# How to MAKE a million bucks!



## Dmoney

Inspired by the thread on how to invest $1 million, here it is.

I'd love to hear from any who have assets (other than their principal residence) with a value in excess of $1 million. I'd also love to hear from those who have solid plans for getting there, or even just hopes of getting there.

I know many won't want to comment on their net worth, or even come out and say they have $1 million+, and that's okay. Anyone willing to contribute details, it would be much appreciated and I think extremely interesting for both those who are already successful, and those trying to become so.

The more details the better. Rather than say "Real Estate", tell us if you built houses, flipped houses, rented houses, burned down houses and claimed insurance on them . 


I'll kick it off as best I can. 

I've been working odd jobs since I was ~12 years old (coaching camp, mowing lawns, shovelling driveways, raking leaves etc.) and have always been a saver. I was taught the power of money to grow and compound on itself from a young age, and have ever since been fascinated with how money works, how markets work and how to grow wealth.

Went to university for finance while working throughout, graduated and got a job on Bay Street. As it stands right now, I'm hoping to build my wealth the old fashioned way of working a job, earning more than I spend and saving the rest. In the longer term, I plan to expand my wealth primarily through the market. Holding stocks/bonds, selling options, collecting dividends etc. You can follow the beginnings of that journey here: 
http://canadianmoneyforum.com/showthread.php/9529-My-income-statement 

I'm also constantly exploring various options more entrepreneurial in nature, which may or may not be viable down the road. I'm currently way to busy to consider anything that will take more than 10-20 hours out of my week, so it is mostly limited to ideas in my mind or on paper. 

I hope to stay the course of my current career path for at least 5-7 years, at which point I will likely be able to step up to the next level with a very steep increase in pay and responsibility. It is likely then that I will have to make a choice between remaining in the industry, or pursuing alternatives. 

I hope to make my first million by 30, which gives me 7 years to do so. Lofty goal, but I hope to be up to the challenge. 


Hope to generate some interest. Would love to hear from anyone who:

Started a business
Saved and invested
Started a blog(s)
Bought a franchise (how did you get the seed capital?)
Inherited $$ (what did you do with it afterwards?)
Invested in real estate

Would also like to hear from anyone else with goals and plans to achieve them.


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## londoncalling

Easist way to make a million bucks? start with 2 million and spend half... :tongue-new: I know that's not want you wanted for a reply but I thought I'd start this off with a bang. I hope you do find some serious replies though as I am curious as to how people can make a $1 000 000. I assume that it takes either a lot of starting capital, a lot of luck or both. Another possibility would be to lead a ridiculous frugal lifestyle to the point that i would not see the pursuit worth it if one wanted to do it in a 7 yr time frame. Regardless, I am wishing you well on your 7 yr $1 000 000 journey. I do think $1 000 000 is an attainable goal for most just not sure of how long it takes to happen. I see this being a very popular thread.

Cheers


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## ffej49

A Story of 2 families I know who are retired...and I hope to land somewhere in between.

1) The "Smith" family saved every dime they made. Raised 3 kids, sent them to school. Retired before 65. The Smiths' kids remember growing up asking for toys, and Mom and Dad always responding "We can't afford it". They are now empty nesters, with lots of cash and still won't spend it, becuase all they know is saving. They are incapable of enjoying their hard fought $$$.

2) The "Taylors" have been a single income famliy for most of their 40years together (mind you that single income is a partner at a law firm). They are > 70 years old. Always done well in real estate in the GTA. They have 200K each in RRSP's (soon to be RRIF's). Just this month they decided to sell their condo in GTA, downsize here and buy a nicely appointed condo in Florida. Every year they pay for each of thier kids to bring their families down for a week at time (Flights, accomodation, plus many dinners out). 

I will never make what a Partner at a law firm makes, but i can take one of his principles and make sure that it stays with me: He would rather see his children enjoy his money, and share that time with his grandkids, than leave some trust acct filled with dollars. 

Not sure if that is valid as to why this thread was started...


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## Ethan

I want to be a millionaire by age 40. 1/4 of the way there now, age 27 (including my girlfriend's assets, we've been common law for 3 years). Keys in getting where we are:

- relevant work experience in university (coop programs and summer internships)
- We were both fortunate enough to have our parents pay for our university educations, allowing us to graduate debt-free
- we're both CA's. This career path involved long hours and low pay pre-designation, but the increase in pay and ability to transfer jobs post-designation made the sacrifice worth it. I don't know how our relationship made it through the first 3 years at a firm, she deserves most of the credit.

To get to $1 million, we plan on paying off the mortgage quickly (15 year amortization), maintaining good networks through attending various events in the city, continuing education (I'm debating transferring to a line of work that would allow me to get the CFA) and living below our means.

Potential roadblocks include wedding and kids (rumour has it these things are expensive), the desire for a larger house (I bought a small house with a basement rental that is walking distance from work, moving to the suburbs would be a drain on resources) and major market corrections.


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## doctrine

If you want to be a millionaire/independently wealthy, you need to be in business, and a business that can grow to function without you. In my experience, the people I know who are able to do this have family capital, either relatives or through family businesses. Unfortunately, its nearly impossible for someone to obtain $1M in capital at an age where they can apply it aggressively (under 50) while not working a full time job.


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## Ethan

doctrine said:


> Unfortunately, its nearly impossible for someone to obtain $1M in capital at an age where they can apply it aggressively (under 50) while not working a full time job.


$1 million isn't that much anymore. Read 'The Millionaire Next Door.' If a family with average earnings is diligent at paying themselves first and achieving average returns, $1 million is easily within reach. The key is to start early and get your money compounding.


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## Dmoney

@ londoncalling: The follow up question would then be... How to make $2 million bucks? 

I think the 7-year time-frame is aggressive but obtainable *if and only if* I stay on my current career path. Starting from an all-in comp that I expect to be ~$100K, the increases are _apparently_ fairly steep and frequent. Very common to be making 1/4 of a million within the first decade on the job and not unheard of to be making $500K - $750K/year within the first 10 years. 

I anticipate my hurdles to be:

1) potential loss of employment
2) sluggish market which impacts variable compensation and career advancement
3) the most dreaded: Children :upset:

From my personal experience, I've come across several millionaires.

By far the most common group of millionaires seems to be highly educated individuals with great professional jobs and good savings habits (doctors, lawyers, accountants etc.)

I know a few guys who own several bars. Interestingly enough, its two separate groups, each consisting of two very tight partners who have cooperated from the beginning. Both pairs have expanded from one bar to several and combined I'd say each partnership owns bars worth north of $10 million. One of the pairs owns all the real estate their bars are in, and I'm not sure about the other. 

I've also come across a few people who own construction businesses, home building companies, gyms, real estate and insurance companies, and have all done well for themself. As was said upthread, I think a business that can carry itself is the way to go. 

I've also noticed that those who have a business partner from the get-go seem to do extremely well as long as they stick together. Short of those who inherited their parents' business, all the big successes that I have come across have not gone at it alone. 

Any volunteers??????


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## crazyjackcsa

I imagine the thread will be full of examples of the old adage "It takes money to make money" and survivorship bias.

How to make a million dollars: The recipe.

1. Get good paying job.
2. Save money.
3. Invest that saved money in something (Stock market, Real Estate, whatever).
4. Wait until you have a million dollars.

I screwed up the first step. With a family income of 60k a year and two small kids, it'll be a long time until I end up with a million in cash. But I'll get there (when a million is only worth 500k today)


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## ddkay

What Ethan said, any family with above average household income (average here is $85K) and proper savings habits should easily achieve that.

Until a time machine comes along there are few shortcuts to quick and easy millions. Ownership is the riskiest but probably most rewarding. IMO determining factors are the right business environment, strong work ethic, connections to people with similar objectives, and a little luck.

Maybe this is worth a read, kinda rags to riches story of an inherited RE business turned to empire > http://www.theglobeandmail.com/repo...onto/article728526/singlepage/#articlecontent


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## donald

I'm on my way.My path is completly different than dmoney or ethan as in i don't have any formal education(i semi graduated with a work intermship)You can prob tell by my writing skills and format(working on that)Lol
I have a construction business that i started 6 yrs right from the ground(basically a hammer and a rusty half-ton & a pray)after working for a family member who was in construction,after about 2 yrs and being able to turn a profit my dad actualy came on board with me and now i run a tight small construction firm(4-6 guys)Finally after about five yrs im semi "stable" and do roughly 1/2 a million in sales(i don't have a mba but i know business 101 and my margins are awesome*north of 30% of gross revenue*I'm trying to expand.I have always been a saver...I built and sold a house in-between and made a nice profit and have a hybird approach of-business assets/personal assets/portfolio assets.I have about 100k capital in the company(no debt)Ongoing stream from corp*hard to calaculate because i draw one bonus a yr and one dividend cheque.personally i have about 75k(no debt) and between all ports rrsp/non/tfsa 200k dumping aggressive from business profits(I'm learning asset managing from the seat of my pants-like i did with my business)I should be able to secure about a half-million @ the end of 2012-Age 32...single...renter(costs me about 30k to live)Come hell or high water im going to be a millionarie before 38(I just want to do it to do it)the money is not even my motivation...guess it's just the challenge and how hard it is/seems-and i KNOW i will NO DOUBT in my mind*with some luck*


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## Jon_Snow

My wife and I reached the million in net worth when we were 36. Interesting story behind that, I can assure you. My best advice in becoming a "millionaire" is to, under NO circumstances, live like one. We save 70% of our income currently. I agree that a million isn't that much these days. 2 million is the new million. Hope to be there in a few years.


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## Dave

Interesting thread.

