are a few good choices. (Avoid Niagara Falls/Niagara-on-the-Lake - too expensive and touristy)
> Housing here is still cheap in these places._ Dirt cheap_ compared to the GTA You're in the heart of wine country, close to nice beaches on Lake Erie, parks, quiet, low traffic/noise etc.
> Hospital: the new facility in St. Catharines is in easy reach on a 400 series highway
> Airport: Buffalo is minutes away



My wife and I looked at Port Colborne since I think it has a lot of future potential and housing prices were/are cheap. However, the owner of a local B&B warned us about the new super hospital in St. Kitts and the closure of significant healthcare options in the southern part of the peninsula. It is a long ambulance ride from Port Colborne to the south end of St. Kitts. A real big consideration for anyone with health problems (my wife) or anyone who is old/normal retirement age.


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## Eclectic12 (Oct 20, 2010)

gibor365 said:


> Mostly because of the family reasons. My mom and MIL (both 70+) live now 20 min driving from us. If we move, they need to move too and this is pretty complicated. Our kids also most likely will live in GTA, Our son soon graduates from University and 90% he secured god job in Canadian bank (downtown Toronto). Our daughter also planning to go to banking industry. Not sure we want to live 3-4 hours flight from our kids and potential grandkids


That's one factor.

OTOH, my aunt & uncle whose only "child" was a poodle - sold in Toronto to move up to Midhurst. 

Why Midhurst? 
Because according to them, when they checked Barrie out, those selling in Toronto and then moving to Barrie had driven up the Barrie prices so that Midhurst gave pretty much the same benefits by being close to Barrie for lower costs.


Cheers


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## Karlhungus (Oct 4, 2013)

james4beach said:


> Beware that 4% extraction from a portfolio is not conservative and is considered barely sustainable, if we're talking 4% of the original value (40k) plus inflation adjustment, on a constant withdrawal schedule (i.e. 4% SWR).
> 
> Dividends are a different matter, as they are not constant withdrawals but will vary over time.


Um SWR stands for Safe Withdrawal Rate. As in the safest amount you draw down. It is conservative already. Barely sustainable? You call a 95% success rate barely sustainable?


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## OnlyMyOpinion (Sep 1, 2013)

Koogie said:


> ... It is a long ambulance ride from Port Colborne to the south end of St. Kitts. A real big consideration for anyone with health problems (my wife) or anyone who is old/normal retirement age.


Valid point Koogie. I fear (and am convinced) that a reliable, timely ambulance trip is only one of many challenges we can look forward to wherever we are. 
The health and senior care 'system' is not prepared for future demands. 
We think GTA real estate is in a bubble - wait till the sh^t hits the fan with growing senior care demands.


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## agent99 (Sep 11, 2013)

gibor365 said:


> btw, in your opinion, what is the best place to move away from Toronto. The place that has high quality of life, cheap houses, close to major airport and hospital?


There is a new thread on CMF that may have the answer. Here is an exerpt 



> Apartments and flats for sale in Anna Nagar, Chennai
> Find apartments and flats for sale in Anna Nagar, Chennai within your budget on India Builders. We offer luxury flats and apartments for sale Chennai, Anna Nagar.


He doesn't mention it, but from reports, the health care there is cheap.


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## gibor365 (Apr 1, 2011)

kcowan said:


> Yes this anchor prevents many retirees from moving to a place more sensible for them.
> 
> I suppose the family connection is strong. We moved 1500 miles away from their grandparents but had them each out for a month to live with us every year. Then we moved back 8 years later and were local again.
> 
> I think the one month stay with us generated a stronger bond and the extended family feeling much more than the Sunday dinners at al. YMMV but don't just dismiss the idea.


Probably Canadians have different from us mentality  ... My uncle family (70+ , retired couple) live in rather expensive Richmond Hills and don't considered to move to cheaper place because they actually participate in live of their granddaughters include going with them for dancing lessons 3-4 times per week, doing homework etc...
When I asked them why they don't move to cheaper locations, they told me that cannot imagine life without seeing grandkids every week ...



> A great option is the Niagara region. Eg. Welland, Fonthill, Fort Erie, Port Colborne, Crystal Beach, Wainfleet are a few good choices.


 Out of curiousity, checked on remax some of this places + London. Guelph, Kingston..... holy sh*t, everything is soooo expensive .
imho, the resonable prices are only in Maritimes and maybe some areas of AB


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## OnlyMyOpinion (Sep 1, 2013)

agent99 said:


> There is a new thread on CMF that may have the answer. Here is an exerpt


With any luck, the moderators will remove that spam thread shortly. I see 55 views of it, hopefully as many have clicked the triangle in the lower left to report it as the spam/advertising/garbage that it is.


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## gibor365 (Apr 1, 2011)

agent99 said:


> There is a new thread on CMF that may have the answer. Here is an exerpt
> 
> 
> 
> He doesn't mention it, but from reports, the health care there is cheap.


Won't go to this crap even if youpay me 1M


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## TomB19 (Sep 24, 2015)

gibor365 said:


> Won't go to this crap even if youpay me 1M


How about $1.5M? At least you could retire on that.


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## gibor365 (Apr 1, 2011)

TomB19 said:


> How about $1.5M? At least you could retire on that.


In Chennai?! NO WAY!


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## agent99 (Sep 11, 2013)

gibor365 said:


> Out of curiousity, checked on remax some of this places + London. Guelph, Kingston..... holy sh*t, everything is soooo expensive .
> imho, the resonable prices are only in Maritimes and maybe some areas of AB


We live close to Kingston. It is possible to buy a very nice home in an established area for under $400k (scroll down in the link) Even on waterfront for $800k (see one in link below). Some of the houses in new subdivisions (top of link) do seem to be over-priced.

http://www.royallepage.ca/en/on/kingston/properties/2/


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## GreatLaker (Mar 23, 2014)

Karlhungus said:


> Um SWR stands for Safe Withdrawal Rate. As in the safest amount you draw down. It is conservative already. Barely sustainable? You call a 95% success rate barely sustainable?


SWR studies are based on historical data for a balanced low-cost portfolio. If future economic conditions are worse than those of the study period then withdrawal rates that succeeded in the past may not work in the future. 4% WR succeeded through the great depression, the dirty thirties and the stagflation of the 1970s. Nonetheless there was also some very strong market performance throughout that time period, especially the 1980s and 1990s. With today's high market valuations and low fixed income returns there is concern that past SWRs may not work in the future.

So even retirees following an SWR method need to be vigilant about their spending rate, portfolio value and sustainability.


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## Pluto (Sep 12, 2013)

tygrus said:


> I see more and more of these news stories about people who have got to a million either by extreme saving, maybe a house sale etc., then they quit work in their late 30s and say they are going to live on $40k per yr passive income forever. While am sure it can be done, $40k would be about the amount to rent or pay a mortgage, eat, utilities, bit of entertainment and thats about it afterwards, no account for inflation etc.
> 
> While I am all for frugality, that seems not enough to rely on, especially if a family is in your future.


I think you have to keep in mind that 40K in elegible dividends is more in your pocket than 40K in employment income. One might not pay any tax on 40K in dividends.


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## Pluto (Sep 12, 2013)

agent99 said:


> A lot depends on WHERE you live. I am sure there are people with a cabin in a remote part of BC that live on less. same would be in Newfoundland. But in Toronto, Vancouver or even other major cities?? Unless you are prepared to be a street person or something close.
> 
> Someone metioned CPP/OAS. You won't get much of that at 30 something (or even later if you don't work)
> 
> For a retired middle class couple with paid off home and full CPP/OAS living outside of major cities, a million might do it in todays $. They would have a total of about $65-$70k before tax if the money has wisely invested. But not if in GICs or the like.


A favourate out of the way Ontario town is Owen Sound. Relativly nice town with cheap houses. A retired couple could still frequently visit TO area, check into motel, see hockey game, baseball, opera, symphony, grand kids....whatever...then go home to peace and quiet and watch the dividends roll in.


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## TomB19 (Sep 24, 2015)

Perhaps one of the issues here is being alluded to by Pluto a couple of posts ago.

Where is the million? Is it capital gain, distribution, or what? What is the tax rate on that income?

One million dollars in dividends held in a non-registered account will spend a lot easier than having a million dollars in an rrsp.


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## Eder (Feb 16, 2011)

You need to know yourself before you decide to worry about how/when to retire. Everybody is different. 
If you value work/career/golf and your life is complete being near friends & family there's no point to consider SWR or even RRSP contributions. I know many of my friends would drop dead if they stopped the 40 hour grind each week and are working happily into their 70's.


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## gibor365 (Apr 1, 2011)

agent99 said:


> We live close to Kingston. It is possible to buy a very nice home in an established area for under $400k (scroll down in the link) Even on waterfront for $800k (see one in link below). Some of the houses in new subdivisions (top of link) do seem to be over-priced.
> 
> http://www.royallepage.ca/en/on/kingston/properties/2/


Yeap, I took a look , not really familiar with Kingston and it's areas, but house similar to ours cost there $500-600K. Thus, after paying to laywer, realtor, moving cost etc... we won't have practically any profit from moving to Kingston


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## agent99 (Sep 11, 2013)

TomB19 said:


> One million dollars in dividends held in a non-registered account will spend a lot easier than having a million dollars in an rrsp.


True. I mentioned that to MOA in an earlier post when he was talking about $1million in a RRSP.


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## My Own Advisor (Sep 24, 2012)

Very true, again, $1 M in RRSP vs. $1 M non-reg. Sake of argument this hypothetical $1 M is 1/3 in non-reg, TFSA and RRSP. I stand by my comment that 95% of Canadians (maybe not all CMFers!  would have a very good retirement with that in the bank at age 60.


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## Dilbert (Nov 20, 2016)

I'm really enjoying this thread. I'd love to cash out of GTA and move to somewhere lower cost. But, we have our kids here and their kids. Even though we could afford to fly business class with all the extra dough anytime we would like to, it just wouldn't be the same as being here.


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## none (Jan 15, 2013)

My Own Advisor said:


> Very true, again, $1 M in RRSP vs. $1 M non-reg. Sake of argument this hypothetical $1 M is 1/3 in non-reg, TFSA and RRSP. I stand by my comment that 95% of Canadians (maybe not all CMFers!  would have a very good retirement with that in the bank at age 60.


Agreed. Lifestyles rise and fall and it's well established that after base needs are taken care of additional money gives little benefit. There is a lot of wisdom in the saying:

"Money doesn't buy happiness but happiness can be bought with money". it just matters what you do with it.


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## m3s (Apr 3, 2010)

mordko said:


> And even then... Like don't these people have an ambition to achieve something and ultimately tell grandkids "I did this, and it wasn't just lying on a beach in 459048549584908 different places".


I probably achieved more such things in my 20s than many working stiffs will in their 50s.

I believe people keep working because ego. Many get stuck in a cycle of buying things they don't need with money they don't have to impress people they don't like etc. Those who realize they no longer have something to prove with material wealth can step up from the esteem level of maslow's hierarchy to self-actualization. I don't believe one can truly get there without fulfilling their esteem first, but that doesn't always take 50 years..

Many studies about happiness describe an appreciation for the simple things in life, an acceptance of reality, comfort with oneself, independence from culture and free from reliance on others etc. Nobody enjoys things they cannot control, and material wealth doesn't necessarily correlate with happiness. I don't intend to work 9-5 in my 40s but I will definitely keep accomplishing things I want to do on my own terms

I don't need millions to achieve that.



CalgaryPotato said:


> I know people who've moved to the other side of the country or the other side of the world and absolutely hated it, moving to a new place is different than going there on vacation. I don't know if the average person who has lived in a big city their whole life, would just automatically adjust to living in the middle of nowhere.


Hah.. kinda like if you let the hamster out of its cage. Some people are really missing out on the world. I don't know why people wait until their 50s or 60s to experience it. By then they may be incapable to adapt or to comprehend anything different from their small version of the world. Their cage is self-imposed and their perspectives are often very narrow as a result.


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## Eclectic12 (Oct 20, 2010)

m3s said:


> ... I believe people keep working because ego ...


Some ... some just like what they do, some refuse to learn about finances despite saying they'd prefer to cut back on or stop working ... there seems to be a range, IMO.




m3s said:


> ... Some people are really missing out on the world. I don't know why people wait until their 50s or 60s to experience it.


It would be interesting to study. 

The bulk of those I know either like to see the world where their 50's & 60's (and/or retirement) means more trips than when they were younger or don't like to travel at any age.

(On a side note, my brother-in-law is interesting - he will happily go camping as long as the activities are not what he can do at home. Whenever my sister pulls out some books that she keeps putting off reading as the laundry/cooking dinner/shuttling her daughter to activities need to be done that being away from home removes from the picture - he is unhappy as "we could have been comfortable at home".)

I did have one co-worker who was "keep it meat & potatoes, I don't want to travel" who was sent to Europe for a year. After that, he was up for different types of food and traveling.


