# Feeling a little discouraged with saving. Why not just join the debt pile?



## KaeJS (Sep 28, 2010)

So, over the past while I've been getting really discouraged with saving and investing.

I strive to save $1000 per month. But sometimes I wonder why I even bother. I don't have the nice car I want and I don't go out with my friends all the time. A lot of the time I find myself "punishing" myself by not going out so that I can save money (like today and yesterday). I will stay at home specifically just so that I can save. No matter how bored I am, I will not leave the house.

But why am I doing this? It's painfully boring and lonely sometimes.

Everyone else is in debt. Why don't I just join in?

I could end up in the hospital before I even get to enjoy my money. That would be depressing.

Can someone even be well off on saving $1000/month?

Inflation, House Prices, Oil Prices...

Working at a bank has really opened my eyes lately on just how many people DON'T have money. Nobody has money.

Looking at BMO's Monthly Income Fund and using a DRIP calculator, I entered to following:

Principal: $10,000
Monthly Contribution: $500
Current Price: $8
Expected % increase of stock (annual): 0%
Years to invest: 25
Current Yield: 9%
Drip: Yes
Taxable: Yes
Tax %: 20%

After 25 years of putting $500 per month, starting with $10,000, you'd have $447.5k. Keep in mind, that is in future dollars, 25 years in the future. So, you would have to sub in inflation.

That is at a 9% yield...

Sometimes I just lose my faith every now and then. Makes me feel the whole "Everyone else is doing it" attitude, which usually isn't my style.


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## Dana (Nov 17, 2009)

Life is not either/or. You do not have to choose between being an extreme saver or an extreme spender. It is a continuum and the trick is to find a balance that works for you. 

Set some goals, figure out how much you have to save to reach your goals and add an "entertainment" column to your budget and fund it so that you can go out and enjoy yourself without feeling that you are enjoying your present at the expense of saving for your future. 

It's all about balance, KaeJS.


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## ddkay (Nov 20, 2010)

Are you against freedom? Debt = slavery. 

I would rather make a few sacrifices here and there than pay compounding interest to an anonymous lender.

But you're right. Our society is fundamentally broken. Don't let that discourage you, learn the system and take advantage of it. Be on the lookout for better job opportunities.

There was a metals & mining analyst at your bank (BMO), Egizio Bianchini, that insisted Bre-X was a real company and he "saw the gold" while the stock price went to zero. Common sense says he should have been fired. But no, BMO kept him around and 4 years later he moved into a management position and is now vice-chair of the unit he started in... WTF are the chances of that? They must not care if analysts ignore DD procedures as long as they make more than they lose. Not everything is black and white.


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## ddkay (Nov 20, 2010)

Also investing on a 25 year basis seems a little absurd. No one can see out that far.


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## w0nger (Mar 15, 2010)

feelings and emotions have no place in the investing world...


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## Karen (Jul 24, 2010)

It sounds as if you're in a bit of a depression, KaeJS, and judging from some of your other posts, that doesn't seem to be the norm for you. I think it's important that you make some changes to your life before the depression becomes a long-term problem. As Dana said, life doesn't have to be an either/or situation, and you don't have to choose between extremes of saving and spending. Why don't you consider allowing yourself $200 or $300 a month to spend on yourself even if it means dropping your savings to $700 or $800. That's still a worthwhile amount to save, and you may be able to increase it back up to $1000 if your salary increases later on.

Whatever you do, don't give in to the temptation to get caught up in the debt cycle. If you have no debt, you're miles ahead of most people and to start incurring it now would be foolish and would only add to your problems.

It's all very well for wOnger to say that feelings and emotions have no place in the investing world, but there are times when that's easier said than done. If our feelings and emotions are at a real low, it can be next to impossible for that not to affect every other aspect of our lives, including our investment decisions. I think the most important thing you can do right now is to look after yourself - give yourself permission to enjoy your life - and everything else should fall into place.


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## Jeebs (Jun 1, 2011)

So lets say you save $1,000 for 10 months every year, and for 2 months you save up $2,000 and go on a vacation.

You don't want to join the debt pile. I put myself there and although watching my debt go down is liberating, once I'm out I intend to NEVER be there again.


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## Jungle (Feb 17, 2010)

Have you looked at alternatives to going out? Such as having friends over for a pizza night to watch a game or something ?


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## Dmoney (Apr 28, 2011)

In your shoes, I'd personally tackle both problems (boredom and feeling you can't save enough) at the same time. I'd either get a second part time job that fills up enough time/ gives enough extra income to avoid boredom/not feel bad about going out and spending some, or I would look at studying something useful in my spare time.