I am 31 and on my way as well with assets of roughly 500K (I do not own any real estate though). I come from an immigrant family and had to start from scratch. I have lived with my parents till age 25 and they paid for my education and everything else. At 25, I got my fist real job. I scrambled what I have saved so far from all the odd jobs since high school and with my parents help put a downpayment on a condo. During 5 years, I hold jobs paying 30-50K from which I saved over 50% of the after tax income. Very frugal and the only one at my cie with no car. I had a small investment portfolio that I started at age 16 to which I was adding small amounts regularly, but I was no stock market genius so I decided to focus all my efforts on paying down the mortage. To motivate myself to save, I took a variable rate line of credit which included my mortage and became also my cheqing account (an all-in-one banking product). For someone who never had debt, it was downright terryfing to open up my bank account and see a negative six figures as a balance. I saved like crazy as a result. Paid off my parents first. Paid off most of the mortage. Sold the condo for a net 40% profit. In the meantime, finished more advanced schooling for a better paying job. At that time, my net worth was 200K. 

Then I got a high paying contract up north in the field of my studies which is the key to my financial situation now together with the frugal habits acquired earlier. I am renting and I do not have any major expenses. I honestly do not have time to spend since I am almost always at work - except for expensive vacations in the sun from time to time  So far, the savings are adding up very fast and I am on my way to 1M in 3 years. The huge opportunity cost of this decision is that I am still single and I did not start a family yet. 

What can slow me down: 
- the obvious: getting married and having kids
- the number one above usually comes with buying a house
- changing jobs
- gifts and financial support to my family (parents, sister)

Dave


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## londoncalling

Jon_Snow said:


> I agree that a million isn't that much these days. 2 million is the new million.


I think with the current RE valuations,a $1 000 000 net worth is very easy to achieve if you are mortgage free and bought at a reasonable price.

To the OP the easiest way to make $2 000 000 is to first make $1 000 000 and then do it again. :tongue-new: 

On a serious note, it has been summarized above. Have a job with a high salary and live on a low salary budget. I was a business owner and had limited success. I earned a decent income(more work and more $ than I did as a wage earner) but by no way was I able to make a million from it due to the size of the market and my initial investment capital. I didn't close my business because it was not a huge financial success but needed to relocate geographically and did not want to re establish a customer base in a new and bigger center. There are many advantages to running your own business and I recommend that anyone interested in doing so take the plunge after doing their research and creating a viable business plan with the right amount of starting capital.

I would still agree that most millionaires start with a paid education and lots of start up capital. I myself (not me but people I know) have found that one can achieve great wealth through business and entrepreneurial spirit. It is easier to do it with a partner(from a shared capital and risk perspective) but my understanding is that more business partnerships fail than succeed for a variety of reasons. Those reasons include, but are not limited to, different vision, different effort, different expectations.

To those that feel weddings and kids are a huge cash drain I can speak from my own experience. It can be done very inexpensively if you so choose. Although like most things, there is no limit on what you can spend on either but the costs do not to be that high if you do it right. If you want to get married or have children do not let the cost of it prevent you from doing so. Marriage(not weddings) and children can offer a variety of benefits. The single or childless lifestyle can offer many opportunities as well. Neither is better than the other and comes down to personal choice.


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## Zeeshan Hamid

I could hit that number by 40 if I really wanted to and started at 23 when I got my first real job. But it'd require me to be an extreme saver. I know people like that, it's not for me. What's the point of living like a rat to hit some arbitrary number? 

I also know the other extreme. Kids who finished university with me and bought BMWs before even their first paycheques came in. I can't do that either, live for today not knowing what'll happen tomorrow. 

The key is to find the middle ground. Save 20-30% of whatever you earn, invest it wisely and be happy. You'll get there when you get there.


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## cash

It was mentioned above, but this is basically the subject of "The Millionaire Next Door". Wikipedia has a good summary: http://en.wikipedia.org/wiki/The_Millionaire_Next_Door

For those to lazy to read the book, or even click the link and read the wiki article, here are the most important aspects in becoming a millionaire:
-Spend less than you earn
-Avoid buying status objects or leading a status lifestyle
-Take financial risk if it is worth the reward
-Avoid Economic outpatient care (paying your grown children's bills)


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## Oilers82

londoncalling said:


> To those that feel weddings and kids are a huge cash drain I can speak from my own experience. *It can be done very inexpensively if you so choose*. Although like most things, there is no limit on what you can spend on either but the costs do not to be that high if you do it right. If you want to get married or have children do not let the cost of it prevent you from doing so. Marriage(not weddings) and children can offer a variety of benefits. The single or childless lifestyle can offer many opportunities as well. Neither is better than the other and comes down to personal choice.


Slightly off-topic....I think you'd be hard-pressed these days to find anyone who would agree with you on this one. A wedding is a huge financial drain if you are to do one properly. Its a lot different in this day and age...to most people I know $30,000 is completely average and most go well over that number for their weddings.

Back on track...2 things to add to this:

1. Individual millionaires vs Family millionaires...way different stories here. Both are impressive but its much easier with a 2nd income!

2. I agree with OP it'd be interesting to see a story of a self-made millionaire without much in the way of education. Donald seems to be the closest one to this description (at least he is on his way). Keep the stories coming!

I fall in the typical "get educated, get good job, don't spend too much" camp. Age 29, married no kids. Parents saved for my education, paid my way so I had no debt. Grandfather was wealthy and gave $100k as inheritance when he passed away (when I was 16 or so). Invested that money in some mutual funds. Cashed out in 2008 (months before the crash), bought a condo downtown TO with a very small mortgage that I could afford. Finished school and started working...50-55k for first 2 years.
-condo is eventually sold in 2010 for a nice 15% net profit and my wife and I wound up moving up to a bigger townhouse. Have about $270K equity in there now.
-Pay has gone up significantly since 2010. Making well over 6 figures, but not living it up too much. Saving lots, faithful with RRSP, TFSA and savings account.
-Independent of my wife's income/assets will hit $1 million in assets in 3 years. This is assuming you count RE as assets...if we're talking investable assets then will be much later since I do want to pay off my mortgage and live free of that expense.

I was simply lucky to have had my parents' selflessness to start me off (yup we're definitely an immigrant family). They're by no means rich, but they sure as hell saved well with my future in mind. Lucky that I'm an only child too so they could put more money into my education. Also lucky to have had that windfall from grandpa. So I attribute most of my current position to those factors, which...as many have pointed out, means that having initial capital is important. I still think that earning a million definitely would've happened for me, but at a much later age due to more debt that I'd have to take on to finance school and living expenses. Luck and circumstances play a huge factor, and if capitalized on can be a great advantage. Of course there are plenty of people who I know that are provided much greater monetary support than I and don't have 10% of what I have. Fortune has to be combined with dedication and hard work in most cases.


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## iherald

Oilers82 said:


> A wedding is a huge financial drain if you are to do one properly.


I suspect this is the issue, what does "do one properly" mean to each person? A 400 person wedding? A simple justice of peace cermony at city hall? I agree with you that most weddings these days are pretty fancy and that becomes the reason to do one fancy because it's how you do it. But, I think the idea is that if you want to save money, you can. I suspect if you ask people 20 years later what they remember about their own wedding it isn't the food, flowers or music, it's the people. I certainly don't remember the food at any wedding I've been too. 

But, to bring it back to the thread, I think it's an interesting point about how to become a millionaire. do you do a big wedding because it's what people want, or do you just focus on what you'd like and what makes you happier?


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## Guigz

We did a 50 people wedding for about 4,000$. The night was completely AWESOME, the food was excellent (duck with risotto), the booze was plenty and all that included a limo, our wedding attire and rings. Expensive != Good 

As per the topic, I don't really need to save a million $ ( I figure I need about 600,000$ + paid house). As others have said, get an OK paying job, save, invest and let time do its magic.


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## larry81

+1 for the millionaire next door, very good book !

my tips:

1. work hard
2. save as much as you can
3. invest wisely
4. don't purchase 'status' (ex: flashy things)


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## Oilers82

Guigz said:


> We did a 50 people wedding for about 4,000$. The night was completely AWESOME, the food was excellent (duck with risotto), the booze was plenty and all that included a limo, our wedding attire and rings. Expensive != Good
> 
> As per the topic, I don't really need to save a million $ ( I figure I need about 600,000$ + paid house). As others have said, get an OK paying job, save, invest and let time do its magic.


You're quite fortunate that you were able to pare your guestlist down to 50. Sometimes its next to impossible depending on family demands. For my wife and I, our families alone took up more than 50 people, plus parents wish to invite their friends too. In the Chinese culture a lot of times the wedding is as much for your parents as it is for you.

Although that $4000 is a steal even on a per person basis! Well done.

iherald even though nobody remembers the flowers, food, etc...you still gotta have it there. If you serve crap people will certainly remember that. If you lack booze, it will be remembered. So you still have to have it there. Its very hard to find a wedding hall that will give you a package for less than $100 pp all in after tax and tip. So say an average 150-200 person wedding will run close to $20k for food/booze alone, plus then add in gown, tuxes, travel, miscellaneous costs here and there and you can see that things can and will add up.


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## Oilers82

Sorry that is the last post on weddings, no idea how it got to that. Sorry. Back on topic!


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## Mall Guy

Ethan said:


> Potential roadblocks include wedding and kids (rumour has it these things are expensive), the desire for a larger house (I bought a small house with a basement rental that is walking distance from work, moving to the suburbs would be a drain on resources) and major market corrections.


Avoid the 'mid-life re-financing' often known as divorce . . . a serious part of wealth erosion


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## Jungle

Agreed the fastest way to 1M in assests is through running your own business
The second fastest way would be to spend less than you earn and invest your money.


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## Just a Guy

Well, one way to make a million dollars fairly easily is through real estate, work is required. You have to find a good property which will produce cash flow (I look for ones which cash flow at 100% financing with a higher interest rate). 