Cheers


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## Plugging Along (Jan 3, 2011)

Interesting thread. Could someone retire on $1m, for sure. It really depends on lifestyle and what you want.

My spouse and I could have retired in our 30's if we didn't have kids d 40s if we spent a lot less on them. Our plan to retire right is at 61 ish. Why that number, that is when I anntipate the youngest will have finished her graduate degree. At that point, we have provided her more than she should need tomake in the world. I hope it's earlier than that, but I want to be sure my kids once out of the nest, stay out.

I remember my dad retired I thought really earlier, about mid 50s. He said later, he waited u til I was done my second year university because he then knew I probably wasn't going to fail out (I had a too much fun in my first yer)

My parents currently live on under forty k a year. That is from their rental income, little savings, small CPP, OAS. In their early days of reitement, they went on more trips, so as kids, we helped pay for their trips so they could splurge. They had the money, but were just too worried that they would run out. Now, they are older, they find the trips are limited. They can pay for them, and have enough.

I think with a fully paid off home, no dependant, and some frugal spending it's definitely doable.


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## My Own Advisor (Sep 24, 2012)

none said:


> Agreed. Lifestyles rise and fall and it's well established that after base needs are taken care of additional money gives little benefit. There is a lot of wisdom in the saying:
> 
> "Money doesn't buy happiness but happiness can be bought with money". it just matters what you do with it.


+1


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## My Own Advisor (Sep 24, 2012)

m3s raises some good points....

1. "I believe people keep working because ego." Somewhat true I bet! They have people to impress...

2. "Many studies about happiness describe an appreciation for the simple things in life..." Totally agree. Unfortunately many 'working stiffs' as you put it are far too busy to appreciate the great things life offers. 

3. "Some people are really missing out on the world." Also lots of truth to that. This is why for us we try and take a balanced view on things. Could we 'retire' now and live in a one-bed apt.? Yes. Do we want to? No. Could we 'retire' now and live frugally, no car, walk; bike, etc. and not travel? Yes. Do we want to? No. 

I believe balance in life is good, if not great. Whatever that is for you, you need to define it and be comfortable in your skin in it. Otherwise, the extremes will wear on you and break you down.


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## james4beach (Nov 15, 2012)

Yeah, money may not buy happiness, but if I had enough money right now to quit working and go to sunny beaches, I bet you that I would be happier than I am right now


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## TomB19 (Sep 24, 2015)

My Own Advisor said:


> I stand by my comment that 95% of Canadians (maybe not all CMFers!
> 
> 
> 
> ...


$1M of today's money at age 60 is considerably better than $1m of today's money at age 50 or earlier. That's a whole different ball game with cpp and less years to fund. By age 60, each year you wait makes a big difference.

Retiring at 45 is the same as retiring at 30. Both reqire finances that are self sustaining and resistant to inflation.

I'm 50 and it appears I should have no problem drawing down at 5%. Even 6% would be no problem unless things really go haywire. Of course, it would be reckless to begin at that level.


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## ykphil (Dec 13, 2009)

It really depends on lifestyle and the things that are important in retirement. For some, it means going on a cruise a couple of times a year. Some will enjoy traveling and exploring European cities. Others will enjoy a fast-paced and active city life, the arts, theatre and music scene, or eating out often. For my wife and I, a life of luxury means spending as much time as possible outdoors: tent camping in secluded places, hiking, kayaking, mountain biking, gardening, road trips. And I hate flying, not surprisingly as I was at one point working for a major airline and we had more than our share of international travel. We rarely if ever eat out, as we have more pleasure preparing our dinner on a Coleman camping stove or camp fire in the middle of the Utah desert than we would eating in a Michelin-rated restaurant in Paris. This means that our actual spending is much lower than most, and indeed is currently well below $22,000 per year, by choice, not by obligation. 

We own a mortgage-free condo in Calgary that we will be selling soon so we can build a very small home/workshop on a 4-acre wooded lot we own on one of the Gulf Islands. Home will be off-grid (well, septic, solar). Our total annual housing expenses, including electricity, insurance, taxes, maintenance, are currently $6,000 but will go down to $3,000 once we are on the island. Vehicle insurance, registration, licensing, and maintenance for our gas-guzzler camper van used only for travel, top $2,000 a year. Our total food cost for 2 currently amounts to $6,000 per year but will likely decrease once we move to the island and subtract what we will grow and harvest (clams, salmon, crab, deer. Add another $1,000 for clothing and miscellaneous, and I am at around $12,000 for basic needs. Communication-wise, we do not have internet or cable but use two Mexican cell phones with data plans and no roaming fee in Canada, the USA and Mexico for $10 per month each, enough for our limited needs. Starting last year, we drive to Mexico in the early fall and spend 6 months there, mostly camping. For next year, we are renting a one-bedroom fully-equipped beach studio, a block from the ocean in a little beach town on the Pacific for $500 per month ($3,000), including all utilities and internet. Food and enough beer and licor the cana is much cheaper there than in Canada and is already included in my annual budget. Add another $2,000 for our annual roundtrip, including gas and Mexican auto insurance. Total for year: $17,000. Let’s add another $5,000 for replacing a kayak or a mountain bike once a year, medical travel insurance, and/or a bit of entertainment (not sure what but let’s just have a buffer for the sake of it), and we are at about $22,000. I am sure I am forgetting something but it wouldn’t add much on our budget.


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## gibor365 (Apr 1, 2011)

james4beach said:


> Yeah, money may not buy happiness, but if I had enough money right now to quit working and go to sunny beaches, I bet you that I would be happier than I am right now


James , and how much do you need?!


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## gibor365 (Apr 1, 2011)

> ... I believe people keep working because ego ...


 Interesting point 

When we went to adult only, probably one of the most expensive resorts in the world resort in Mexico (6K + for couple for a week) (peoiple who is coming there, mostly lawyer, doctors, prinicples of private schools and so on) and during different "activities" was telling other guys that I'm semi-retired - others were telling "cool" etc .
When i was telling the same at Cuban average + resort, others were looking at me like I'm some homeless , even though I earn in dividends/interest more than they per year ....
One guy was telling, "even my mother in law who is 70+ works part time"
Obviously, I don't give a **** about impressing other people, but some might ...


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## TomB19 (Sep 24, 2015)

gibor365 said:


> James , and how much do you need?!


I think James may be in IT. I'm not sure.

If so, I expect he will get out of the industry ASAP. It's not a good sector to work in, any more.


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## TomB19 (Sep 24, 2015)

We have quite a few vacations on our bucket list. They range from expensive Australia/Paris vacations to affordable Mexico / visiting friends and family in US.

It has occurred to me that it would make sense to engage in the more affordable vacations first, and let our holdings grow, rather than knock down our nest egg with two weeks in Paris straight out of the retirement chute.


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## james4beach (Nov 15, 2012)

gibor365 said:


> James , and how much do you need?!


I think I need about 1.5M to stop working. Maybe I could do it with 1 M?



TomB19 said:


> I think James may be in IT. I'm not sure.


I'm an electrical/computer engineer working in tech/scientific research. But our company is basically government funded so I'm more or less a US govt funded researcher. It's like working at Lawrence Livermore National labs. A Canadian equivalent would be a research job at National Research Council (NRC). Funding at NRC was slashed under Harper, but I hear it might be coming back now.

So I don't know much about IT or web technologies, but I'm reasonably good with computers.

This is such a nice job currently, but also so specialized, that I don't really know where I go next. I have not been able to find a job like this in Canada... because unlike the the US, Canada does not pump billions of $ into scientific research.


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## gibor365 (Apr 1, 2011)

> It has occurred to me that it would make sense to engage in the more affordable vacations first, and let our holdings grow, rather than knock down our nest egg with two weeks in Paris straight out of the retirement chute.


 You maybe surprised , but in many cases trip to Paris/around the France can br cheaper than ridiculous expensive trip (flight, accommodation, car rent ) to AB


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## agent99 (Sep 11, 2013)

james4beach said:


> I think I need about 1.5M to stop working. Maybe I could do it with 1 M?


How much will someone who is, say 30 now, need to save each month in order to accumulate that 1million or 1.5million of 2017 dollars? I think that is a tougher question. 

This TD calculator might help. https://tools.td.com/retirement-calculator/results.html

Say the 30 yr old is earning $40k/yr and has not saved anything yet. They want to get to MOA's $1million and $50k/yr withdrawal rate. They assume they can earn 4% on investments. I don't see how calculator takes into account inflation, job growth etc. But moving on:
The calculator says you will need $1.67million at 4% return, not $1million if you want to draw $$50k/yr. So using that:
It says you will need to save say, $1000/month in RRSP and $500/month in other to get to that $1.67million. That is $18,000 per year of $40k/yr before tax. Maybe 75% of your take home pay! 
That clearly won't work. Need to set sights lower!

I am sure there are better calculators and some will use more aggressive estimates of returns. But regardless, it is tough to save enough to get just $50k/yr at retirement.

Scotia assume 3% inflation and 4.8% return (1.8% Real) They also include CPP/OAS in the desired income of $50k. They say required saving is $1.75 Million and savings needed just under $1100/month. 
http://www.scotiabank.com/ca/en/0,,10232,00.html#scenario-1


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## mars (Mar 11, 2014)

It really comes down to the lifestyle that you want to live in retirement. I've done some research and have also talked to my older siblings who are retired to get an idea of how much their lives changed in retirement. The answer shouldn't surprise many people but you really don't change your lifestyle a lot in retirement. The first couple of years you may travel a little more but that subsides. As for working, sometimes I think people continue to work because they just don't know how they will fill up the time if they don't go to work, which is a problem, you really need to try and find things to do outside of work that you enjoy. I never had that problem even when I was young, I can always find things to do with my time.

As for living off a $1m per year, it depends on the above, what do you plan to do with your time, not everything costs money. It should be easy to make $40k a year in dividend income, even the Canadian banks pay almost 4% in dividends. From research I did in the past you can make around $47k in any Canadian province and not pay any taxes on dividend income and this is equal to making about $80k while working after you deduct all the taxes, CPP, EI, workers comp, etc. etc. etc.

I have been tracking my expenses over the last 4 years and I spend around $40k plus or minus a couple thousand and I don't believe I am depriving myself of anything. Golf anywhere from 20 to 35 rounds a year, live in Toronto, go on 2 or 3 trips a year, eat what I want, go out to lunch with friends, drinks once in a while. I take in a ball game or hockey game once in a while but don't have season tickets. 

I was working up until a little over a year ago and when the company restructured I found myself out of work so I got to try a couple of things I had been thinking about with regards to investing and the amount of money required to make a decent living. It took me a while to get everything set up last year with regards to my accounts so I do not have good data from last year, but so far this year I am tracking to make over $70k per year on dividends and options (covered calls and puts) and this is with only $500k so with a million I think I could double up, or at least $100k per year. Since I actually enjoy trading and studying the market, I treat it a little like my new job.

I've actually been thinking of selling my house in Toronto and taking the money and moving east. Unlike some, most of my family is back east, I moved here for work many years ago, but still go back east every year because that is still home. I have looked at properties out east and the house you can get out there is incredible for the price. Many are in the $200k to $300k range but if you go up into the $400k to $500k range you are buying properties that would be in the $2m to $3m range in Toronto. If you don't want the hassle of owning a house, you can get some very nice condos for under $200k for around 1500 sq ft, not the 400 sq ft closets you get in Toronto.

Like everyone, I've been looking at the pluses of continuing to live in Toronto versus moving east. Not everyone has the same priorities or desires so retirement and the amount required is really an individual call.


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## My Own Advisor (Sep 24, 2012)

james4beach said:


> I think I need about 1.5M to stop working. Maybe I could do it with 1 M?
> 
> 
> 
> ...


I think if you had $1 M in thirds, for sake of argument (non-reg. + TFSA + RRSP) games in your favourite XIU + VYM + IDV that would be "enough" money. Those ETFs would churn out at least 3% cash for life.


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## mordko (Jan 23, 2016)

gibor365 said:


> You maybe surprised , but in many cases trip to Paris/around the France can br cheaper than ridiculous expensive trip (flight, accommodation, car rent ) to AB


Don't know about AB but for the same price the quality of restaurant meals and accommodation is better in Toronto than it is in Paris. And dealing with car rentals is far more pleasant in N America.


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## mordko (Jan 23, 2016)

m3s said:


> I probably achieved more such things in my 20s than many working stiffs will in their 50s.
> 
> I believe people keep working because ego... Many studies about happiness describe an appreciation for the simple things in life, an acceptance of reality, comfort with oneself, independence from culture and free from reliance on others etc.


Not sure if feeling "happy" is the best objective. Bipolar people can feel very happy (depending on the type of mania) and kids with the Down syndrome seem very comfortable with themselves. Certain chemicals in the brain induce happiness, which is of course where the fondness of drugs comes from. Independence from culture and appreciation of simple things come very easily with enough cannabis. We are already a very happy country, and about to become even happier.