Today that means buying ones below market value as market value seems pretty inflated. That being said, it is possible, I've bought a few recently, and am looking at several more. If you can find one undervalued, there are probably problems with it that need to be fixed, so you fix the problems. This increases the value of the property to the current market values, giving you an "on paper" capital gain. 

You use this "on paper" capital gain by refinancing the rental (remember you bought the property not for capital gain, but for cash flow) and you use that money to help buy your next property and finance it at 100%. The gains you invest aren't lost (unless the market drops, but you are already buying below market value so the risk is mitigated), they are repurposed and put to work.

So, for example I'll use a place I'm looking at right now, you find a two bedroom apartment condo for $60,000 (list price, it's a foreclosure). Negotiate hard, you may save another $10k. The market value of similar properties to this one is about $100k. The current rents in this area happen to be about $1000-1200/month heat and water included.

What you are looking at:

$60,000k mortgage, amortized 25 years at 6% (you should be able to get it well below this, but be conservative on your numbers), means payments of $486.58/month.
Taxes, say $75/month
Insurance $50/month
Condo fees which includes heat and water $300
Total costs: $911.58

So, you should make at least $100/month cash flow for maintenance, vacancy etc. Total investment $0.

This entire building is in foreclosure because it was sold to people who didn't understand investing. Once all the units sell at a price correction, the building value should increase back up to market rates. So on paper, you're net worth will increase $40k. Meanwhile your tenants are paying down the principle as well, probably about $100/month, so each year your net worth increases there as well.

If you refinance after the value goes up, take the 40k and buy two more similar properties, you'll have $80k more in a year or two, plus the cash flow. Rinse and repeat. If property values increase by 10% your net worth (on paper) makes another 10K/property. In two years you could be looking at increasing your net worth, on paper, close to $150k, from no money.

If you want to know more on how to find/buy these kind of places and what you can expect afterwards, I'd suggest you buy "The Simple Solution to Canadian Real Estate Investing" and read the associated blog www.easysafemoney.com, the site/book is basically preaching this philosophy as well, but goes into much more detail, including where to find the initial money and all sorts of things you may or may not encounter. 

Now, I'd also suggest you diversify and buy stocks, as well as owning your own business. Notice I didn't say diversify in the way that brokers do. They mean buy different stocks which, at the end of the day is still stocks, I mean stocks, real estate and businesses.

Finally, you'll notice I only refer to "on paper" net worth. Until you sell, that's all you'll have, and I wouldn't recommend selling these cash producing properties. The nice thing is, until you sell, your net worth is growing tax free as well.


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## Square Root

Best advice would be: get a good education, get a high paying job, save a good proportion, don't get divorced, make good investments (ie buy low sell high), generally don't waste money. Simple, eh? Personally, I broke many,(most?) of these rules and things worked out great regardless.


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## Mookie

My wife and I passed the $1M mark a couple years ago, including our house. We're in our early 40's now. This is our "get rich slowly" method:

1. Track your income and expenses: The first step to controlling your spending is to know where your money is going. Once you know exactly what you're spending your money on, you can adjust your behaviour to minimize spending on things that don't give you enjoyment or build your net worth.

2. Live Below Your Means: Just because you make a lot of money, doesn't mean you should spend it all. Would you rather look rich or BE rich? For example, do you really need two cars in your family? My wife and I have one (12 year old, but reliable) car that we share, and we're fine. My neighbour and his wife each have high end luxury vehicles, and they seem to get new ones every couple years, meanwhile I take the bus to and from work. They probably think we're not doing so well, and can't afford a second car. I suspect that I will be retired long before them.

3. Marry the right person: If your spouse doesn't share your financial goals, you are doomed. Speaking from personal experience, I believe this is the biggest financial decision that anyone can make. Of course, once you're married, you also need to STAY married.

4. Be smart about the house you buy: Think about resale value when buying your house, and make sure it's a place you want to live for a LONG time. Moving too frequently will kill you in real estate fees and property transfer tax. If possible, get a house with a basement suite that you can rent out for extra income. Also, don't bury yourself with a huge mortgage, and pay it off as quickly as humanly possible. 

5. Get a good paying job: It's so much easier to spend less than you earn if you earn a decent salary. Do whatever you need to when you're young to land a great job, and then work hard to get promoted. If you're lucky enough to work somewhere with a defined benefit pension, stick with the job, even if you don't enjoy it. It's amazing what your pension will be worth to you later when you retire.

6. Don't have kids: I realize that most couples (including my wife and I) will want to have kids. If you do, then at least go into it consciously knowing that it will cost you big time. If your only goal is to build wealth, skip the kids.

7. Maximize your RRSP / TFSA / RESP: Pay yourself first and minimize your taxes by always maxing out your RRSP and TFSA every year. The only exception would be if you're not yet making a lot of money, then the value in maxing your RRSP now vs. later is limited. If you have kids, set up an RESP on the way home from the maternity ward, and max that too, so your kids can get a good start on earning their millions.

8. Invest wisely: Learn as much as you can about investing by reading investing books from the library, reading all the great personal finance blogs out there, and talking money with friends, family and co-workers. Invest in solid companies that you understand, and that pay a decent dividend, and don't try to time the market. The more you learn, the smarter choces you will make.

9. Minimize your taxes: Learn about how RRSPs, TFSAs, dividends, capital gains and regular income impact your taxes, and do everything you can to minimize your tax hit. Look into ways to income split between you and your spouse if your salaries are not equal. 

10. Reward yourself: Many of the above items sound like all work and no play. It doesn't have to be. If there is something you really enjoy, and it costs money, then discuss it with your spouse, budget for it, and have some fun along the way.


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## Just a Guy

Mookie said:


> 2. Live Below Your Means: Just because you make a lot of money, doesn't mean you should spend it all. Would you rather look rich or BE rich? For example, do you really need two cars in your family? My wife and I have one (12 year old, but reliable) car that we share, and we're fine. My neighbour and his wife each have high end luxury vehicles, and they seem to get new ones every couple years, meanwhile I take the bus to and from work. They probably think we're not doing so well, and can't afford a second car. I suspect that I will be retired long before them.
> 
> 3. Marry the right person: If your spouse doesn't share your financial goals, you are doomed. Speaking from personal experience, I believe this is the biggest financial decision that anyone can make. Of course, once you're married, you also need to STAY married.


Personally, I don't agree with #2, I think you should increase your means if required...something like http://www.easysafemoney.com/fundamental-flaw/

But #3 is a must.


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## Dmoney

Just a Guy: At your earlier post -

I have a friend who is taking a similar approach to your real estate strategy, but with single family homes in the $100K to $150K range. 

He's finding the numbers don't add up quite as well as what you have in your post, but his ROE is still substantial. He's getting rent of ~$1,000, financing roughly 80%, at rates much lower than your conservative 6%. 

He's not baking in much capital appreciation above inflation, but his approach is that the tenants pay the mortgage, and the value increases modestly over a long period. 

My only problem with this strategy is that in Toronto, there aren't any huge deals like this to be had. Much more competitive environment in the GTA. I don't have the time to deal with any problems that arise in another city, so it has to be something that can be done easily in Toronto.


----------



## Eder

larry81 said:


> +1 for the millionaire next door, very good book !
> 
> my tips:
> 
> 1. work hard
> 2. save as much as you can
> 3. invest wisely
> 4. don't purchase 'status' (ex: flashy things)


#1 is the most important quality to success...but normally discounted by younger people (my own kids included). Work hard and the opportunities will fall at your feet (no one wants to offer a canine seducer a break)


----------



## Just a Guy

Dmoney said:


> Just a Guy: At your earlier post -
> 
> I have a friend who is taking a similar approach to your real estate strategy, but with single family homes in the $100K to $150K range. He should look into financing that last 20%, even if he writes off part of his residential house mortgage in the process.
> 
> He's finding the numbers don't add up quite as well as what you have in your post, but his ROE is still substantial. He's getting rent of ~$1,000, financing roughly 80%, at rates much lower than your conservative 6%.
> 
> He's not baking in much capital appreciation above inflation, but his approach is that the tenants pay the mortgage, and the value increases modestly over a long period.
> 
> My only problem with this strategy is that in Toronto, there aren't any huge deals like this to be had. Much more competitive environment in the GTA. I don't have the time to deal with any problems that arise in another city, so it has to be something that can be done easily in Toronto.


100k seems to be a magic number on a per door cost. Much higher and the numbers get hard to cash flow, but it depends on the place. $150 is still workable.

I used 6% because anyone buying today will hit that interest rate before their mortgage is up (remember we're talking about 25 years into the future). If you bank the profits today when you can get 3%, you can handle 20 years from now when they are back to the historical 8%. If you calculate at today's rates, then your risking it being cash flowing in the future.

Capital appreciation is bonus, even if it depreciates he makes money because someone else has paid it off.

I think you can find stuff even in GTA. They may not be very common, but they do come up. The other alternative is to go for multiple doors using the magic number. A 4-plex for $400k may work. I'd get a realtor to put you on a list of when properties in a certain price range come up. It's all automated, and doesn't cost them anything to do. 

Even still, there's no hurry I've waited years at a time for a deal to come up. That's why you diversify. I work on stocks when real estate is bad. I also have my business to run...and new ones to explore.

Don't try and force a deal.


----------



## Oilers82

Dmoney said:


> My only problem with this strategy is that in Toronto, there aren't any huge deals like this to be had. Much more competitive environment in the GTA. I don't have the time to deal with any problems that arise in another city, so it has to be something that can be done easily in Toronto.


Agreed. The RE investment strategy is very difficult (never say impossible) in the GTA these days with prices the way they are. I took a long hard look at RE investing a couple years back and decided to shy away because the numbers didn't make sense. You also need to make enough capital to start up that cycle of income-generating properties.

Mookie no truer words than #3 on your list!


----------



## Jungle

Mookie that was a great post, thank you for spending the time to write all that out! Hopefully this thread helps a lot of people.


----------



## indexxx

holy crow- where are these $60,000- $100,000 properties?? I need to get the hell out of Vancouver... 1 bedroom apt in a crappy eastside building will start at least $200-250k. Studios apts start at 150-175k.


----------



## Causalien

Here's my waterfall plan. Escalating investment based on the cost of capital of each investment. The reasoning is time and leverage. Obviously if I just stay with step 1, it'll take about 40 years to get there.

Step 1 leverage ratio 0%: To begin, have nothing but time, Networth $0: Find job. Work until networth is 50k.
Step 2 leverage ratio 20%: Next, some savings from job: Start investing/trading from 50k to 200k
Step 3: leverage ratio 500%: Now, enough money for condo or rental units: RE investment from 200k to 500k
Step 4: leverage ratio 0%: Can finally buy businesses: Buy businesses from 500k to $1million


----------



## Just a Guy

indexxx said:


> holy crow- where are these $60,000- $100,000 properties?? I need to get the hell out of Vancouver... 1 bedroom apt in a crappy eastside building will start at least $200-250k. Studios apts start at 150-175k.


A quick search on MLS showed me Three places in Surrey between 78k-106k, 10 places in Richmond...you just have to look a little outside.

For GTA people I found apartments starting at $44.5k, 3 bedrooms for $69k.

Not saying any of these are in good areas, or are a good investment just that they exist.


----------



## ddkay

Yeah there are $50K apartments/condos if you want to buy in North Etobicoke or Jane & Finch


----------



## mrPPincer

indexxx said:


> holy crow- where are these $60,000- $100,000 properties?? I need to get the hell out of Vancouver... 1 bedroom apt in a crappy eastside building will start at least $200-250k. Studios apts start at 150-175k.


That's just crazy. If I had work in Vancouver I'd live in a van and shower in the YMCA or something.


----------



## HaroldCrump

mrPPincer said:


> If I had work in Vancouver I'd live in a van


The parking spot for the van will cost $100K a year


----------



## SlowandSteady60

Quick reply for now but on the Real estate ideas, look for student rental units, near a College or University, look for responsible second year students who are serious about their studies, take care of your condo and your students and all is good. Real estate in Toronto, as far as I can see, does nothing but go up. For a good read, "Building Wealth One House at a Time" by John W. Schaub is an excellent read. Being a millionaire is very achievable but it takes patience and contrary to what others have posted, I'm a "richer" man with two grown boys who are as frugile as their parents. Having kids is a good thing. Good luck to you. Money isn't everything.


----------



## ghayoor

*I am Also on the way!*



crazyjackcsa said:


> I imagine the thread will be full of examples of the old adage "It takes money to make money" and survivorship bias.
> 
> How to make a million dollars: The recipe.
> 
> 1. Get good paying job.
> 2. Save money.
> 3. Invest that saved money in something (Stock market, Real Estate, whatever).
> 4. Wait until you have a million dollars.
> 
> 
> 
> 
> I screwed up the first step.
> 
> 
> 
> With a family income of 60k a year and two small kids, it'll be a long time until I end up with a million in cash. But I'll get there (when a million is only worth 500k today)
Click to expand...

You are 100% right that is all we need to do in our life.I am also going to finish my first step then will consider else remaining what do u say about rapid progress?


----------



## Berubeland

It occurs to me that the key to accumulating wealth is to play both a good offense and defense. 

1 - Make good money
2 - Don't spend it all

I haven't heard of any millionaire single mom with three kids making $20K per year who saved all the money.

I haven't heard of people who make a mint but spend more making it to wealth either. 

The way I look at it is you have to think like a beaver. (Canadian Eh!) 

Water (Money) flows into your pond and you build a dam to keep it there. But you can never build a dam that doesn't allow any water to flow out because it will bust (your will power lets you down). Some of your money has to flow out, but if you can build a decent dam...you'll keep a lot of it. The bigger and more powerful the river flowing into your pond is...the more water you let out but you can also keep more water to use. 

Now if you have no water (income) flowing into your pond, it'll dry up in no time. If you don't build a dam to keep the water from running away...there is no accumulation. 

You need a good flow of water and a good strong dam to make it as a beaver. Also no one ever accused beavers of being lazy.


----------



## indexxx

HaroldCrump said:


> The parking spot for the van will cost $100K a year


I know a guy who bought a condo in a new development in Vancouver, then two weeks later decided to buy a second, identical unit in the same development (wealthy guy). In that two weeks time, the property decided they could charge an additional $30,000 (yes THIRTY grand) for his parking space. So he got his first unit for $300K with a parking space, and his second two weeks later for $330k. Ridiculous.


----------



## RedRose

*Beruberland,* I love that analogy of saving like a Beaver. Yeah! eh?

Where the dam is will power, what about those unexpected things along the way.
In my case I have accumulated some wealth but have no expertise how to invest it.

Do people recommend the Banks wealth management people or with private firms like Ed. Jones or something similar?
I am not in Toronto.


----------



## KaeJS

Berubeland said:


> It occurs to me that the key to accumulating wealth is to play both a good offense and defense.
> 
> 1 - Make good money
> 2 - Don't spend it all


This is advice on how to SAVE a Million Bucks, not how to MAKE a Million Bucks!


----------



## Berubeland

Hi Red,

I've been hanging around here for a while now and this is what I've learned. 

1 - You are probably best off hanging out here for a while and listening in the investing forum for a while

2 - After a while you will start to understand different approaches to investing. One will start to appeal to you as something that sounds interesting. Maybe you like the idea of dividend stocks or the couch potato strategy

3 - Get a self directed investment account

4 - Try out some strategies in a virtual account 

For Instance I can tell you that I "bought" the 10 highest dividend paying stocks in Canada about 2-3 years ago in a virtual account and I'm still evaluating the results which are not as bad as you would expect. 

5 - Dip your toe in and give it a shot. 

Prosper


----------



## Berubeland

KaeJS said:


> This is advice on how to SAVE a Million Bucks, not how to MAKE a Million Bucks!


Ok here's a clue on how to make a million bucks. 

Give up getting a job. Become self employed. 

My very first business I was "making" (grossing) 25K - 50K per month for about 5 years. You can take it from me that it doesn't matter one bit how much you make. What matters is how much you get to *keep* after expenses. 

I did not get to keep very much. 

In my current business I keep a lot more.

When you see those big numbers and big checks roll in, you get very impressed with yourself and start to spend money on a lot of stuff that doesn't matter one bit which includes impressing your customers with nice wheels and a fancy office. 

I'm the person who used to break out in hives when payday, rent day and mortgage day were in the same week. And if you think it's a hardship being a slave to your boss, try being self employed where you have the worst boss ever and you're a slave to your clients and your employees and your banker. 

It's tough but if you are tougher you can make really good money working for yourself.


----------



## indexxx

RedRose said:


> *Beruberland,*
> 
> 
> Do people recommend the Banks wealth management people or with private firms like Ed. Jones or something similar?
> I am not in Toronto.


Most on here are here because they enjoy self-directing their own investments through simple purchase of stocks, index funds/EFTs, DRiPs, and more complex instruments like options. The goal is to not lose a VAST percentage of your eventual wealth through the fees that one pays to an advisor working for one of the investment companies/banks- they sell you their products, not what is necessarily in your best interests. You could, however, find a 'fee-only' financial planner who will look over your current and future needs and help you to construct a plan- so you might pay $300 for a couple of hours of advice tailored to your goals that you can implement yourself. Whereas with an investment firm, you will pay ongoing fees and sales charges that eat away huge percentages of your returns over time. That 2% or whatever is taken out of your returns, every day, robbing you of the opportunity of compound interest on that money.

A great place to start is with the "Wealthy Barber Returns, released last year. Great, easy to read book on finances for the average Canadian.


----------



## RedRose

Thank You, *Berubeland and Indexxx* for your kind information.

I have to make the transfer soon on a T2151 and it must go to a registered plan, my pension plan or an annuity to avoid taxes.
I need to do this soon as it is just a year now since my husband died. It is his commuted value of his DB pension.

I can't afford to wait any longer so if I transfer to say RRSPs at a Bank and let their Wealth Mgmt look after it for now.
Would that be a huge mistake? I know I would have fees to transfer the funds at a later date to an annuity or something like that.
I am not that savvy yet and may never be. 
I haven't been able to find anyone that will give me advice for a fee of say $300.
They all just want to manage the amount.

I have read Pensionise Your Nest Egg, recently, which has opened my eyes to some of the products out there.
I am still not confident that I could manage the funds myself yet.
I will read the Wealthy Barber Returns next, its just I need to take some action soon. I have been stalling and trying to decide for 9 months now.
I welcome any suggestions as to my next step.


----------



## Jungle

Redrose if you just go to the bank or some name brand investment firm, they might dump your money in some mutual funds that skim 2-4% off your yearly return. (which is bad IMO) 

You would be best finding a fee only advisor (might cost $500-$1500) and tell him you will only invest in products that have expense fees less than 1% with out any other strings attached. (ie holding fees, account fees, front load, rear load fees, etc)

At least you will not be getting hosed on fees and getting un-biased financial advice.


----------



## kcowan

Transfer the money to a discount broker. If you select, TDW you can invest in efunds that are extremely cost-effective. If you go to a wealth management firm, your time here and ours has been wasted.


----------



## RedRose

*Oh Wow! Thank YOU All. *
As you may have gathered with all my anxiety and vascilating over this decision.
I am at my wits end trying to navigate in this 'unknown to me' world.
Thank you for your advice. 
I was heading to TD to one of their Wealth Management officers.
She is a CFP and a CIMM not sure what the later stands for.