Traditionally people have worked so they can pay for accommodation, feed and dress their families. And, yes, to satisfy personal ambitions. Is ambition or "ego" really a bad thing? Shouldn't we have stayed in the caves? Something tells me life won't be all that happy in a hypothetical country where people quit jobs at 35 and then retire until death at 100. 

Of course lack of ambition and perception that people work "because of ego" is a popular view among many young native-born Canadians. One can see it by looking at university intakes at prestigious universities for professions which require a bit more hard work. Such disciplines are usually full of kids from immigrant families.


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## kcowan (Jul 1, 2010)

TomB19 said:


> I'm 50 and it appears I should have no problem drawing down at 5%. Even 6% would be no problem unless things really go haywire. Of course, it would be reckless to begin at that level.


Known as VWR (variable), several of my friends are doing 6% until age 60, then 5% until CPP/OAS, then 3%. I did the same and, after 15 years of retirement, I am down to 1.8% of current portfolio. I can now officially live forever! Fortunately that has been fueled by above average market returns.

The friends who retired at 55 in The Beach are now considering selling and moving to Collingwood. They are close to their kids but find the kids enjoy coming to them, both in Canada and in Mexico.


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## kcowan (Jul 1, 2010)

gibor365 said:


> Obviously, I don't give a **** about impressing other people, but some might ...


Being confident in yourself and not what you do is the key to happy retirement. When we can honestly say that we choose not to have the big car, we are happy. If the people don't believe us, they were not friends anyway.


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## mordko (Jan 23, 2016)

My brother in law retired in his 40s. Without education, he worked very hard and achieved quite a bit. He retired as a VP at a small but very well known investment bank. His wife was also high up in the corporate world. They now have houses all over the world and split time between several countries and generally focus on golf and clubs. No kids, a small hypoallergenic dog and no time wasted on silly things like cooking. They seem satisfied but also obsessed about a whole bunch of insignificant tiny little things. 

My great uncle worked hard as an engineer for as long as he could (until 75). He loved his job. He was 90 this year, surrounded by the loving family. Never really seemed happy after he retired. 

Where am I going with this? Everyone is wired differently but there is something wrong with retiring at 30 and spending most of ones life without a real objective. Even those leaving atrocious office jobs in their 50s must surely have some projects and aims other than migrating between Florida and Canada and keeping the health benefits?


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## kcowan (Jul 1, 2010)

mordko said:


> Don't know about AB but for the same price the quality of restaurant meals and accommodation is better in Toronto than it is in Paris. And dealing with car rentals is far more pleasant in N America.


If you think Toronto offers more value than Paris, then I am sure you can retire early!


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## gibor365 (Apr 1, 2011)

kcowan said:


> If you think Toronto offers more value than Paris, then I am sure you can retire early!


True . And everyone has his own taste... We've travelled practically through all France and enjoyed it (include food) much much more than Toronto. . Never rented car in Canada, but some time ago checked the prices in AB and Maritimes, found that to rent in Europe is much cheaper. Several times was renting in US, didn't find any difference between renting in US or in Paris or Frankfurt.
The only place in NA where I really enjoyed food, was in Quebec City


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## Spidey (May 11, 2009)

Family composition and dynamic make a big difference to how much you can live on. While I can live very frugally, I wanted to provide my 3 kids the opportunity to go to university (something that I never had). Two of my 3 have already been through post-secondary and are now on their own but the youngest is in the 1st year of bio-med. I also would like to be there if some day they need help with a wedding. So for just my wife and I, yes we could probably live on $40,000 dividend income and a paid-off house and even fit in some extras like travel. But with 3 kids - no.


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## mordko (Jan 23, 2016)

kcowan said:


> If you think Toronto offers more value than Paris, then I am sure you can retire early!


Restaurants in Toronto are miles better, unless you go to $200/meal and then they are equivalent. If you want real French food, Paris is the last place to try it; none of it is genuine and all of it is targeting expectations of the dumbed down tourist market until you get to over 100 euros. Paris has great architecture and museums and a more impressive crime scene but I wouldn't want to retire in either Toronto or Paris.


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## gibor365 (Apr 1, 2011)

> If you want real French food, Paris is the last place to try it


 I wouldn't agrue . For example, I liked food much more in Normandy, Britanny, Dordogne than in Paris or Alcase....
I also wouldn't like to retire in Paris (as I said before, malaga area is more appealing to me), even though I;m fine with GTA.... However, I'd like to go to a long term vacation in France, esp. Chamonix area


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## Eder (Feb 16, 2011)

kcowan said:


> If you think Toronto offers more value than Paris, then I am sure you can retire early!


Glad you said it first...I find it hard to believe anyone would choose Toronto over much more cosmopolitan locations.


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## Spidey (May 11, 2009)

Off topic but I also was disappointed with French restaurants, even outside of Paris. Perhaps my expectations were too high but I often thought I could get something better in Canada and I would definitely get better service at home. Some of the pricier places specialize in a lot of weird stuff, like kidneys, brains and such which just isn't my cup of tea. The small local restaurants offer good value for a 3 course meal with wine so we usually found those to be our best bet.


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## mordko (Jan 23, 2016)

gibor365 said:


> I wouldn't agrue . For example, I liked food much more in Normandy, Britanny, Dordogne than in Paris or Alcase....
> I also wouldn't like to retire in Paris (as I said before, malaga area is more appealing to me), even though I;m fine with GTA.... However, I'd like to go to a long term vacation in France, esp. Chamonix area


Yes, regions offer much better food, and the styles vary a lot between provinces. Even Berlin offers much better French food than Paris.


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## mordko (Jan 23, 2016)

Malaga isn't my cup of tea; I would go a bit off the coast for a holiday but wouldn't want to spend more than a couple of weeks anyway.


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## gibor365 (Apr 1, 2011)

> Some of the pricier places specialize in a lot of weird stuff, like kidneys, brains and such which just isn't my cup of tea.


 On opposite, I like such stuff 



> Yes, regions offer much better food, and the styles vary a lot between provinces


 This is what Iliked . Normandy - amazing sea food, Dordogne - fuagra, snails etc...


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## gibor365 (Apr 1, 2011)

mordko said:


> Malaga isn't my cup of tea; I would go a bit off the coast for a holiday but wouldn't want to spend more than a couple of weeks anyway.


The nice thing about Malaga , it's also location. Close to Sierra Nevada where you can do skiing, excellent public transportation (easy travel to Sevilla, Granada, Cordova, Cadiz etc). Can drive to Portugal. Cheap flights to any European city, good weather and food, cheap (can rent condo for 300 EUR/month).



> Even Berlin offers much better French food than Paris.


 Actually in Germany/Austria (even though I like it a lot) wasn't too impressed with food (yes, excellent beer and sausages ), liked Czech Republic much more


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## agent99 (Sep 11, 2013)

gibor365 said:


> The only place in NA where I really enjoyed food, was in Quebec City


There are many places in Montreal that are equally good. But not the Old Montreal tourist traps. For really excellent and unique food in NA, you can't beat Louisiana. Again skip the French Quarter tourist traps.


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## gibor365 (Apr 1, 2011)

agent99 said:


> There are many places in Montreal that are equally good. But not the Old Montreal tourist traps. For really excellent and unique food in NA, you can't beat Louisiana. Again skip the French Quarter tourist traps.


Maybe  I'm not an expert on Montral food , jusy I like it in Quebec City (and in one small town 1.5 hours drive East of Quebec City) more ....


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## mordko (Jan 23, 2016)

There are superb restaurants in Toronto and all the larger towns around Toronto. 

In general N America does offer a lot of crap food but also plenty of restaurants that beat anything one can find anywhere in Europe. And it doesn't have to be New York, Montreal or New Orleans. There are some truly awesome BBQ joints in places like Tennessee, Alabama or South Carolina.


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## m3s (Apr 3, 2010)

mordko said:


> Of course lack of ambition and perception that people work "because of ego" is a popular view among many young native-born Canadians. One can see it by looking at university intakes at prestigious universities for professions which require a bit more hard work. Such disciplines are usually full of kids from immigrant families.


It's also a fundamental theory of psychology taught to every university first year probably around the world. The caveat though is it claims people need to fulfill their self esteem with status, recognition, fame, prestige, attention, respect etc before truly moving up to self-actualiztion. Some millennials may be trying to skip this esteem step and if Maslow was correct they are leaving a crucial void unfulfilled.

I have a younger brother who skipped college to travel across the country and live the good millennial life (looks a lot like the good hippy life with different clothes) He is very artistic, talented, resourceful and independent but I can see the void of esteem as he doesn't get the recognition expected and is looked down on by the old working stiffs. I wouldn't say he has a lack of ambition but definitely an aversion to work.

On the other side though I perceive many longtime working stiffs trap themselves into the esteem level for far too long. They may keep working only to maintain a status and image but this is all focused on impressing others rather than being true to oneself. They are narrowly focused on cultural expectations and they wouldn't know what to do with their free time if they stopped working. This is truly tragic.

I don't believe you have to work a set amount of decades to have "stories to tell the grandkids". Like I said I feel I accumulated more than enough "war stories" in my 20s. Few people truly care about the content of your stories rather than how you tell them anyways. I agree though they are critical to proving something to yourself and your confidence with yourself. It's a fundamental need but not a place to trap yourself forever.



ykphil said:


> For my wife and I, a life of luxury means spending as much time as possible outdoors: tent camping in secluded places, hiking, kayaking, mountain biking, gardening, road trips. And I hate flying, not surprisingly as I was at one point working for a major airline and we had more than our share of international travel. We rarely if ever eat out, as we have more pleasure preparing our dinner on a Coleman camping stove or camp fire in the middle of the Utah desert than we would eating in a Michelin-rated restaurant in Paris. This means that our actual spending is much lower than most, and indeed is currently well below $22,000 per year, by choice, not by obligation.


Thanks for your insightful post. I suppose I am blessed to have similar interests and experiences. I have met or read of many people living this simple lifestyle who claim about $50/day plus capital expenses. I already live on about $40k and don't feel I neglect myself from anything (on the contrary I feel I have a lot more than I need really) For this kind of lifestyle $1M is probably more than sufficient


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## tygrus (Mar 13, 2012)

Your grand kids wont care about your working stories, so do whats right for you. Rotting away in a job as a badge of honor is a waste of time.

Travel is a funny thing. Some people like getting on a plane to a new destination every few months. For the little bit of international travel I have done, I didnt like it. I found the huge crowds and congestion in other cities and countries really took away from the experience. You cant understand how few people we have and freedom until you have been to Asia. I would like to see some of the historical sites in Europe then I am probably ok with Canada and a few US trips a year for the rest of my life.


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## TomB16 (Jun 8, 2014)

tygrus said:


> Your grand kids wont care about your working stories, so do whats right for you. Rotting away in a job as a badge of honor is a waste of time.
> 
> Travel is a funny thing. Some people like getting on a plane to a new destination every few months. For the little bit of international travel I have done, I didnt like it. I found the huge crowds and congestion in other cities and countries really took away from the experience. You cant understand how few people we have and freedom until you have been to Asia. I would like to see some of the historical sites in Europe then I am probably ok with Canada and a few US trips a year for the rest of my life.


How is it that you feel you need $5M for that lifestyle?


Fresh out of high school, my first day in Engineering Design Graphics at university, a professor said to the class, "Any number of people can build a structure that will hold a given amount of weight but it takes an engineer to build a structure that will just barely carry it."

It seems to me that we should be financial engineers. Folks in these forums should have the skills and confidence to build a financial program that will take care of our needs with little waste. My goal is for my wife and I to die with the least amount of money in the bank possible. We have no children so we have no need of a legacy. As for charity, that's where it will go but I'm hoping to take care of that while I'm alive, instead of waiting until I'm gone.


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## humble_pie (Jun 7, 2009)

mars said:


> It took me a while to get everything set up last year with regards to my accounts so I do not have good data from last year, but so far this year I am tracking to make over $70k per year on dividends and options (covered calls and puts) and this is with only $500k so with a million I think I could double up, or at least $100k per year.




i believe the option income projections above are somewhat misleading ...

at the 4% return you propose as doable for dividends, a $500k portf would bring home $20k in dividends per annum. Since you mention you are "tracking" $70k from a combination of dividends & options trading, this must mean you expect your option portfolio to earn $50,000.00.

to obtain premium this high (50k on 500k underlying stock) one would have to be selling calls & puts that are very close to the money. This in turn implies high levels of risk, plus constant assignments, especially in the puts with their concomitant margin impairment risks, not to speak of constant re-buying of stocks that have soared past their assigned option strike price, therefore the trader can only purchase a lesser number of shares.

a strategy like this can actually abrade or erode capital, as many option-selling ETFs have learned to their sorrow. It's not a sensible strategy for a retired senior seeking to augment income, imho.

according to yourself, you have been trading options since june 2016. This is 10 months, so i'm not sure how you arrive at your annualized option trading return.

http://canadianmoneyforum.com/showt...a-high-level?p=1278914&viewfull=1#post1278914


if you continue this close-to-the-money strategy for 10 years, i believe it is unlikely you will see a 10% annual return from options alone. A sustainable figure across a decade might be in the 3-5.5% range. Something roughly equivalent to dividend income.

options plus dividends at $20,000 each, from a $500k portf, might yield $40,000 on a current basis. Coupled with OAS & CPP, a retired person living in a zone with moderate housing costs could manage well.

on a $1M portfolio, a party using options to augment regular investment income could manage famously. That extra 30-40k from option selling will put him over the top.