If I transfer to a TDW efund can that be a registered plan account. 
Do I do it online or call a person at the bank?
I am not computer savvy either.

The only discount broker I have seen is Ed Jones.

Thank you again for pointing me in the right direction and helping me avoid the pitfalls.
I sure hope I can do this.


----------



## humble_pie

kcowan now look what you've done.

redRose needs a trustworthy advocate, preferably from within her own family.

read between my lines. You've been there.


----------



## Just a Guy

RedRose

Looks to me like you may want to look into a Couch Potato investing plan as advocated by Moneysense Magazine (www.moneysense.ca).

You can have registered accounts through TDW. Most banks will help you set up your account, since it makes them money, but you can also do it on-line or over the phone. Registered accounts may need something special done, I talked to my banker and he set up mine.

You may want to watch your fees when you start. They should give you discounted fees when you reach a certain point, and it's the total of ALL your trading accounts. They missed the total when I opened a new account and it had the full fees. 

Also, remember that the people speaking at banks are A) trained by the banks, and B) there to make money for the banks. If you make some money, that's okay but their advice makes a lot of money for the banks usually, so take the "free seminars" with a grain of salt.

I'd read Moneysense magazine if I were you...personally I didn't like the wealthy barber returns...his first book was good, the second pretty old advice rehashed so he makes more money.


----------



## Toronto.gal

RedRose said:


> I am at my wits end trying to navigate in this 'unknown to me' world.


No need to feel all that anxiety RedRose & you should not have to do it all alone. 

I completely agree with HP's comments.


----------



## CanadianCapitalist

Toronto.gal said:


> I completely agree with HP's comments.


Me too. I think RedRose will be better served by a trusted advisor. Her needs are quite different from those of us who are still in the accumulating stage. She would need the help of someone with expertise in retirement planning. I think MoneyGal made this point a long time back when RedRose first posted here.


----------



## Jungle

And that's why I suggested a fee only advisor. She will not be alone, there is no conflict of interest and they can write a plan as she is in retirement.


----------



## humble_pie

toronto.gal said:


> no need to feel all that anxiety redrose & you should not have to do it all alone.


dear Rose,

sometimes i wonder whether you might invite your daughter to join you as you plan your retirement savings. You had such a lovely vacation in the caribbean with your daughter & the grandchildren last month.

many parents do involve their adult children in their estate planning. Here in cmf forum, we've seen a number of members writing about their wills & also writing how they communicate their principal decisions & wishes to their adult children, actually quite early in life, certainly long before they become frail.

you have already told us about your thoughtfulness in wanting your daughters to inherit a part of your estate in outright ownership. As i recall, this was a consideration in mulling over the post media pension.

would, perhaps, some frank discussions with the offspring be in order. I am sure they will be happy to hear you & to help you. After all, they are their mother's children & she is a Rose !


----------



## MoneyGal

The issues in a decumulation portfolio are very, very different from an accumulation portfolio. All the discussion of licensing, fee arrangements, and investing fees are not central issues. Even estate planning is not the issue here. 

The issue is that someone who has very little investing experience - I'm not sure RedRose has ever had her own investing account - is making the decision to take a large lump sum and she needs to convert it into a stream of income that (1) is sufficient for her needs, (2) has a high probability of lasting for as long as she is alive, and (3) meets her estate goals. In addition, by taking this approach she is taking on the requirement to make investing decisions for as long as she is alive (unless she converts most or all of the lump sum into an annuity of one form or another). 

All of these issues involve tradeoffs - "if I spend less, by how much do I increase the probability my income will last as long as I do?" etc. - and she needs and deserves someone who doesn't just have a passing familiarity with these issues, but is extremely well-versed - because the stakes are too high otherwise. I am extremely skeptical that a "regular" bank advisor would have the expertise required, and a discount brokerage is worse still. RedRose's concern is not "how do MAKE a million dollars?" but "how do I make my [lump sum] last?"


----------



## humble_pie

the lasting capacity of the assets is not quite so critical a problem when one remembers that there are at least 4 of them. In addition to the late husband's looming pension distribution, Rose has an rrsp of her own, a pension of her own from her employment (she was a nurse) and a house with no mortgage.

i would like to see a responsible member of the family assisting Rose with finding an advisor. Rose seems to be having difficulty searching all by herself, so a trustworthy family member who would accompany her to appointments, take notes & discuss the issues with her afterwards would be a huge help.


----------



## RedRose

Thank YOU all so very much.
My daughter and son are not experienced in financial matters either. 
Both are deep in debt. They have come along with me and understand less than I do.

I did find one fee advisor but he wanted $1250 to $1500 to look at my options offered by the CV.
The fee advisor said he would waive the fees if I invested with his company and products.
He was beginning to sound more like the bank and insurance sales man, so I declined the service.

Will I ever get there? Thank you all so much again for your input.

Here are my choices: (and my conclusions so far)

1. Lump sum, taxable right away (no)
2. Transfer to RRSP (++fees, from what I am hearing from you all, especially if mutual funds right?)
3. Transfer to my existing pension with OMERS (buy back is possible and Voluntary Contribution, with lower fees but they manage the funds) all my eggs in one basket? the fund made 3% last year)
4. Transfer to an annuity (no legacy, unless I take riders that are more expensive and reduce the income stream, also riders on indexing, hybrid annuity but again more fees)

Ideally I would like to diversify as I have been reading but have to take the first step. 
Not sure if it becomes locked in to where ever I put it once its there.


----------



## MoneyGal

RedRose said:


> Thank YOU all so very much.
> My daughter and son are not experienced in financial matters either.
> Both are deep in debt. They have come along with me and understand less than I do.
> 
> I did find one fee advisor but he wanted $1250 to $1500 to look at my options offered by the CV.
> The fee advisor said he would waive the fees if I invested with his company and products.
> He was beginning to sound more like the bank and insurance sales man, so I declined the service.
> 
> Will I ever get there? Thank you all so much again for your input.
> 
> Here are my choices: (and my conclusions so far)
> 
> 1. Lump sum, taxable right away (no)
> 2. Transfer to RRSP (++fees, from what I am hearing from you all, especially if mutual funds right?)
> 3. Transfer to my existing pension with OMERS (buy back is possible and Voluntary Contribution, with lower fees but they manage the funds) all my eggs in one basket? the fund made 3% last year)
> 4. Transfer to an annuity (no legacy, unless I take riders that are more expensive and reduce the income stream, also riders on indexing, hybrid annuity but again more fees)
> 
> Ideally I would like to diversify as I have been reading but have to take the first step.
> Not sure if it becomes locked in to where ever I put it once its there.


This is the problem with recommending "family members" as intermediaries - there is no certainty they are better-informed than the primary family member (RedRose in this case). 

I have suggested before and will continue to suggest you find a fee-for-service financial planner who DOES NOT manage investments, who either works with or is an actuary (and thus can understand and evaluate DB pension plans and longevity risk), and who specializes in retirement income planning. There is a long learning curve associated with developing a plan and jumping in haste may lead to regret later on. You will not find anyone to do this competently for $300 and you are probably realisticly looking at 10x that amount. 

You are unlikely to be able to buy back OMERs pensionable service with the entirety of your husband's DB pension lump sum - I doubt your option 3 is truly an available option. 

You don't have to do an "all or nothing" option - as you have set out in Option 4. Also I note that ALL privately-purchased annuities will be "more expensive" than the existing DB income - you will not be able to buy the same income stream with the lump sum, for a variety of reasons. I'm not suggesting you keep the DB pension (clearly you have decided against that) but you should know that ALL your options will be "expensive" in one dimension or another, whether it is MERs on mutual funds, riders on annuities and financially-engineered products, the much higher general cost of privately-purchased annuitized income, the cost of buying professional advice to help you understand your options and develop a plan of action, *or the cost of acting without understanding what you are doing*. 

As for Humble's point about the money "not running out" - it really depends on the amounts of existing pension, their guarantees and indexing, RedRose's expected spending amounts and the chance of encountering extraordinary expenses. Just because there are four sources of income doesn't mean there is sufficient sustainable income. What if we have another sustained equity market drop?


----------



## Four Pillars

Just to add to MG's fine comment. Don't worry about the location of the advisor - it really doesn't matter if they are in the same city or province as long as they are Canadian.

And be prepared to pay.


----------



## Toronto.gal

MoneyGal said:


> You will not find anyone to do this competently for $300 and you are probably realisticly looking at 10x that amount.


Not sure how RedRose got the $300 figure, but the reason it will be much more as noted above, is because you will need a comprehensive review & plan that will take hours to complete.


----------



## SlowandSteady60

Not to rain on anybody's parade but although this is all very good and I sincerely hope RedRose gets the help she needs, should this not be brought over to another thread? The original thread was pertaining to "How to Make a Million Bucks" and I think somewhere we've strayed from the topic. I don't think this was DMoney's original intention. Sorry, just an observation.


----------



## kcowan

I agree with these concerns raised. The type of financial advisor will be comfortable with spreadsheets and will build a personal financial plan for a fee. They will not sell you any products. The lump sum will be just another part of the puzzle. Stay away from any Wealth Manager. They will manage their own wealth at your expense.

The use of TD eFunds is just a piece of the puzzle that can only be completed once a plan that you are comfortable with has been built.


----------



## buaya

SlowandSteady60 said:


> Not to rain on anybody's parade but although this is all very good and I sincerely hope RedRose gets the help she needs, should this not be brought over to another thread? The original thread was pertaining to "How to Make a Million Bucks" and I think somewhere we've strayed from the topic. I don't think this was DMoney's original intention. Sorry, just an observation.


This


----------



## Toronto.gal

Guys, just be a little patient & understanding! :rolleyes2:

So what if topic got derailed a little, it is what happens more often than not! And no worries, the discussion will get back on track and you'll be able to focus on that very important topic of all, that of how to make a million bucks!


----------



## Four Pillars

The last post about the original topic was on April 14th (by Rachelle). Everything after that is about Red Rose's issue.

I would suggest it might be more appropriate to move the (dead) 'million dollar' thread somewhere else.


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## Toronto.gal

Maybe combine it with the thread 'how'd you make your fortune?' [which can apply to past/present/future].


----------



## humble_pie

slow & steady you are right, of course, but there has been a slight emergency intervention. It's for valid reasons, so i'm trusting you will understand & be patient with this brief excursion outside the topic.

a member who has been troubled by one issue for a year now has wandered into this topic. This time, senior members are giving her very specific & sound advice, for example she needs to consult an actuary. They are hoping she will read & take some action, so that the problem can finally move onwards towards its resolution.

then the interlopers will be out of your way, promise !


----------



## SlowandSteady60

Just so I'm clear, I wasn't trying to ruffle anyone's feathers, and I certainly do hope the senior members can help this member in her plight, but the thread was started by another member looking for information. The "All important topic of "How to make a Million Dollars" isn't my concern although there could have been some interesting threads attached to it. I just feel it got sidetracked and the topic has been lost for this member. Perhaps there could be a more effective way to directly deal with RedRose and her problem on a side forum or something set up by CMF where members could take on Hot Topics with perhaps a panel of experienced Senior members to tackle such problems. I'm sure the expertise given by such people would be very informative and I'm sure some topics would be very well read by other readers. I for one find the answers to her problem quite interesting and a good read, but like I said, the original thread has been lost. Forgive me if I have stepped on anyone's toes, TG, and I hope RedRose, that the forum gives you the information you need.


----------



## GoldStone

This forum is moderated, isn't it? The standard practice is to split off-topic posts into a new thread. Most moderated forums do it when a thread gets hi-jacked. No need to argue about it. It all comes down to effective moderation.


----------



## Berubeland

You know what's worse than complaining about how the How To Make A Millon Dollars thread got hijacked by a member's very serious issue ? Hijacking the thread to point out that it's been hijacked. 

Anywhooo... 

I don't disagree with moneygal and the others about Redrose's situation however I do know what happened to my own parents. My mom was diagnosed with a brain tumour and we had no idea if she would survive. In her situation she had to take as much of her pension out as possible. (In case she died and my dad would get a very minor pension) 

They hired Scotia MacLeod and the "financial adviser" came right to the boonies to "advise" my parents on their investments. 

One stinking year later they had in the hands of this "trusted respected educated professional advisor" lost over $100,000. 

No one should listen to anything I have to say about investing. (Especially older people) however...my wish is that one of you that know a decent responsible honest fee only financial adviser send a PM to Redrose. I do not know one.

My parents would have been far better off buying GIC's. Furthermore since they fired this financial adviser and started managing their own portfolio they have done very well for themselves for these old fogeys that had never used a computer to trade stocks. My mother despite my best efforts still doesn't know what a limit order is. But she did buy Teck-B in her TFSA when it was $8-9. So maybe I should shut up. 

Anyways. After what happened to my parents it would make me feel warm and fuzzy if someone would send a pm with someone's name.


----------



## leoc2

Rose I sent a private message PM with a link to fee only adviser for you to consider.


----------



## humble_pie

berubeland your warning is excellent.

however one absolutely trustworthy member of this forum - the very best - has already supplied Rose with a sterling actuarial contact reference.

would everyone else please refrain from sending PM suggestions to Rose. Please refrain strictly from recommending advisors, etc.


----------



## humble_pie

PS all should understand that, at this point, Rose doesn't need an "advisor" of any type.

what she needs is an actuary - a real one - who can guide her late husband's pension funds into the right kinds of investment vehicles, without the penalties & handicaps that a run-of-the-mill inexperienced advisor (ie one who is not an actuary) might trigger.

i myself don't know any actuaries but i do know that Rose is being helped by the very best. As a matter of fact, in this respect Rose is extremely fortunate.


----------



## Toronto.gal

humble_pie said:


> i myself don't know any actuaries but i do know that Rose is being helped by *the very best.*


Indeed this forum has the very best members, who are helpful, kind & so knowledgeable!


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## SlowandSteady60

Berubeland said:


> You know what's worse than complaining about how the How To Make A Millon Dollars thread got hijacked by a member's very serious issue ? Hijacking the thread to point out that it's been hijacked.
> 
> Anywhooo...
> 
> You're right Berubeland, forgive me, a junior member for attempting to get things back on track for another member of the forum and diminishing the plight of RedRose and her problem. This was insensitive of me and as a wise man once said to me, "if you keep your mouth closed, you will learn. If you open it, you are just repeating something you already know." I have been a member of other forums and usually a broken thread is just moved to another thread and both are carried on. I must get used to the ways of CMF if I ever wish to become a senior member. RedRose, I hope these fine people can help you out and solve your problem and I will stay in the background as a forum reader. By the way, an actuary is a great idea.


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## MoneyGal

(I'm not Berubeland but) there's no need for forgiveness and the only way someone gets to be a senior member here is by hitting a certain post count. I agree that the thread could be split - but there just isn't that much active moderation here. However! That also means you are simply free to start another thread: i.e., "How to MAKE a million bucks, Part II!!"


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## humble_pie

what a good idea. How to Make a Million Bucks, Part II.


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## buaya

SlowandSteady60 said:


> Berubeland said:
> 
> 
> 
> I will stay in the background as a forum reader.
> 
> 
> 
> And the reason CMF has more lurkers then posters compared to other forums. The growth of any forum depends on the posting of its' members and the valuable information one can get. I am a member of a golf forum and in the general discussion section, I find very valuable information whenever someone post a question - even in financial matters.
Click to expand...


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## MoneyGal

I always thought that the reason we have more lurkers than posters is that (some fraction of) the lurkers quickly figure out that they can't sell their MLM or land banking schemes here.


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## Toronto.gal

The gals here are so smart, and forgiving to boot!


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## Guigz

Berubeland said:


> You know what's worse than complaining about how the How To Make A Millon Dollars thread got hijacked by a member's very serious issue ? Hijacking the thread to point out that it's been hijacked.


You know what is even WORSE than that? Hijacking the thread to complain about someone pointing about that the thread has been hijacked. :biggrin:

Now, let's talk about our real interest, coumpounding coumpound interest.


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## MoneyGal

I thought we were talking about how nice we all are. Or is that only the gals? :tongue-new:


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## humble_pie

guigz is a yoummy bouy from quoubec


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## thesheet

*Just started*

Im 46 and my wife and just started our path to getting a 1 million dollar net worth. I've a job that pays over 100k; but with four kids and a net worth of 70000, it wouldve been nearly impossible to reach a net worth of 1 million dollars with out big changes. Indeed, I would've been happy to have my funeral expenses covered by the end of it all!

Our path is this way. 
Talking with your partner is utterly key to my story, we would have brainstorming discussions that would last for hours! It's amazing what comes from talking. We came up with a plan. And this is it.

1) increase income. My wife finished her degree in the medical field(which she wasnt going to do) and she'll wind up making more money than I will. (that's a gain of 100g to our previous combined income).
2) plan for investing my 70g. Micro cap mining companies.... Buy on weakness, sell on strength. I use etfs(a basket of miners). I utterly love volatility because the lower it goes, the more I buy. This strategy is done because I'm starting late, but I still have 14-18 years to retirement. My wife is talking about teaching at university level AND writing a book on pregnancy and early childhood development. 
3) keep relationships, you never know.

4) continued out of the box thinking.

5) get enough rest. I work no overtime. Less is ironically more in the long term.

6) enjoy life, we decided on what we want to do for enjoyment. And cut the rest. Our enjoyment is motorcycles!

7) Keep learning. There are excellent podcasts out there. I've currently got 25 book samples related to finance etc on my kindle.... Access to the best information is key. Whether it be books, podcasts, or individuals.

Seek these people out!!!!!!

8) raise your kids well. Good on many levels, not the least of which is they'd be less of a drain on you in your later years.

9) exercise. In theory you could earn more income and have fewer expenses due to health problems. Exercise helps you think better too.'

Good luck!


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## valueindexer

An important first step to making $1m is to know why you want it. It's a realistic goal but the persistence needed can only come from something that's really important to you. As you go down the path and think about what's next, you might find that you don't need to go as far as you thought or you can take your time.

As a result of this I've refocused on doing things in steps instead of all at once. Increase assets for more security, then take a few more risks on the income side, then repeat. This lets you do more interesting work (or spend more time on other things) without having to wait for some far-off cutoff date and might even help earn more if you take a chance and it pays off. This may lead to assets over $1m some time soon but that will be long past the point where it matters to me.

Here's the general spiral of increasingly interesting and rewarding things that I'm following:

- Start a business doing something unique in the market
- Make the business profitable early on and keep it profitable by focusing on things that you can charge a lot for because few others are doing them, and things that involve ongoing revenue wherever possible
- Keep personal expenses under control and invest as much as possible in a traditional portfolio of stocks and bonds
- Figure out how each part of the business works, and then start handing it off to others, giving them freedom to find better ways to do it but making sure they go in the right direction
- Gradually get more flexibility in time spent on the business while maintaining or increasing your personal income from it
- Use this to do other things, create new areas of the business for more variety/income, or start new businesses
- Continue repeating this as your interests at the time dictate
- Sell/shut down businesses or parts of businesses when they aren't interesting enough to keep profitable or they are a distraction from other things
- Once assets are enough to cover basic personal necessities for a very long time, amounts over that may be used to invest in or buy other private businesses (not that you shouldn't invest some capital in your business before then but you can take much bigger risks with anything you can really afford to lose)
- Continually study the "why" to better understand the "how"

You can earn a lot through either employment or earning a business (and both have areas where you earn very little). When you own a business you have a bit more control to make sure that once it's established you can turn away anyone you don't like to work with. If you make the business sellable that could be a big boost at some point but it will never have anything near the stability of a stock index fund.