.


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## mordko (Jan 23, 2016)

m3s said:


> It's also a fundamental theory of psychology taught to every university first year probably around the world. The caveat though is it claims people need to fulfill their self esteem with status, recognition, fame, prestige, attention, respect etc before truly moving up to self-actualiztion. Some millennials may be trying to skip this esteem step and if Maslow was correct they are leaving a crucial void unfulfilled.
> 
> I have a younger brother who skipped college to travel across the country and live the good millennial life (looks a lot like the good hippy life with different clothes) He is very artistic, talented, resourceful and independent but I can see the void of esteem as he doesn't get the recognition expected and is looked down on by the old working stiffs. I wouldn't say he has a lack of ambition but definitely an aversion to work.


The word we are looking for is "spoilt".

On a macro scale, can you imagine those in their 20s feeding the rest of the country who is either wearing nappies or has retired? People between ages 20 and 30 make - let us guess - 5% of the population. Is it really fair to expect 1 person to provide for 19? Is it even moral - not to mention realistic? If enough people lose all ambition then the economy will implode, "free" medicine and CPP and the whole set of assumptions behind the "retire at 30" movement will go up in smoke. 

Putting practicality aside... I did OK in the 20s and early 30s - judging by the number of citations and things that got done. The account shows 2.5 times the $1M the OP is talking about. However since my 30s, I allowed myself to get dragged into production of useless paper, albeit for a lot more $s - and got bored as a result. So, now in my 40s, I am shaking things up. Still can't imagine doing nothing, not having any ambition, any purpose or sense of achievement going forward. 

Guess everyone's different.


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## tygrus (Mar 13, 2012)

humble_pie said:


> a strategy like this can actually abrade or erode capital, as many option-selling ETFs have learned to their sorrow. It's not a sensible strategy for a retired senior seeking to augment income, imho..
> .


The ETF Ishares Covered Calls Banks FIE.to has traded between $6.50-7.50 for many yrs now and it throws off 6-7% yield with covered calls strategy executed by experts. Certainly not 10% but not nothing sneeze at and it hasnt imploded yet.


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## tygrus (Mar 13, 2012)

TomB16 said:


> How is it that you feel you need $5M for that lifestyle?


I base that on never touching the principle - no withdrawl. Yield only. And then off to my kids because they will hit the job market at a time when old fogies are breaking the system and automation is stealing jobs.


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## Eder (Feb 16, 2011)

mordko said:


> . Still can't imagine doing nothing, not having any ambition, any purpose or sense of achievement going forward.
> 
> Guess everyone's different.


 
I my opinion I''m prouder and more satisfied with my achievements accomplished since retirement. I guess now I can pursue what I chose to do rather than chasing a buck.


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## humble_pie (Jun 7, 2009)

tygrus said:


> The ETF Ishares Covered Calls Banks FIE.to has traded between $6.50-7.50 for many yrs now and it throws off 6-7% yield with covered calls strategy executed by experts. Certainly not 10% but not nothing sneeze at and it hasnt imploded yet.




to the best of my knowledge FIE's correct name is "iShares Canadian Financial Monthly Income ETF." It distributes income from an array of investments including common & preferred shares, bonds & derivative products in many sectors other than banks.

this fund would use synthetic products to boost income or total return in the same way that countless other funds do. However it is not a classic covered call strategy ETF. It appears you may have mis-named this ETF.

.


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## m3s (Apr 3, 2010)

mordko said:


> On a macro scale, can you imagine those in their 20s feeding the rest of the country who is either wearing nappies or has retired? People between ages 20 and 30 make - let us guess - 5% of the population. Is it really fair to expect 1 person to provide for 19? Is it even moral - not to mention realistic? If enough people lose all ambition then the economy will implode, "free" medicine and CPP and the whole set of assumptions behind the "retire at 30" movement will go up in smoke.


I imagine the majority of the 19 are doing menial jobs that could, and eventually will, be replaced by automation and robotics. Young people seem to get this and old people seem appalled that a robot will take their mindless job. How society will adjust is yet to be seen but just like the industrial revolution and many before, it will change again. Maybe with a basic income and/or more leisure time for all. It doesn't really correlate with ambition because people can do many constructive things besides menial tasks or clocking office time for the sake of societal expectations.


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## gibor365 (Apr 1, 2011)

mordko said:


> There are superb restaurants in Toronto and all the larger towns around Toronto.
> 
> .


Can you name superb restaurant in Mississauga (I think 5th biggest Canadian city) or Oakville?!


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## james4beach (Nov 15, 2012)

kcowan said:


> Known as VWR (variable), several of my friends are doing 6% until age 60, then 5% until CPP/OAS, then 3%. I did the same and, after 15 years of retirement, I am down to 1.8% of current portfolio. I can now officially live forever! Fortunately that has been fueled by above average market returns.


Very nice! I think going with variable withdrawals is the best idea... those limitations of fixed withdrawals and portfolio depletion come from forcing fixed extraction during very bad years.

Variable withdrawal should be much more sustainable, but the flip side is that you will really have to tighten your belt during horrible years in the market. This scenario has not happened in a long time, so it's easy for us to forget about what that might look like. 2008 was not an example; the market bounced back in just one year.


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## agent99 (Sep 11, 2013)

tygrus said:


> The ETF Ishares Covered Calls Banks FIE.to has traded between $6.50-7.50 for many yrs now and it throws off 6-7% yield with covered calls strategy executed by experts. Certainly not 10% but not nothing sneeze at and it hasnt imploded yet.


FIE portfolio includes about 1/3 in corporate bonds and pfd share etfs. The rest is 6 banks+SLF+PWF. The distribution includes ROC (your own money). Since inception, Total Return is about 8.5% vs 11% for XFN over same period. So roughly same if you factor in the bond/pfd return so not clear what good the covered calls do. 

G&M had an article about this ETF (I owned it for about a year but sold once learned more about it)

http://www.theglobeandmail.com/glob...fs-yield-too-good-to-be-true/article32373227/

It's not altogether bad, but really just another financial product to sell to yield hawks.


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## james4beach (Nov 15, 2012)

tygrus said:


> The ETF Ishares Covered Calls Banks FIE.to has traded between $6.50-7.50 for many yrs now and it throws off 6-7% yield with covered calls strategy executed by experts. Certainly not 10% but not nothing sneeze at and it hasnt imploded yet.


I don't understand the appeal of FIE. The 5 year annual return is 9.90% vs XFN's 12.61%. Since FIE's creation, it has done substantially worse than the non-option financial index ETF.

Those figures include all distributions.


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## humble_pie (Jun 7, 2009)

james4beach said:


> I don't understand the appeal of FIE. The 5 year annual return is 9.90% vs XFN's 12.61%. Since FIE's creation, it has done substantially worse than the non-option financial index ETF.
> 
> Those figures include all distributions.



FIE is not a dedicated covered call strategy ETF. The Tyg has mis-named it. FIE is just another run-of-the-mill hi-yield vehicle boosting returns with the usual mechanisms. Usual being a repertoire of derivatives plus ROC. 

if you read the globe article cited by agent99 just upthread, it highlights overuse of ROC by this fund.

.


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## mars (Mar 11, 2014)

humble_pie said:


> i believe the option income projections above are somewhat misleading ...
> 
> .


You are correct it is a little misleading, I was projecting first quarter results into a full year. This may not be sustainable as I had a few very good picks in the first quarter that I wrote option contracts on during that time. I wouldn't say it was all luck as I did have a method to my madness as the saying goes. I was watching specific stocks that when they dropped because of a specific reason and their volatility spiked I would sell puts, if I felt they were dropping more on quick sentiment as opposed to fundamentals. Some of the stocks I did very well with in the first quarter were Alibaba, First Majestic, Agnico Eagle, and Franco Nevada. Without referring back to my notes I cannot remember what happened with each individual stock but I do remember BABA dropped into the $89 range and when I looked at it I felt it was a better stock and it was just a temporary drop so I sold some puts close to the money and they paid of extremely well.

Similar with dividend and covered calls. I have stocks that I watch and if they take a drop I will update my notes and see if I think it is a temporary drop or I think it is something more permanent. I puck them up if I believe they are still a good company and because I pick them up on temporary drops my dividend per share is better and once they go back up I will write a covered call on the way up when the premium is better. So far I have only had one called away and that was because it took a big jump on me. I didn't like to see it go but it had already provided me with great gains, PBH. 

So like I started out, my first quarter results may not be sustainable over the long term, and I have noticed that April is slower than the first quarter and from history I noticed the summer months are a little slower as well.


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## james4beach (Nov 15, 2012)

If I was trying to live off $1 million, I'd probably invest it in a permanent portfolio allocation. On the stock side I'd go heavy on TSX eligible dividends (probably XIU) due to the tax efficiency. Then I would live off this portfolio with variable withdrawals, and I wouldn't hesitate to sell shares as needed, including selling from the bond and gold allocations of course.

The appeal of the PP for this purpose is the low volatility and high resilience to sequence of return risk. Additionally, by construction, it has resilience to the potential horror scenario of dual bear markets in stocks & bonds.

Low volatility --> low sequence of return risk --> well suited for withdrawals --> capital lasts longer

http://canadianmoneyforum.com/showt...t-allocation?p=1521962&viewfull=1#post1521962
View attachment 14450


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## tygrus (Mar 13, 2012)

There is just something wrong about putting a million dollars into a volatile place and getting a walmart greeters wage back from it.

On our farm, we are earning double digit returns. The land goes up by inflation or more, its paid down by 3.5% interest each yr and throws off anywhere from 5-15% return in between. I am better off to invest in my business than look anywhere else for return.


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## mordko (Jan 23, 2016)

gibor365 said:


> Can you name superb restaurant in Mississauga (I think 5th biggest Canadian city) or Oakville?!


Let's do Oakville: Buca Di Bacco (excellent comfort Italian food, live music); Jonathans, Olivers and Seasons (these 3 are quite fancy up market restaurants), Julia's (again, a really nice Italian), Corks (more winebarish but nice), Becofino (Italian influence, I like it), Malucca (wine bar but the food is really good), Maros bistro (very rustic but the food is fabulous if you like Middle Eastern flavour). I quite like Colossus (Greek) but its kinda simple, not as impressive as the ones above. 

All of these are excellent. In all of these places the quality of ingredient, the standard of cooking and ingenuity beats anything that Paris or London have to offer until you get to crazy expensive business-level restaurants. Not all that surprising; Paris and London cater to what the tourists expect to see and the tourists don't tend to be fussy + they are never coming back so there is no reason to offer quality.


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## mordko (Jan 23, 2016)

m3s said:


> I imagine the majority of the 19 are doing menial jobs that could, and eventually will, be replaced by automation and robotics. Young people seem to get this and old people seem appalled that a robot will take their mindless job. How society will adjust is yet to be seen but just like the industrial revolution and many before, it will change again. Maybe with a basic income and/or more leisure time for all. It doesn't really correlate with ambition because people can do many constructive things besides menial tasks or clocking office time for the sake of societal expectations.


Yes, industrial revolution. That was when people thought that machines would replace human labour but it didn't turn out like that.


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## gibor365 (Apr 1, 2011)

Don't really like Italian food, gonna check ME/Greek ones... Actually the best Greek restaurant we've ever been was in ...Barcelona 



> Paris and London cater to what the tourists expect to see and the tourists don't tend to be fussy + they are never coming back so there is no reason to offer quality.


 English food is usually sicks , but I don't agree with your statement, as a lot of tourists (include myself) frequently check tripadvisor reviews before going to the restaurant...., but, yes, the French restaurants we liked the most weren't in Paris, one amazing was in small town in Loire Valley, other (in Sarlat) was recommended by Russian guy who was serving food (and it wasb't restaurant were he was working ). Also, we found very good restaurant in Vienna.... In Paris, I rememeber only 1 restaurant we enjoyed in Luxemburg gardens area....
In Europe we also like going to local supermarkets and try some "unknown" food and drinks...


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## mordko (Jan 23, 2016)

English food does not suck, that's just BS, usually coming from people who never been to England or havent been anywhere but London, which is the same thing.


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## gibor365 (Apr 1, 2011)

mordko said:


> English food does not suck, that's just BS, usually coming from people who never been to England or havent been anywhere but London, which is the same thing.