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## Cal

the sheet, not sure of your investing experience, but you may want to diversify your investing strategy. Second, I would recommend keeping the same expenses when your wife begins earning more income. 

In general, my life experience thus far has taught me to spend less than I earn, and to invest the difference rather than save it.

Although a million bucks isn't really what it used to be...


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## RealCanuck

SlowandSteady60 said:


> Being a millionaire is very achievable...


Actually it is not. 

Currently only ~1% of the Canadian population has a net worth of $1,000,000 (ex principle residence).

At the very peak of Boomer retirement, if the trend continues, there will be ~2% net worth millionaires.
Once the Boomer retirement wave is over, the millionaire population will drop back to its mean of ~1% or below.

This is reality.

The OP also wants his million bucks by the age of 30. 
This will be an incredible fight against the odds for him as ~1% of millionaires are in that demographic. 
Thus, the OPs odds of having a net worth of one million dollars by the age of 30 is 0.01%. 

It will take much more than having a job in the financial sector.
As others have stated -- start your own business.

Good luck.


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## thesheet

*I am diversified*



Cal said:


> the sheet, not sure of your investing experience, but you may want to diversify your investing strategy.
> 
> I'm fairly well diversified.
> 
> 1) the hardest thing an investor can do is get in at the beginning of a trend and stay with it until the end. My main holding is a silver company that I bought at 10¢ a share, I will hold that one until the end of the precious metals bull market. (which has years to go despite what the talking heads say). So that company is half my portfolio and it's just hitting growth phase...
> 
> 2) I'm diversified in other markets by virtue of just being in this society. I am in the bond market because I have debts(interest rates tied to bond market).
> 
> 3) I'm in dividend paying stock by virtue of employee stock purchase program.
> 
> 4) I've fairly high cash levels to balance risk of everything else.
> 
> 5) the junior mining suits my risk tolerance as evidenced by when I started, I lost 80% of my portfolio in 2008 but I held on and I'm now ahead.
> 
> Because I didn't invest earlier in life, I need to take on more risk. A % point here or there isn't going to do it for me.
> 
> I agree totally with you with keeping expenses lower than income.
> 
> It's a way of life!!!!!!


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## MrMatt

MoneyGal said:


> I always thought that the reason we have more lurkers than posters is that (some fraction of) the lurkers quickly figure out that they can't sell their MLM or land banking schemes here.


I am/was a lurker on many forums. You can get a lot of info just reading other peoples discussions.


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## GreenAvenue

MrMatt said:


> I am/was a lurker on many forums. You can get a lot of info just reading other peoples discussions.


Feel the same way, I love to be a lurker !


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## kcowan

thesheet said:


> 2) plan for investing my 70g. Micro cap mining companies.... Buy on weakness, sell on strength. I use etfs(a basket of miners). I utterly love volatility because the lower it goes, the more I buy. This strategy is done because I'm starting late, but I still have 14-18 years to retirement....


I agree with evrything you said except this. I would never have more than 10% of my portfolio in microcaps of all kinds. It is true that mining offers big returns but also carries big risks. In fact I would try to keep it to 5% except during periods of big runups. 

More microcaps go to zero than any other segment.


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## 1.5M

*start early*

It's easy if you start early and plan your way:
- Complete education for a good paying job, preferably by age 23. A goal of starting at 60k and growing to 100k in 10 years should be enough.
- Get a partner with the same goals.
- Postpone having children.
- Learn to invest in financial markets.
- Invest 50% of your gross income.
- Don't get a mtg. over 300k 
- $50k/year in investments will produce $1M in 12 to 14 years (for growth rates between 6% and 10%).
- Then have children (if you want them) and be a stay at home parent.

If you start late, invest 50% of your gross income and adjust your spending accordingly.


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## The_Mechanic

I have a plan. It may not be conventional or full-proof, but i'm sure I will work it out.
1) school
2) good paying job for my field
3) build some capital
4) invest the capital and grow it aggressively

this is where I currently stand. I make just shy of 60k a year and have a little over 40k in assets currently. My next planned steps are as follows:

5) Buy first appartment building (6 appartments)
6) Pay down as much as possible within 5 years.
7) re-mortgage the building and buy 2 more
8) Fully pay off all three buildings in 10 years using the income they generate plus my own income.
9) Sell all three buildings worth in excess of 1 million dollars.

Done! 
At this point I will invest the capital and have it grow, or maybe put it towards a 40 appartement complexe worth in the area of 4 million and live off the income. I am currently 26 years old and if everything goes according to plan i'll have completed this by my 41st birthday. I'll enter into my 40's a millionaire and hopefully double that million by my 50's, and double it again by my 60's. You know what they say, the first million is the hardest to make!!


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## RealCanuck

The_Mechanic said:


> I'll enter into my 40's a millionaire...


Good luck.

As stated to the OP, ~1% of the Canadian population has a net worth of $1 million.
Those younger than 45 compose 10% of the millionaire population.
Thus, you are gunning to enter a 0.1% slice of life. 

Not impossible, but you certainly have odds stacked against you.


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## Dmoney

The odds were meant to be beaten 

If in 17 years I haven't made my first million, something went wrong.

Some fun calculations of how to get there by 40 (starting from 0 at 20 yrs of age):

Invest $500/month at 16% return
Invest $1000/month at 12% return
Invest $1500/month at 8% return
Invest $2000/month at 6% return
Invest $2500/month at 4% return
Invest $3500/month at 2% return

Many ways to do it in a 20 year period.
I'm about $15,000 ahead assuming $2K saved/month and 6% returns. 
Hoping to increase savings and returns though.


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## Jon_Snow

Taking away our primary residence (320k-ish ? and mortgage free), our net worth is still around 1.2 million. Having just turned 40, things are looking good for us I suppose. But recently I am more concerned with INCOME from investments rather than big picture net worth numbers. Talked to my wife today and she agreed that once our income from dividends equals about 2/3rd's of my current salary, I can finally quit working - for a few years or for good, who knows? In any case, I need a break. For years I was obsessed about crossing a million in net worth, but once that was reached when we were around 36, I quickly realized it doesn't really mean much.


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## Square Root

1.5M said:


> It's easy if you start early and plan your way:
> - Complete education for a good paying job, preferably by age 23. A goal of starting at 60k and growing to 100k in 10 years should be enough.
> - Get a partner with the same goals.
> - Postpone having children.
> - Learn to invest in financial markets.
> - Invest 50% of your gross income.
> - Don't get a mtg. over 300k
> - $50k/year in investments will produce $1M in 12 to 14 years (for growth rates between 6% and 10%).
> - Then have children (if you want them) and be a stay at home parent.
> 
> If you start late, invest 50% of your gross income and adjust your spending accordingly.


 I have a few more suggestions: plant your corn early, buy low sell high, don't urinate into the wind, look both ways before you cross the street. Yes it is very easy.


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## HaroldCrump

Square Root said:


> I have a few more suggestions: plant your corn early, buy low sell high, don't urinate into the wind, look both ways before you cross the street.


You forgot : _Don't eat yellow snow_


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## Square Root

As someone with many multiples of the "figure" , I find many of these posts pretty naive. Those of you who have succeeded may agree. It's pretty simple:work hard, save as much as you can ,be careful with your money, and don't over invest in personal use real estate. $1mm is certainly in reach for someone with a reasonable income. I do agree that $1mm is not what it used to be and really only provides about $40,000 in income if you retire in your 50's. Not exactly lifestyle of the rich and famous.


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## Square Root

HaroldCrump said:


> You forgot : _Don't eat yellow snow_


Good one. This may be a corollary of urinating into the wind?


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## Dave

Jon_Snow said:


> once our income from dividends equals about 2/3rd's of my current salary, I can finally quit working


Jon, is your 1,2 M invested only in the stock market, or did you diversify in real estate, land, or other assets (excluding your principal residence) ? I will be in a similar position as you at that age, but right now I am at the beginning of the journey and I am getting all kinds of advice from different directions. For example, my family wants me to invest in real estate but I know deep down that I would not enjoy or even have time to be a landlord (I love REITs though). So I am curious about what others in a similar situation are doing.

Dave


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## Plugging Along

1.5M said:


> It's easy if you start early and plan your way:
> - Complete education for a good paying job, preferably by age 23. A goal of starting at 60k and growing to 100k in 10 years should be enough.
> - Get a partner with the same goals.
> - Postpone having children.
> - Learn to invest in financial markets.
> - *Invest 50% of your gross income.*- Don't get a mtg. over 300k
> - $50k/year in investments will produce $1M in 12 to 14 years (for growth rates between 6% and 10%).
> - Then have children (if you want them) and be a stay at home parent.
> 
> If you start late, invest 50% of your gross income and adjust your spending accordingly.


I agree with alot of these things, its not that difficult with a good income and partner. That's pretty much what we did was focus on the careers in the beginning, and held off on kids until we were established. This gave us alot more choices in terms of when returning (if we decided) after maternity leaves. However, I have to disagree with the stay at home part after the kids come, that's a lifestyle choice, not a financial one. In fact, it can be a bad financial one if you have held off having kids until you are established. That's a side point though.

I also can't figure out how some one saves 50% of their GROSS income. If you are in a higher income bracket and are paying over 40% taxes, you would have to live on under 15% of your gross income. That seems pretty sparse (I know doable)


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## Plugging Along

I don't quite understand the obsession from some to have a million by 40, it really isn't that much to live off of, and if you choose to have kids, then I don't think I would feel comfortable retiring with 3 times that amount until my kids are our of school. 