Yes, so far we've been only in London , but my brother lives in Cambridgeshire and not amazed fom British food either... In any case, in summer we planning to visit him (also want to take 4-5 days trip by train to Edinburg), so will have a better idea about ex-London food ...

And what is trditional English food?! Fish and Chips with Mushy Peas? Yorkshire pudding? Yuk 

The problem that myself and my wife have different tastes , I like Eastern European food (Russian, Hungarian, Czech), French, Medditerian amd ME.
My wife likes Thai, Japanese, other Asian ones...
I think the only cousine both of us like is Georgian , but there is only 1 good restaurant in North York and I think it closed now


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## TomB19 (Sep 24, 2015)

I love fish and chips but used to not like it. My position changed when I was working in Mississauga when we would go at lunch to an English fish and chips place. It was amazing.

That was 25 years ago. I wonder if it's still there. I wonder if it is still amazing.


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## mordko (Jan 23, 2016)

The one thing I never found in Canada is fish&chips that is as good as the English version. Tried a few... Maybe I've been unlucky. 

In general, find it peculiar when someone goes on about French cuisine and then rubbishes English food. Many of the best French chefs cook in England (Raymond Blanc is one of them). Then you get some of the most famous chefs in the world who happen to be British (Rick Stein, Gordon Ramsay, Michel Roux Jr). Obviously their restaurants aren't priced for an average wallet but Jamie Oliver is popular across the world and places like this are great, very reasonable and scattered across the country http://www.bridge-hotel.co.uk/the-restaurant.html


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## Pluto (Sep 12, 2013)

tygrus said:


> There is just something wrong about putting a million dollars into a volatile place and getting a walmart greeters wage back from it.
> 
> On our farm, we are earning double digit returns. The land goes up by inflation or more, its paid down by 3.5% interest each yr and throws off anywhere from 5-15% return in between. I am better off to invest in my business than look anywhere else for return.


1. You are comparing passive (investment) income to active employment or business income IE, working the farm. To transform the farm to passive status what would you get if you rented the farm and essentially did no work? 
2. "volitile place": I'm assuming you mean risk of a bear market and paper loss of assets. The risk really isn't in volatility. The risk is in the quality, or lack of quality of companies invested in. If you buy quality, they come back. They survive. Apparently you do not worry about your farm not surviving an economic downturn, eventhough your land value might dip. So look for stocks that have a similiar profile as the farm, and don't worry about volitilty.


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## kcowan (Jul 1, 2010)

Spidey said:


> The small local restaurants offer good value for a 3 course meal with wine so we usually found those to be our best bet.


Yes that is what I was experiencing in Paris. Not the tourist traps. Found many that were superb and inexpensive. We even found take out at local marchees for our hotel room. Granted there are inexpensive dining options in Toronto but very different.


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## kcowan (Jul 1, 2010)

mordko said:


> The one thing I never found in Canada is fish&chips that is as good as the English version. Tried a few... Maybe I've been unlucky.


Richmond BC on the pier. Halibut. Nothing better. Close is a specialty shop in Westchester County NY. They even serve it in newsprint!


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## sags (May 15, 2010)

I am assuming none of you have enjoyed a Lake Erie perch fishfry...........the finest fish dinner known to mankind. :very_drunk:


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## humble_pie (Jun 7, 2009)

mars said:


> You are correct it is a little misleading, I was projecting first quarter results into a full year. This may not be sustainable as I had a few very good picks in the first quarter that I wrote option contracts on during that time. I wouldn't say it was all luck as I did have a method to my madness as the saying goes. I was watching specific stocks that when they dropped because of a specific reason and their volatility spiked I would sell puts, if I felt they were dropping more on quick sentiment as opposed to fundamentals. Some of the stocks I did very well with in the first quarter were Alibaba, First Majestic, Agnico Eagle, and Franco Nevada. Without referring back to my notes I cannot remember what happened with each individual stock but I do remember BABA dropped into the $89 range and when I looked at it I felt it was a better stock and it was just a temporary drop so I sold some puts close to the money and they paid of extremely well.
> 
> Similar with dividend and covered calls. I have stocks that I watch and if they take a drop I will update my notes and see if I think it is a temporary drop or I think it is something more permanent. I puck them up if I believe they are still a good company and because I pick them up on temporary drops my dividend per share is better and once they go back up I will write a covered call on the way up when the premium is better. So far I have only had one called away and that was because it took a big jump on me. I didn't like to see it go but it had already provided me with great gains, PBH.





what i perceive here is someone starting to trade options who has prepared himself very well & is acting logically. In the first few months he's on a roll. This happens sometimes. The good luck doesn't usually last though.

in addition, the type of market we are seeing these months - sideways - favours option selling. It's the soaring/collapsing markets that create havoc for options traders.

however the level of risk & the market timing you are describing are far too high, imho, for most retired persons looking to protect their capital & counting upon sustainable withdrawals for many years to come. Your profile looks fine for an aggressive options trader, but not a retiree.

take those close-to-the-money puts in BABA when stock was $89. Mars, you said you sold "a few." I suppose "a few" might have meant five $85 or $90 puts, something like that.

now suppose BABA had gone the other way, ie down not up. Assignment would have occurred. The margin on a $500k account would have been impaired by $42,500-45,000. This could be a serious event, especially for a retired person looking to preserve capital.


.


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## kcowan (Jul 1, 2010)

james4beach said:


> Variable withdrawal should be much more sustainable, but the flip side is that you will really have to tighten your belt during horrible years in the market. This scenario has not happened in a long time, so it's easy for us to forget about what that might look like. 2008 was not an example; the market bounced back in just one year.


Yes we had just purchased our snowbird condo in 2007 when the recession was upon us. Fortunately, we spent extra time in Mexico during the renovations and found that we saved a ton of money in the process (not counting reno costs) and have never looked back. Then we sublet our penthouse in Vancouver and were rolling in dough. So we spend a month in Europe every year now and still end up saving compared to our budget. We are limited by 212 days out of the country for medicare coverage.


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## gibor365 (Apr 1, 2011)

sags said:


> I am assuming none of you have enjoyed a Lake Erie perch fishfry...........the finest fish dinner known to mankind. :very_drunk:


Perch?! Are you kidding me?! The best ever fish is from Sturgeon family ..

btw, anybody knows good place that serve tartars?


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## Mukhang pera (Feb 26, 2016)

gibor365 said:


> btw, anybody knows good place that serve tartars?


Huns, a few places maybe, when in season. Tartars, no.:smile:


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## Eder (Feb 16, 2011)

Red Fish Blue Fish on harbor by Empress Hotel Victoria....don't buy fish in Toronto or other places away from the ocean..most likely been frozen a few months


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## agent99 (Sep 11, 2013)

gibor365 said:


> Perch?! Are you kidding me?! The best ever fish is from Sturgeon family ..
> 
> btw, anybody knows good place that serve tartars?


Most fish places have Tartar Sauce 

Most restaurants in Canada would serve Tartars (if you meant ethnic Turks)


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## TomB19 (Sep 24, 2015)

Raw fish scares me. I've eaten plenty of sushi but it's all gassed with CO2. Even if it was the most delicious thing I've ever tasted, I can't imagine the risk would be worth it.

I agree with Tygrus that a million dollars in real estate, for someone who knows what they are doing, can produce a serious yield. We always planned to keep some rental property after retirement but now that we are at the door step, it looks like we will sell all of it. As best as I can tell, a really good portfolio will produce roughly 8% average yield over time. This is well below what we've made in R-E over the last 20 years, but stocks don't call you in Mexico to tell you the dryer has stopped working.


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## james4beach (Nov 15, 2012)

Living off real estate income will work for some people but it's a specialized skill. I've run into a few people like this: my aunt, my ex girlfriend's dad, and a friend's parents who run several apartment complexes. Sure, some people can do this!

Not "just anyone" can do it. My parents tried it for about 10 years and it didn't go well. The physical labour, dealing with tenants, and repair challenges did not go well. They found it tiring and unprofitable. Their property didn't even gain too much value despite the real estate bull market.

They later sold that property and put the money in a discount brokerage. They've made close to 5.0% annual return in the decade since then, so it's been both more profitable than their "income property" and much less work.


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## mordko (Jan 23, 2016)

kcowan said:


> Richmond BC on the pier. Halibut. Nothing better. Close is a specialty shop in Westchester County NY. They even serve it in newsprint!


Never been to either but will make sure to check it out if the opportunity comes up. 

Parisian suburbs do have good regional food but anywhere between Eiffel tower and Sacré-Cœur French restaurants serve edible junk at best. That's not counting ethnic cuisine, breakfast food or stuffy places where you are looked at with derision if your tie does not fit the latest local fashion. French restaurants in Berlin are better and in Hong Kong or Tokyo - much, much better than they are in Paris.


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## TomB19 (Sep 24, 2015)

james4beach said:


> Living off real estate income will work for some people but it's a specialized skill.


No argument here. 99.999% of people should not do it.

Anyone who has said, "I'm not going to fix that... it's just a rental house..." should not be in the rental industry. That's pretty much everyone. ... and they wonder why they can't get good renters.

Even now, with a flooded rental market, we have no vacancies. People move in and stay with us forever. In return, we make sure they have a good home. The additional cost to us is negligible and the returns are both awesome and not just monetary.

We have a senior lady in a small house by the park who has kept the house like a show home all these years. Now, she's having some arthritis that keeps her from turning the yard into a botanical garden so my wife went over and planted flowers in her window boxes.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> ...
> Not "just anyone" can do it. My parents tried it for about 10 years and it didn't go well. The physical labour, dealing with tenants, and repair challenges did not go well. They found it tiring and unprofitable. Their property didn't even gain too much value despite the real estate bull market.
> 
> They later sold that property and put the money in a discount brokerage. They've made close to 5.0% annual return in the decade since then, so it's been both more profitable than their "income property" and much less work.


Totally agree, and if they put in a little extra effort they could raise that _"5.0% annual return in the decade since then"_, up to ~10% and leave real estate in the dust. It's far easier to make money in the market than it is to slugging it out as a landlord.

ltr


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## TomB19 (Sep 24, 2015)

10% would not leave real estate in the dust, nor would 20%.


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## like_to_retire (Oct 9, 2016)

TomB19 said:


> 10% would not leave real estate in the dust, nor would 20%.


Wow, 20% profit per year in Real Estate as a landlord over 10 years, including all repair costs and labour and vacancies? Yikes.


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## gibor365 (Apr 1, 2011)

> Most fish places have Tartar Sauce


No, I mean real tartare , I meant salmon, bison, beef, tuna tartare etc


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## Mukhang pera (Feb 26, 2016)

like_to_retire said:


> Totally agree, and if they put in a little extra effort they could raise that _"5.0% annual return in the decade since then"_, up to ~10% and leave real estate in the dust. It's far easier to make money in the market than it is to slugging it out as a landlord.
> 
> ltr


That's an interesting proposition, ltr. 

Let’s suppose that I bought a house in 1990 for $100,000 cash and started renting it out for $1,000/mo. Applying the Bank of Canada inflation calculator, the house is worth $168,000 today and the rent is $1,680/mo. After expenses, but before tax, it’s producing a return of maybe 12% p.a. or so on my original investment, and somewhat less of a return on the current value of $168,000. If I sell that house today for $168,000, can I put that money into the stock market and get a much better return and leave the real estate “in the dust”? That would mean that the $168,000 investment in stocks would at least track inflation and the capital sum increase accordingly, while, at the same time, producing 10% or better. In that scenario, doing no better than inflation, if inflation ran at 3% per year, in 10 years the portfolio would be worth about $190,000 and I would be able to draw $19,000 or so annually from it. That would be superior to the real estate, which, while also inflating to $190,000 and rent inflating to $19,000, there would still be expenses to come out of the rent. And if I read you right, I should be able to expect the portfolio value to easily outstrip inflation. If that is the case, perhaps I should re-think hanging on to as much real estate as I have. That said, some of what I hold is not your ordinary real estate investment such as a rental house. It's in the form of timber-producing lands which is another creature, not much talked about on CMF and it cannot really be compared to a rental property.


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## TomB19 (Sep 24, 2015)

This calculation does not demonstrate an understanding of the dynamics of real estate.

What if you purchased a house in 1990 for $100K by putting $10K down and you increased your payment on the house every year, as the rent increased. The house would be paid off within 11~14 years. I've covered this in another thread.

OK, let's go with the worst case of 14 years. At that point, your house is worth $270K so your initial investment of $10K has turned into $270K.

Further, what if you understood this dynamic sufficiently that you either sold or refinanced the house after 5~7 years, and used the returned money to buy 5 or 6 more houses which you again hold for 5~7 years?

This is the best case scenario. We've been R-E investing for decades and have not made these returns but it's not all that far off, either.

Buying a house with cash and holding it long term will return extreme low returns in a rational market. The power of R-E is in using leverage to multiply the gains.

R-E has plenty of problems but a competent R-E investor can do very well for themselves.

Notes:

- If you have someone else manage your assets, you will not do well.
- If you have someone else do all minor repairs and manual labor, you will not do well.
- If you cannot read people, you will not do well.
- If you do not understand that you have to present a good quality product to get good quality renters, you will not do well.


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## Eder (Feb 16, 2011)

It would be interesting to do the same with RY...leverage 10k to buy 100k of RY stock. So buy 100k RY in 10 years turns into $906,600 with only 10k invested & making the margin payments. (I had to use 1995 to 2005 as the data wouldn't go back to 1990)
So take the 900k to buy 9 million of RY stock 2005 to present...$2,867,000...10k to multi millionaire in 22 years...and no roof to shingle or grass to mow.
ohh...looks like I used USD rather than CAN...add another $600,000 or so gain on forex.


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## TomB16 (Jun 8, 2014)

Indeed. I've thought the same thing.

After all these years, our LTV is really low. We're ready to get out but I thought seriously about re-financing a bit to buy a ton of Dream Global two years ago.

It would have gone extremely well but I was never serious enough to go through with it. I have limited courage for leveraged stock investing.


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## Mukhang pera (Feb 26, 2016)

TomB19 said:


> This calculation does not demonstrate an understanding of the dynamics of real estate.


I take it you refer to my post, commenting on ltr’s post. It was not intended to demonstrate an understanding of the dynamics of real estate.

TomB, I doubt there is much you can teach me about real estate.

In another thread today, you said you purchased your first rental property in 1996. I bought my first while in university in Vancouver in 1976 and I have always owned my principal residence, plus recreational properties and other types of real estate - including at least one rental property (and as many as 7) - continuously since that time. 

My post to ltr was in no way intended to show any kind of sensible modus operandi in real estate investing. But he suggested that one could do much better in the stock market. So, I posited an approach where both would start off on something of an equal footing. 

Leaving aside raising money through a heloc or any other way, stocks are usually paid for in cash and you don’t typically refinance a stock portfolio after 5-7 years to buy more portfolios. So I asked what happens if someone starts off putting $100,000 into a rental property compared to putting $100,000 into a stock portfolio and just letting the two sit there for years. That way, one is not “slugging it out as a landlord”, as per ltr. 

In your post, Tom, you are referring to what a hands-on real estate investor might do, and leverage into more properties, etc. But that involves some slugging. For my own part, I have never found being a landlord, or managing timberlands or any kind of real estate to involve “slugging”. But for those unsuited to it, maybe that’s how it feels.


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## TomB16 (Jun 8, 2014)

Mukhang pera said:


> I take it you refer to my post, commenting on ltr’s post.  It was not intended to demonstrate an understanding of the dynamics of real estate.


OK. Can you explain how unleveraged real estate is relevant?


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## like_to_retire (Oct 9, 2016)

TomB19 said:


> ...We've been R-E investing for decades and have not made these returns...................
> 
> Buying a house with cash and holding it long term will return extreme low returns in a rational market.............
> 
> ...


hehe, TOM - you've convinced me. Real Estate is a bad deal compared to stocks. 

ltr


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## tygrus (Mar 13, 2012)

Tom, while RE is a good deal in select markets and properties, leverage can never out perform compounding.


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## TomB16 (Jun 8, 2014)

I don't understand what that means, Tyrgus?


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## Mukhang pera (Feb 26, 2016)

TomB16 said:


> OK. Can you explain how unleveraged real estate is relevant?


Not sure why I have to explain anything to you. I covered it thus, _supra_: "So, I posited an approach where both would start off on something of an equal footing." Again, maybe you missed my point (not that I care, because I was looking for a reply from ltr and not you) that I was hypothesizing a scenario where one has $100K to put up, all at once. The imaginary investor does not want to get involved with mortgage payments on real estate, or leveraging into second and third properties, etc. Just park the money and leave it there and see what comes back. One parking spot is a single rental property purchased for cash. The other is a stock market portfolio.

So, to put it plainly, "unleveraged real estate is relevant" because my hypothetical made it relevant.


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## TomB16 (Jun 8, 2014)

Mukhang pera said:


> Not sure why I have to explain anything to you.


You don't but I asked nicely and I have been civil.

Thanks for the explanation.


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## redsgomarching (Mar 6, 2016)

mordko said:


> My brother in law retired in his 40s. Without education, he worked very hard and achieved quite a bit. He retired as a VP at a small but very well known investment bank. His wife was also high up in the corporate world. They now have houses all over the world and split time between several countries and generally focus on golf and clubs. No kids, a small hypoallergenic dog and no time wasted on silly things like cooking. They seem satisfied but also obsessed about a whole bunch of insignificant tiny little things.
> 
> My great uncle worked hard as an engineer for as long as he could (until 75). He loved his job. He was 90 this year, surrounded by the loving family. Never really seemed happy after he retired.
> 
> Where am I going with this? Everyone is wired differently but there is something wrong with retiring at 30 and spending most of ones life without a real objective. Even those leaving atrocious office jobs in their 50s must surely have some projects and aims other than migrating between Florida and Canada and keeping the health benefits?


the benefits of being generation xer. 
In today's world you need 50 years experience and masters levels education to get into the mail room at a place like that.


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## Mukhang pera (Feb 26, 2016)

TomB16 said:


> You don't but I asked nicely and I have been civil.


For the most part, yes.

But ya' got my hackles up a bit when you suggested I was misunderstanding some real estate basics. Perhaps that was not intended. I'll take it that no slight was intended and I was perhaps too sensitive.

Your posts make clear you are some savvy and experience when it comes to real estate investing. I am not that dull myself. My post to ltr was not designed to display any erudition in the fundamentals of real estate investing. It was intended to evoke a certain response.


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## kcowan (Jul 1, 2010)

> - If you have someone else manage your assets, you will not do well.
> - If you have someone else do all minor repairs and manual labor, you will not do well.
> - If you cannot read people, you will not do well.
> - If you do not understand that you have to present a good quality product to get good quality renters, you will not do well.
> - If you cannot search and purchase superior stock, you will not do well.


Secrets to RE investing by TomB. Anything else is just market timing and luck.


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## My Own Advisor (Sep 24, 2012)

back to OP.....had some interesting conversations with friends this weekend...Toronto RE came up as did "how much is enough".

Some friends argued you need $3 M or $4 M to retire on in another 20 years. I wasn't convinced. That is a crazy amount of money and most Canadians will never come close. 

Especially given some friends said they only needed $5K per month (net) to live comfortably.

My argument was, anyone who owns their home at age 60 or 65, _especially in Toronto_ + has average CPP and OAS benefits + has $1 M in the bank has done a) very well for themselves and b) has enough to live to at least age 80 without dipping into home equity - assuming spending $5K per month net income and overcoming some inflation of 2% or 3% involved.


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## agent99 (Sep 11, 2013)

My Own Advisor said:


> Especially given some friends said they only needed $5K per month (net) to live comfortably.
> 
> My argument was, anyone who owns their home at age 60 or 65, _especially in Toronto_ + has average CPP and OAS benefits + has $1 M in the bank has done a) very well for themselves and b) has enough to live to at least age 80 without dipping into home equity - assuming spending $5K per month net income and overcoming some inflation of 2% or 3% involved.


So now we have $5k NET per month? $60k after tax? say $70 before tax? That has to be funded from $1Million 1/3 each in taxable/TFSA/RRSP? Today's dollars in all cases. But now it only has to last to 80 (20yrs)

I believe that you will have trouble doing that. This view is based on 14 years of actual retirement experience. I am getting close to 80, and no desire to sell our home just yet! And if we did, where would we stay? Definitely not ready for retirement home! But if we were, cost for couple in Chartwell self catering unit that might suit us could be $5k/month. $60k/yr of after tax income. If the home sale yielded $500k, that invested safely may produce at best $20k/yr (more if you blow kids inheritance in an annuity) So where does the extra $50k come from? That million would have to last another 10 years. In fact, the numbers just don't work out if you want $5k/month at retirement. You need $1.5Million or more.

Problem is, you can't just choose $1million or $1.5million. It will be whatever it is. Then you will choose a retirement lifestyle tha matches your savings. No one seemed interested in commenting when I asked earlier just how many young people will go about saving even $1million these days. But it is a challenge.


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## gibor365 (Apr 1, 2011)

> I am getting close to 80, and no desire to sell our home just yet! And if we did, where would we stay? Definitely not ready for retirement home! But if we were, cost for couple in Chartwell self catering unit that might suit us could be $5k/month.


 This was also my point .You sell your house, but you need to live somewhere, and I bet not many want to live in some regular retirement house.... Yes, you could move to Maritimes to buy cheap house/condo, but it's not so easy, esp when you are close to 80...
This is why I don't count my paid off house as an asset


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## Pluto (Sep 12, 2013)

^
After the crippling of a couple of strokes and you realized you need extended care, you'll count it as an asset.


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## redsgomarching (Mar 6, 2016)

> I am getting close to 80, and no desire to sell our home just yet! And if we did, where would we stay? Definitely not ready for retirement home! But if we were, cost for couple in Chartwell self catering unit that might suit us could be $5k/month.


The 5k a month wouldn't just be for housing costs though there would be a lot more services provided. 

a house is an asset, as per usual gibor sipping his early dementia kool-aid.


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## canew90 (Jul 13, 2016)

agent99 said:


> No one seemed interested in commenting when I asked earlier just how many young people will go about saving even $1million these days. But it is a challenge.


When your talking about young people its impossible to predict what their earning potential might be, but obtaining $1Mil or more is not unreasonable. When we were 49, we only had $125,000 saved, but we had no debt and our house was paid for. So is that an unreasonable goal for a young person? I don't think its too hard to imagine. For the next 15 years we kicked in $20k per year towards our savings. Again, by 49 or 50 many young people should be at the height of their earning power and if they continue to be debt free, $20k per year savings should be obtainable. Investing in conservative investments, say generating 6% to 8% should easily get them to $1Mil by the time they are 65 and generate income of at least $40k to $50k per year. Add cpp\oas and they should easily gross $70-$80k. By maxing tfsa and rrsp they could compound to an even higher return.
So living off #1Mil by age 65 should be ok, without having to sell their house.


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## none (Jan 15, 2013)

redsgomarching said:


> The 5k a month wouldn't just be for housing costs though there would be a lot more services provided.
> 
> a house is an asset, as per usual gibor sipping his early dementia kool-aid.


Well put. So if you have a 10 million dollar house, or a 100K trailer, or no house at all, it doesn't count in how you should risk manage your financial future?

That's just retarded.


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## agent99 (Sep 11, 2013)

canew90 said:


> When your talking about young people its impossible to predict what their earning potential might be...part snipped.... Investing in conservative investments, say generating 6% to 8% should easily get them to $1Mil by the time they are 65


You are right that future earning of a young person are hard to predict. Some will do well, get promotions, etc and achieve their targeted retirement savings. Others may just work in a job where their pay only keep up with inflation. For example unionized workers. 

MOA at first talked about living off $40k or $50k pa. That might be fine for such workers. But how do they accumulate the $1million needed off their union wages? Another example might be those who get laid off due to businesses closing or moving offshore. Any plans they had are out the window and they sometimes can only get low paid jobs. They too will have trouble saving anything.

So just concerned that although some here may be able to save and live off $1million, there are many thousands out there that will never save a million.

BTW: I would love to know about those conservative investments that generate 6-8%


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## Eder (Feb 16, 2011)

My bud is a union guy...his pension in 3 years will be $3500/month...equal to about $800k in investment account. He also owns a 500k house outright & about $450k in RRSP's. I'm pretty sure he's far ahead of most Canadians. Any working stiff with some discipline can do the same over a career of 40 years.


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## agent99 (Sep 11, 2013)

Eder said:


> My bud is a union guy...his pension in 3 years will be $3500/month...equal to about $800k in investment account. He also owns a 500k house outright & about $450k in RRSP's. I'm pretty sure he's far ahead of most Canadians. Any working stiff with some discipline can do the same over a career of 40 years.


It depends on which union. 11million Canadians don't have a workplace pension and many pension plans are in trouble. (about 1/3 of workforce has a RPP)


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## humble_pie (Jun 7, 2009)

lol this must be a first world problem

everyone is arguing whether they will need 1.5 or 2 or 3 million dollars to retire, or whether they will be able to squeak by on a measley $1M

.


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## Dilbert (Nov 20, 2016)

humble_pie said:


> lol this must be a first world problem
> 
> everyone is arguing whether they will need 1.5 or 2 or 3 million dollars to retire, or whether they will be able to squeak by on a measley $1M
> 
> .


+1


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## Mukhang pera (Feb 26, 2016)

humble_pie said:


> lol this must be a first world problem
> 
> everyone is arguing whether they will need 1.5 or 2 or 3 million dollars to retire, or whether they will be able to squeak by on a measley $1M
> 
> .


Me too. I'll throw in a +1.