We hit our the magic number in our early thirties (I think 32 to be exact), this included our primary residence. We dropped to just below that number during the market crash. Right now, we're really close to that number again, not including our primary residence, because we choose to liquidate some investments and pay off our mortgage last year. Honestly, I don't think we've 'made it', nor do I feel like we have very much, or our close to our goals.

Our focus early on was not to make a million but really just to focus on establishing our carreers and our skills as much as possible. Both my partner and I finished university, and got jobs right away (not anything close to 50K at the time). I focused on developing skills and learning as much as I could to get promoted, money was and still is always secondary. My spouse realized that climbing the corporate ladder wasn't for him, so decided to consult. He gave up stability for a higher income. I continued climbing the ladder until we had kids.

We weren't always the best savers, but did always save a small amount, and paid off our debt (mortgage) as fast as possible. We increased our savings to match every promotion or raise we received by at least the same percertage. I do all the investing for us, and will admit, that I can be somewhat of a gambler (not in a good way like Marina), so I had that offset by getting an advisor that I really trust. I know that I pay higher fees, but have to admit, as of right now, I'm okay with that. He does our investing for the long term that is a more reasonable, safer approach. I have been with him, since I started investing at 21. 

We lived off of mostly my salary, and the play money and savings money came from my partners consulting, which was less stable. We managed to save a larger down payment about 38% down at the time. My partner also had a condo which we kept and rented out. We made sure that we could pay the mortgage and bills off of my lower, but more stable income. We used his consulting as extra payments, and for our high risk investments. 

I have a two fold 'investment' strategy. First is, that I have someone that I trust to manage my 'safe' investments aka the ones for retirement. Like I said before, he is a good balance for my personality. The plan we have with him will have us in good shape for retirement if nothing else happens. My second strategy is to take my gambles. I do 'week' trading (not quite as frequent as day trading, and my own little thing), I have had opportunities to invest in starts up which are very high risk, and overall have done well for me, but have lost all my investments at times. I am willing to take much higher risks, because I know we are well on our track to retirement with our advisor and other real estate. . Anything I invest outside of this, I have always been willing to take the gamble and lose it all. 

I really feel that the best investment one can make is in themselves.


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## 1.5M

Plugging Along said:


> I also can't figure out how some one saves 50% of their GROSS income. If you are in a higher income bracket and are paying over 40% taxes, you would have to live on under 15% of your gross income. That seems pretty sparse (I know doable)


I don't understand why would anyone willingly pay 40% taxes, no mater the income bracket. There are so many ways to reduce that percentage, especially for the rich, but even the middle class can optimize it.
Here's a few numbers:

(a) Two $60k incomes, with rrsp maximized => $15.8k taxes (in BC) => $44k to live on 
$60k investment/year -> $1M in 11 years at 8% growth (net of capital gains taxes on the non-registered part of investments) 

(b) Two $100k incomes, with rrsp maximized => $35.2k taxes (in BC) => $65k to live on 
$100k investment/year -> $1M in 8 years at 8% growth (net of capital gains taxes on the non-registered part of investments).

Here's how 2 people could live on $44k/year:
$19k mtg + prop taxes(for a $300k principal)
$7k food
$3k utilities
$2k phones/tv/internet
$7k cars + gas
$2k misc
$4k vacation


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## Causalien

_"Buy low and sell high"_

People need to stop spewing this nonsense.


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## Young&Ambitious

Causalien, can you explain further what you mean? Do you follow the idea of buying a good company at a good value and holding on?


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## Causalien

Low and highs are relative. When the stock market is low, usually deflation is also going on in the real world. Therefore if you with draw the money and spend it on certain item that has fallen more than the stock itself, you still earned money. Just as the opposite, as stock market rise, inflation increases and things are more expensive. A better metric is Sell high when the stock in particular rose relative to the targeted purchase you want.

The math being taken cared of, let's get to the psychology of buy low and sell high. What is high? You cannot possibly know that. Apple at $300 was pretty high and expensive, but was it a "bad" high? Bear Sterns was a great buy at $10 and the after market inside information that you just heard about them finding a buyer was amazing on that fateful day. But did you know the buyout price was $2?

Buy, when you know that the chance of going higher, (due to all the circumstances helping a stock) is greater than the chance of going lower. Accounting fraud (and any associated politically correct managerial speak) is -10%, bankruptcy is -10000% bad earnings is -5% good earnings is +3% etc. Bet on the trend will continue when the sum of all the points points to a significant sway in one direction. 

You hold, only when the stock is performing exactly as you predicted. You sell when it does not and have fallen off your previously set target "GET ME OUT" price.
You hold even more firmly when it is outperforming but only if it is out performing the average.


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## Dmoney

Causalien.... Too complicated, I'm buying GICs


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## RealCanuck

1.5M said:


> I don't understand why would anyone willingly pay 40% taxes, no mater the income bracket. There are so many ways to reduce that percentage, especially for the rich, but even the middle class can optimize it.
> Here's a few numbers:
> 
> (a) Two $60k incomes, with rrsp maximized => $15.8k taxes (in BC) => $44k to live on
> $60k investment/year -> $1M in 11 years at 8% growth (net of capital gains taxes on the non-registered part of investments)
> 
> (b) Two $100k incomes, with rrsp maximized => $35.2k taxes (in BC) => $65k to live on
> $100k investment/year -> $1M in 8 years at 8% growth (net of capital gains taxes on the non-registered part of investments).



Please demonstrate how to achieve an 8% average annual net return for 8-11 years running. Thanks.


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## Causalien

Yeah, I am not known to be good at teaching.


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## Square Root

Causalien said:


> _"Buy low and sell high"_
> 
> People need to stop spewing this nonsense.


Meant to be a joke. ie advice which may on the service seem reasonable but in reality is totally useless. Another example, plant your corn early. I was trying to poke fun at a previous post.


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## Mall Guy

1.5M said:


> I don't understand why would anyone willingly pay 40% taxes, no mater the income bracket. There are so many ways to reduce that percentage, especially for the rich, but even the middle class can optimize it.
> Here's a few numbers:
> 
> (a) Two $60k incomes, with rrsp maximized => $15.8k taxes (in BC) => $44k to live on
> $60k investment/year -> $1M in 11 years at 8% growth (net of capital gains taxes on the non-registered part of investments)
> 
> (b) Two $100k incomes, with rrsp maximized => $35.2k taxes (in BC) => $65k to live on
> $100k investment/year -> $1M in 8 years at 8% growth (net of capital gains taxes on the non-registered part of investments).


Sorry, little slow tonight . . . need to break down the numbers
2 x $60 =$120K; 
less 2 x [email protected]% = $21.6K; 
less 2 x [email protected]$17.2K (or your $15.8 - no matter); 
less 44K to live on
= $37.2K to invest in taxable or TFSA ?

$37.2 + $21.6 = $58K :encouragement:

now unless you want risk, or pushed $$$ into the market in 2009 :encouragement: where's the new 8% investment come from year after year ? (my 2009 bank stocks etc are doing ok!)

And there are those with lucrative company pensions (even DC), which restrict RRSP contributions, get bonuses and hover around the 45% tax bracket . . . good reasons to stay married, and own your own company !!!


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## 1.5M

Mall Guy said:


> Sorry, little slow tonight . . . need to break down the numbers
> 2 x $60 =$120K;
> less 2 x [email protected]% = $21.6K;
> less 2 x [email protected]$17.2K (or your $15.8 - no matter);
> less 44K to live on
> = $37.2K to invest in taxable or TFSA ?
> 
> $37.2 + $21.6 = $58K :encouragement:
> 
> now unless you want risk, or pushed $$$ into the market in 2009 :encouragement: where's the new 8% investment come from year after year ? (my 2009 bank stocks etc are doing ok!)


I am not saying that one can get 8% growth using GICs or mutual funds. And of course mandatory pensions are not compatible with a plan of becoming financially independent as fast as possible. Also I am not saying one would get 8% growth (or even above 0%) every year. That's an average over a longer period. 

The average annual return rate of SP500 (SPY) since 1950 was 11% before inflation, including dividends (SP500-historical-real-total-returns). The return of other indexes like Russell 2000 (IWM) is slightly better. A covered call strategy in SPY or IWM would reduce the volatility (in rrsp or tfsa). 
Also if one learns to speculate using derivatives, higher returns are attainable with relative low volatility using hedge-fund type strategies in non-registered accounts.


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## ibli

Doing fairly well. I would estimate about 30% is from getting lucky and buying a house in hot housing market simply because we were having kids. We wouldn't have been able to buy the house if we hadn't been saving diligently for several years. Another 30% is due to working hard and saving, spend less than you earn. We both went to university, got practical degrees with good jobs. The remainder comes from starting and selling a company which required huge amounts of work and stress and came very close to failing.

Having money hasn't changed our lives except we worry about money less and get nicer hotels when we go on vacation. We still buy used cars, our house isn't beautifully renovated, and I still cut our lawn myself. We still get stressed about our jobs, worry about our kids, get frustrated when we're stuck in traffic or burn dinner. Overall having more money hasn't made us that much happier than we were 15 years ago.

Our assets are invested in a mixture of high interest savings accounts, ETF's (VTI and XIU) and dividend stocks along with our primary residence.

My advice would be to work hard and get jobs in fields that pay well and you enjoy, work hard and save. Once you've got that sorted out read, learn and think about other investment opportunities. I've thought about real estate investments for years but never took the plunge. I read and research tons about investing and have done reasonably well in the markets. I dipped my toes in the water with some consulting and working for a small company before taking the plunge and starting a business with some partners.


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