I lived in S.E. Asia for a spell, where millions of people would be unlikely to achieve lifetime earnings of $100,000, never mind lifetime savings of $1 million. Definitely a first world problem.


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## redsgomarching (Mar 6, 2016)

Eder said:


> My bud is a union guy...his pension in 3 years will be $3500/month...equal to about $800k in investment account. He also owns a 500k house outright & about $450k in RRSP's. I'm pretty sure he's far ahead of most Canadians. Any working stiff with some discipline can do the same over a career of 40 years.


pensions are becoming a thing of the past as corps are looking to cut costs and the days of walking into a corp and getting a 40 year career is dwindling as older generations refuse to 1. leave, 2. mentor younger generations ontop of reaping insane salaries that low level workers have to kill themselves to fund.


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## canew90 (Jul 13, 2016)

agent99 said:


> You are right that future earning of a young person are hard to predict. Some will do well, get promotions, etc and achieve their targeted retirement savings. Others may just work in a job where their pay only keep up with inflation. For example unionized workers.
> 
> MOA at first talked about living off $40k or $50k pa. That might be fine for such workers. But how do they accumulate the $1million needed off their union wages? Another example might be those who get laid off due to businesses closing or moving offshore. Any plans they had are out the window and they sometimes can only get low paid jobs. They too will have trouble saving anything.
> 
> ...


True, but if one does not work towards a goal it's likely they won't achieve any.

As for the 6% to 8% I'm 100% Cdn DG equities: Banks, Utility, Comm, Pipelines, and afew others. Overall my portfolio generates dividends of over 6% (on my invested dollars) never mind any growth of capital which I don't worry about. We are mid 70's and our dividends far exceed our annual expenses so 60% is reinvested to continue growing the income.


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## agent99 (Sep 11, 2013)

canew90 said:


> As for the 6% to 8% I'm 100% Cdn DG equities: Banks, Utility, Comm, Pipelines, and afew others. Overall my portfolio generates dividends of over 6% (on my invested dollars) never mind any growth of capital which I don't worry about. We are mid 70's and our dividends far exceed our annual expenses so 60% is reinvested to continue growing the income.


Our portfolio includes most of those same equities. But we also have about 40% in fixed income (corp bonds/Pfds) to cushion against a crash like we had in 08/09. We have withdrawn 3.5-4% pa for 14 years and if I work it out right now, our portfolio has also grown by about 3.5% pa. But that is now. If we get another recession and markets drop like they have in past, that 3.5% growth could get a lot smaller. For planning purposes, I use 4% yield on _current value_ or 2% real. (No sense basing yield on invested dollars other than to feel good  ).


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## Eder (Feb 16, 2011)

agent99 said:


> 11million Canadians don't have a workplace pension and many pension plans are in trouble.


Somehow it seems a lot of Canadians want to roll in the present and rack up debt on useless crap...it's their right to do so. Others have enough brains to plan more than a month ahead...pension or no pension.


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## TomB19 (Sep 24, 2015)

humble_pie said:


> lol this must be a first world problem
> 
> everyone is arguing whether they will need 1.5 or 2 or 3 million dollars to retire, or whether they will be able to squeak by on a measley $1M
> 
> .


It sounds flip and braggadocios but this is the problem at hand. There are limits to what the vast majority of us can achieve but a big part of society doesn't even try

We have worked like animals. Our friends and families have told us how unwise it was to spend so much time working. These same people talk about how impossible it is to save for retirement.

In 2017, it would be difficult to retire with $1m net worth unless you were old enough to have CPP help out.

Let's say that $1m is comprised of $700k of rrsp investments and $300k in a house. The person is 55 years old. At 4% withdrawal rate, that would be $2400/mo.

This person will pay about 15% tax. That's less than $2k/mo after tax.

If the $700k were in a tfsa, that would be a lot better but it would be way harder to achieve.
It's going to take 1.5
It takes a lot of money to retire. Instead of being defeatist, I suggest rolling up one's sleeves and doing the best one can. It really is going to take $1.5M and up to make retirement work at a decent level below the age of 60.


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## TomB19 (Sep 24, 2015)

Eder said:


> agent99 said:
> 
> 
> > 11million Canadians don't have a workplace pension and many pension plans are in trouble.
> ...


I don't have a pension. I drive a used car, fix my own toilet, and now my own lawn.

There ought to be a rule that anyone who is 20-50 and able bodied who hired out their lawncare and snow removal should not complain about not being able to retire. The same holds if they are making a payment on furniture.

Don't buy the latest cell phone, back down that cell phone plan to a minimum plan, pack your lunch, pick up a shovel and getting work on saving $500/mo. It isn't that hard. It requires prioritizing retirement above that Grando latte with a spritz of are you kidding me.

People don't even try. It's a shame. Saving money is addictive. Once you see the balance start to grow, there is something satisfying and empowering about feeling like you have some control over your future.


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## TomB19 (Sep 24, 2015)

This is exactly the type of thread that reveals people's thoughts and process that has been so helpful to us over the years. I hope others find this sort of thing helpful, as well. There are some super smart folks in here sharing a lot. This has to be one of the best resources on the Internet.


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## Nelley (Aug 14, 2016)

agent99 said:


> So now we have $5k NET per month? $60k after tax? say $70 before tax? That has to be funded from $1Million 1/3 each in taxable/TFSA/RRSP? Today's dollars in all cases. But now it only has to last to 80 (20yrs)
> 
> I believe that you will have trouble doing that. This view is based on 14 years of actual retirement experience. I am getting close to 80, and no desire to sell our home just yet! And if we did, where would we stay? Definitely not ready for retirement home! But if we were, cost for couple in Chartwell self catering unit that might suit us could be $5k/month. $60k/yr of after tax income. If the home sale yielded $500k, that invested safely may produce at best $20k/yr (more if you blow kids inheritance in an annuity) So where does the extra $50k come from? That million would have to last another 10 years. In fact, the numbers just don't work out if you want $5k/month at retirement. You need $1.5Million or more.
> 
> Problem is, you can't just choose $1million or $1.5million. It will be whatever it is. Then you will choose a retirement lifestyle tha matches your savings. No one seemed interested in commenting when I asked earlier just how many young people will go about saving even $1million these days. But it is a challenge.


I have to comment because this sounds close to what Garth Turner is peddling on his site (along with many investment advisors)-which is basically a scenario where the main problem you will face at the age of 85 is not having enough money. Personally I have not observed this to be the case at all-and my relatives are mostly middle class/lower middle class at best. If you are dirt poor at the age of 85 in Canada and physically and mentally fit you will be doing a lot better than the vast majority of your friends and relatives. So if someone is matching their financial accumulation obsession with a similar intense focus on their physical and mental health then at least it makes some logical sense IMO-otherwise IMO many people have swallowed the MSM Koolaid.


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## canew90 (Jul 13, 2016)

agent99 said:


> Our portfolio includes most of those same equities. But we also have about 40% in fixed income (corp bonds/Pfds) to cushion against a crash like we had in 08/09. We have withdrawn 3.5-4% pa for 14 years and if I work it out right now, our portfolio has also grown by about 3.5% pa. But that is now. If we get another recession and markets drop like they have in past, that 3.5% growth could get a lot smaller. For planning purposes, I use 4% yield on _current value_ or 2% real. (No sense basing yield on invested dollars other than to feel good  ).


The yield % really doesn't matter, its the actual amount we receive annually that counts and is it growing every year. We went through 2008\2009 and it grew, though slowly, but picked up after 2011/2012.


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## tygrus (Mar 13, 2012)

humble_pie said:


> lol this must be a first world problem
> 
> everyone is arguing whether they will need 1.5 or 2 or 3 million dollars to retire, or whether they will be able to squeak by on a measley $1M
> 
> .


In canada, $1M is measly. The cost of living and inflation are wildly out of control here. Last thing people want to do is run out of money or their pension fund craters or the market sinks. There are so many contingencies to worry about.


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## james4beach (Nov 15, 2012)

People's living expenses can vary wildly though. I think at the level I want, I'll need at least 1.5 M but others can do with less.

My friend Bryce was the guy in the news story a few months ago about the millennials retiring young.
http://www.cbc.ca/news/business/house-investment-wealth-1.3716641

He was very, very frugal and made compromises in life that I never would. But his living expenses really are low. I don't think 1 M will be enough for the two of them, as frugal as they are. Personally I think the trauma of working for our ex employer (a horrible place) pushed him to hope & dream for a way out.

So there's an example, two people of the same age. I think I need 1.5 M (individual) and he thinks he only needs 1.0 M (for two people).


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## My Own Advisor (Sep 24, 2012)

Oh +1 for sure about debating whether we should have $1 M + government pensions or $1.5 M _or more_ to retire. Just answering the question 

Like you James, I would never want to retire too young and be too damn frugal in doing so. There is a balance and everyone needs to find their own. I think for us, if we can do it, $1 M invested by age 50 and living our life in the meantime will be pretty darn good.

Update. I reached out to this couple recently and I hope to post a Q&A with them on my site in a few days. I mean, good on them to have a plan and realize their goals. I have a lot of respect for people like that, even if I don't live the same way.


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## none (Jan 15, 2013)

1M what too - 1M after tax or before tax? So many 1st world questions.

To come clean I'm aiming for 1M retirement pot of which I hope 50% will be non-RRSP. Add that a 25 year government pension that is worth I guess 600K based on a 5% withdraw rate.

Lots of cushion but the woman I'm seeing is a financial disaster. Doesn't seem too much anymore!


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## My Own Advisor (Sep 24, 2012)

none said:


> 1M what too - 1M after tax or before tax? So many 1st world questions.
> 
> To come clean I'm aiming for 1M retirement pot of which I hope 50% will be non-RRSP. Add that a 25 year government pension that is worth I guess 600K based on a 5% withdraw rate.
> 
> Lots of cushion but the woman I'm seeing is a financial disaster. Doesn't seem too much anymore!


LOL none.

$1 M is before tax - portfolio value. 

If you have that ($1 M eventually) AND a 25-year gov't pension (worth at least $600k IMO; likely closer to $1 M with 25 years) you can afford a spendy partner


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## TomB19 (Sep 24, 2015)

none said:


> 1M what too - 1M after tax or before tax? So many 1st world questions.
> 
> To come clean I'm aiming for 1M retirement pot of which I hope 50% will be non-RRSP. Add that a 25 year government pension that is worth I guess 600K based on a 5% withdraw rate.
> 
> Lots of cushion but the woman I'm seeing is a financial disaster. Doesn't seem too much anymore!


Women who are financially out of control are said to be the best in bed.


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## Eder (Feb 16, 2011)

Well my wife has been financially out of control for over 34 years now hehe.


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## redsgomarching (Mar 6, 2016)

LMAO to the wife comments, luckilyy the woman I intend to marry is financially savvy and good in bed.


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## kcowan (Jul 1, 2010)

My Own Advisor said:


> Especially given some friends said they only needed $5K per month (net) to live comfortably.
> 
> My argument was, anyone who owns their home at age 60 or 65, _especially in Toronto_ + has average CPP and OAS benefits + has $1 M in the bank has done a) very well for themselves and b) has enough to live to at least age 80 without dipping into home equity - assuming spending $5K per month net income and overcoming some inflation of 2% or 3% involved.


I used to compare living costs with a bunch of buddies who I worked around southern Ontario. We concluded that $70k plus residence was easy. And we were working. I think being retired is cheaper unless you go crazy on travel. Most people don't realize that a working couple can expect $20k-$25k in government pensions after retirement. So the stash needs to fill the gap to $60k plus any travel costs. And that is a "live forever" scenario.


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## mordko (Jan 23, 2016)

That's probably OK for someone retiring at 60. People retiring at 35 won't get much from the CPP. That is if there is a meaningful CPP/OAS in the year 2067.


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## My Own Advisor (Sep 24, 2012)

kcowan said:


> I used to compare living costs with a bunch of buddies who I worked around southern Ontario. We concluded that $70k plus residence was easy. And we were working. I think being retired is cheaper unless you go crazy on travel. Most people don't realize that a working couple can expect $20k-$25k in government pensions after retirement. So the stash needs to fill the gap to $60k plus any travel costs. And that is a "live forever" scenario.


Thanks kcowan. I've long thought the same. Say in FV dollars, you're getting conservatively $20K gross (couples) from government benefits (CPP + OAS) AND you've got $1 M in the bank churning out $30K or so per year. Pretty good unless you go crazy on travel.

@Mordko raises a good point about retiring early. If you're not contributing to CPP for a long time, at highest contribution rate no less, less CPP for you!


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## CalgaryPotato (Mar 7, 2015)

Nelley said:


> I have to comment because this sounds close to what Garth Turner is peddling on his site (along with many investment advisors)-which is basically a scenario where the main problem you will face at the age of 85 is not having enough money. Personally I have not observed this to be the case at all-and my relatives are mostly middle class/lower middle class at best. If you are dirt poor at the age of 85 in Canada and physically and mentally fit you will be doing a lot better than the vast majority of your friends and relatives. So if someone is matching their financial accumulation obsession with a similar intense focus on their physical and mental health then at least it makes some logical sense IMO-otherwise IMO many people have swallowed the MSM Koolaid.


I find CPP & OAS which a lot of people dismiss as being insignificant on this site, makes all the difference. I have lower middle class family members who as seniors got close to full CPP & OAS and without much savings, they were able to do great. 

I also have family members who through a combination of a stay at home parent, self employment and coming to Canada later are getting significantly less OAS & CPP and it makes all the difference.


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## tygrus (Mar 13, 2012)

What if you are 48 and have 3 kids under 5? How much do you need then? I say 6 figs. Can you get that from a million? Would have to use some margin I think and try to goose it up.


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## redsgomarching (Mar 6, 2016)

tygrus said:


> What if you are 48 and have 3 kids under 5? How much do you need then? I say 6 figs. Can you get that from a million? Would have to use some margin I think and try to goose it up.


probably wouldnt need that if your house is paid off and one of the parents is at home. the biggest expenses will come when they go to post secondary.


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## CalgaryPotato (Mar 7, 2015)

tygrus said:


> What if you are 48 and have 3 kids under 5? How much do you need then? I say 6 figs. Can you get that from a million? Would have to use some margin I think and try to goose it up.


6 figures out a million is a great return, it's not something you could ever consider safe enough to use for a 40+ year retirement plan though. Definitely looking at any of those really early retirement ages a lot of the factors change, OAS is many years away, CPP is many years away and will be greatly reduced.

That said, and not to pick on you, but 6 figures isn't a "need", want maybe, but a family doesn't need that. Most families don't have that much per year in income and that is with CPP, EI & full income tax coming off of it.


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## TomB16 (Jun 8, 2014)

tygrus said:


> What if you are 48 and have 3 kids under 5? How much do you need then? I say 6 figs. Can you get that from a million? Would have to use some margin I think and try to goose it up.


I'd say $2M plus $475 for the vasectomy.


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## humble_pie (Jun 7, 2009)

what a riot this thread is

the happiest retirees are those with at least $1.5 million. right now today with full CPP & OAS but not tomorrow with no gummint support. keep those dividends below the cut-off level. vasectomied. frisky young wife who's financially out of control
.


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## humble_pie (Jun 7, 2009)

PS someone should start a thread on What the Wives Want in Retirement

.


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## cashinstinct (Apr 4, 2009)

If you are 48, and have 3 kids under 5...

Make sure you can report little to no income to governement (TFSA withdrawals, capital from non-reg investments with no gain in capital), and make the monies with Canada Child Benefit.

There is some backlash in medias these days about people who "retire" early but end up with little income from tax purpose, so they get lots of money from government programs.


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## agent99 (Sep 11, 2013)

kcowan said:


> I used to compare living costs with a bunch of buddies who I worked around southern Ontario. We concluded that $70k plus residence was easy.


That residence doesn't come free, even if you own it outright. We have an older home in semi-rural township. Our taxes and energy bills come to about $12k. Or say $14k before tax. Add maintenance and upkeep and that could get to $16k. $70k total after tax might be doable from $1million for couple with income splitting and max OAS/CPP. We are pretty frugal, yet spend more.


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## agent99 (Sep 11, 2013)

Another way to look at how to live off that $1Million, would be to consider an annuity. A single person should be able to buy a single life annuity that will pay out about $50k pa. This will be partly taxed and amount depends on how much in registered or unregistered accounts. You can guaranty income for up to 25 yrs which would help if you die early. Of course, without guaranty, your money is gone when you die. The approx 5% distribution might give us an idea of how we would make out if we do our own investing and draw 5% (those actuaries no doubt make sure the insurance company doesn't lose!)

RBC has a rudimentary calculator here: https://www1.rbcinsurance.com/cgi-b...&OPT1=&7ASCRIPT=/YVI0/poa/GettingStarted.aspx

Problem with that simple type of annuity, is that there is no allowance for inflation.


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## mars (Mar 11, 2014)

agent99 said:


> That residence doesn't come free, even if you own it outright. We have an older home in semi-rural township. Our taxes and energy bills come to about $12k. Or say $14k before tax. Add maintenance and upkeep and that could get to $16k. $70k total after tax might be doable from $1million for couple with income splitting and max OAS/CPP. We are pretty frugal, yet spend more.


Wow, those are quite high housing expenses. I checked my spending for the last couple of years and I am between $6k and $8k per year on housing. That includes taxes, insurance, utilities, and upkeep. I had to replace a water heater one year and decided to purchase it as opposed to renting which drove my expenses up to the $8k range. I'm in Toronto so my property taxes are lower than areas outside Toronto but my house is an older house having been built in the 60s.


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## mordko (Jan 23, 2016)

Tax alone on the house we've just sold in the GTA used to be over $10K. Property taxes on our new house are just over $3K because of landuse. So, yeah... large variation.


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## My Own Advisor (Sep 24, 2012)

humble_pie said:


> what a riot this thread is
> 
> the happiest retirees are those with at least $1.5 million. right now today with full CPP & OAS but not tomorrow with no gummint support. keep those dividends below the cut-off level. vasectomied. frisky young wife who's financially out of control
> .


lol


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## damaaster (Mar 27, 2015)

First of all, I have to say I think this is my favorite thread i've seen on these forums. Lots of great comments, suggestions and witty banter 

My friends and I discuss all these things quite often - and I always find it fascinating to hear different perspectives from different people.

I like to think that I am ahead of the average (at least compared to my friend group) as far as savings/investments go - since reading the wealthy barber at 17 years old I've been very interested in early financial independence...that coupled with the fact I have no pension at work and I've always loved the idea of early retirement... I've tried to supersize my savings as much as possible. I'm 33 now - hoping to be financially independent by 45 - though would ideally love to find a job/part time job that i love to help supplement some income.

MY current house is on track to be paid off in 8 years - however we are expecting our 2nd (and last..lol) child in a few days...this means we will most likely be looking for a bigger house. We have a cabin already paid off(probably worth about 100k) - that we may keep - or might sell and max out the wife's TFSA (another debate we have almost monthly). Aside from the mortgage, we have no debt - and i've got about 275k in RRSPs(all equity funds) and another 50k in my TFSA. I'm able to contribute around 15-20k per year to my RRSP for now -although my wife doesnt have a pension either, and doesn't have much as far as investments go. I use my TFSA mostly for Reits, and some higher yielding Canadian Stocks - as well as a few potential "home runs" (Marijuana stocks, etc).

Ideally I think the dream would be to travel 3-4 months of the year (during the winter as we are in Winnipeg) and spend the summers at the lake. The million dollar question (or maybe 2 million dollar question) we struggle with - and it seems like everyone else does is how much will we need to retire. A few people have also mentioned the costs for their kids education - which to be honest is something I never really thought about - since my parents were never able to help me or my siblings with the costs (we got to live rent free if attending college/university) I always just assumed I would do the same - but I guess if I can afford to help them - I should start adding that to my plans as well...so much to think about :S


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## cashinstinct (Apr 4, 2009)

Being 33 years old with 275k in RRSP and 50k in TFSA is good work.

Considering the 20% grant from federal gov, you could consider RESP in your mix. The capital is yours to keep if you want, only the interest and grants must go to the child's post-high-school education. $2,500 per child per year for maximum grants (+amounts for prior years for 1st child) can keep you busy 

Before buying a bigger house, consider all the costs associated, the number could surprise you.


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## agent99 (Sep 11, 2013)

mars said:


> Wow, those are quite high housing expenses. I checked my spending for the last couple of years and I am between $6k and $8k per year on housing. That includes taxes, insurance, utilities, and upkeep. I had to replace a water heater one year and decided to purchase it as opposed to renting which drove my expenses up to the $8k range. I'm in Toronto so my property taxes are lower than areas outside Toronto but my house is an older house having been built in the 60s.


I decided to check our actual expenses (the ones I posted were off top of my head!) . In 2016, we paid $6600 in taxes and $3700 for energy. On top of that we had $6600 in maintenance (Plumbing repair, New glass in patio doors, etc) On average over past 10 years we have spent $10k/yr on maintenance & upgrades (it is an older home). On top of that some sundries like insurance, garden stuff etc come to about $2000. So about $22,300 of after tax money or about $26k of pretax money. This is just an older 3 bedroom home in small town Ontario. Large lot on lake probably pushes property taxes up.


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## CalgaryPotato (Mar 7, 2015)

agent99 said:


> I decided to check our actual expenses (the ones I posted were off top of my head!) . In 2016, we paid $6600 in taxes and $3700 for energy. On top of that we had $6600 in maintenance (Plumbing repair, New glass in patio doors, etc) On average over past 10 years we have spent $10k/yr on maintenance & upgrades (it is an older home). On top of that some sundries like insurance, garden stuff etc come to about $2000. So about $22,300 of after tax money or about $26k of pretax money. This is just an older 3 bedroom home in small town Ontario.


That house is costing you way too much. How much would it cost you to just rent a similar house? Because here in Calgary you can rent a nice house for similar.


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## TomB16 (Jun 8, 2014)

damaaster, I suggest you consider building your wife's RRSP as a spousal, before yours gets too large.


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## gibor365 (Apr 1, 2011)

> I decided to check our actual expenses (the ones I posted were off top of my head!) . In 2016, we paid $6600 in taxes and $3700 for energy.


 It looks expensive... Does energy include gas or only hydro?

We own 3 bedroom house in Mississauga and in 2016 paid: gas	712.05, hydro	1795.22, water	1059.49
Taxes 4161.9


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## damaaster (Mar 27, 2015)

TomB16 said:


> damaaster, I suggest you consider building your wife's RRSP as a spousal, before yours gets too large.


I agree 100%. I've been saying we need to do this for a few years...i'll definitely get on that this year.


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## agent99 (Sep 11, 2013)

CalgaryPotato said:


> That house is costing you way too much. How much would it cost you to just rent a similar house? Because here in Calgary you can rent a nice house for similar.


It's costing us about 60-70% of what it would cost to move to a retirement home  You can't rent a HOME! But if a similar HOUSE was available, it would probably cost same as we would ask if we rented our home. The market determines rental rates.

No reason for us to cut house costs anyway. Was just trying to show that selling home in later years does not provide as much help as some might suspect.


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## agent99 (Sep 11, 2013)

gibor365 said:


> It looks expensive... Does energy include gas or only hydro?
> 
> We own 3 bedroom house in Mississauga and in 2016 paid: gas	712.05, hydro	1795.22, water	1059.49
> Taxes 4161.9


No gas. Our house is mainly one level, about 2400 sq.ft. and exposed to wind off lake. So not too efficient for heating. High efficiency heat pump for 2/3 of floor area, baseboard for rest. Turned down to 5C for 2-3 months in winter! Maybe we should go away for longer  Large waterfront lot increases taxes.


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## like_to_retire (Oct 9, 2016)

agent99 said:


> Our home is on lake. It is our home. You can't rent a home!


+1. Rent a home - yuk.



agent99 said:


> But if a similar house was available, it would probably cost same as we would ask if we rented our home. The market determines rental rates.


Agreed. Any suggestions that rents are cheaper are short lived. The landlord has all the costs an owner has, plus the requirement to make a profit, or why would they bother. Eventually, renting will be more expensive.

ltr


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## Retired Peasant (Apr 22, 2013)

Eder said:


> Somehow it seems a lot of Canadians want to roll in the present and rack up debt on useless crap...it's their right to do so. Others have enough brains to plan more than a month ahead...pension or no pension.





TomB19 said:


> I don't have a pension. I drive a used car, fix my own toilet, and now my own lawn.
> 
> People don't even try. It's a shame. Saving money is addictive. Once you see the balance start to grow, there is something satisfying and empowering about feeling like you have some control over your future.


Thing is that the ones with the brains to plan more and save more may ultimately get penalized for it. There's more and more talk about 'means testing' using net worth. Those who have done without and saved and have that high net worth will end up having to pay for those who have nothing because they spent it all without a care.


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## like_to_retire (Oct 9, 2016)

Retired Peasant said:


> Thing is that the ones with the brains to plan more and save more may ultimately get penalized for it. There's more and more talk about 'means testing' using net worth. Those who have done without and saved and have that high net worth will end up having to pay for those who have nothing because they spent it all without a care.


+1000

Socialism: Take money from those that earn it, and give it to those that don't.

ltr


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## Eder (Feb 16, 2011)

Does seem like a big dis incentive to not be a useless citizen. At any rate I would recommend to others younger to use a joint non registered investment account...I'm pretty sure shooting a 100k to your wife in a few years will ring the tax bell. +1 to topping up spousal RRSP at same rate as the bread winners.


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## kcowan (Jul 1, 2010)

The reason we excluded housing was because that turned out to be the biggest variable among guys living around southern Ontario with and without cottages. It was for a couple of empty nesters with 2-3 kids working.


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