I think you mentioned in earlier posts the CSC, which is essential to move up in a bank. That would be a good start, CFA would be great, an accounting designation and go from there. The only downside with educating yourself is it costs money which can be an issue.

As for the feeling that saving 1K a month won't get you anywhere, I look at my monthly dividend income and see it increasing steadily, and am aiming for a time when the 1K a month in savings is generated automatically. While I'm only about 1/10 of the way there, it grows surprisingly quickly when it's all reinvested.


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## Dmoney (Apr 28, 2011)

Or you could put it all on 33 Black and pray...


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## v_tofu (Apr 16, 2009)

screw the banks and their lousy fiat currency.

Invest in precious metals like gold and silver. It's a wonderful thing to look at too.


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## ddkay (Nov 20, 2010)

A gold standard is no better than a debt based money system: special interests can alter the amount of gold available. Constraining supply would dramatically impact the purchasing power of people with gold.

The current system is not sustainable or fair to society. What would be, is a debt-free currency where money supply roughly increases or decreases with population and there is only moderate inflation or deflation.

The safest store of value right now is probably short term bonds from governments that can print money (this auto-excludes municipalities), but not to get so carried away that it causes hyperinflation. Having a little USD is probably not a bad idea (remember American currency is protected by taxpayers+ridiculous military), but while the Fed continues debasing USD PMs will move the opposite direction.

The thing to look for now is the willingness of politicians to turn money taps on or off as needed. To me it seems like they will continue the easy money policies until the US itself is severely effected by inflation. The rise in commodities and equities has just been malinvestment by the usual suspects (irresponsible institutions). So commodities and equities could potentially crash even more spectacularly than last time.


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## ddkay (Nov 20, 2010)

Sorry for going off topic. KaeJS, you got some awesome advice in this thread. Hope you cheer up.


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## financialnoob (Feb 26, 2011)

Like Dana said, life is about balance, and that lack of balance is impacting you.

You can go out and do things without spending a ton of money, especially now that it's summer. Why not try to find things you can do with friends that don't cost a ton? What about shooting hoops or a BBQ at the park or a day at the beach? 

Or set up an entertainment area in your budget to allow for some fun. It is part of life and should be treated like an expense you need to account for. Then you won't feel guilty using that money.

I also think you should look towards some goals a bit shorter-term than say retirement. That way you can see what you are saving towards. 25 years is quite a ways off, and you know quite well that it won't be static, there will be lots of ups and lots of downs. There may come a time you can't even save $1,000, and there may come a time you can save 10 times that amount. The talk of the car you want to drive made me think that perhaps you're sacrificing more than you want to, which again goes back to the balance thing.


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## Helianthus (Oct 19, 2010)

...


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## Jungle (Feb 17, 2010)

WHen someone believes they have to spend money to be happy (ie shopping, drinking, resturants) I tell them to find a hobby or activity. 

The baskeball suggestion above by financialnob is a great example.


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## slacker (Mar 8, 2010)

You should live a lifestyle that you can afford.

Sounds like you want things that your income cannot provide for. 

Sounds like you have tried to curtail your wants, and is unhappy. That's not unusual. We are bombarded by a media machine telling us how unhappy we are, and the only way to become more happy is to buy their products.

May I suggest that you try to increase your income? Upgrade your education? Start a business? Get a promotion?

Yes, it does seem to require work. Are you willing to work for it so that you can buy the things you want? or do you want something for nothing?

Sounds like you're fishing for sympathy or encouragement. I think you already realize that going into debt will allow you to upgrade you lifestyle temporarily, but will be a downgrade in the medium to long term. Saving for retirement is a similar theme, save today, so that you may live with dignity when you're too old to work.

Good luck, and I hope you live a happy life.


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## HaroldCrump (Jun 10, 2009)

KaeJS, you are simply punishing yourself.
You are expecting too much to happen with your finances in too little timeframe.
You have recently bagged a job at BMO, right?
At your age saving $1,000 a month is awesome.
I would even suggest you may be saving too much.
That $1,000 is better invested, not in stocks, but in furthering your skills and education.
I'm sure BMO must have a large repository of internal training and skills programs.
Invest some of your time in training and upgrading your skills.

You also did not do the above calculations correctly.
You assumed 0% growth over a 25 year time frame.
Possible, but unlikely.
If the components of the BMO monthly income fund experience 0% growth for 25 years, we will be having big problems.
You should assume at least 5% growth rate.


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## Zara Mari (May 19, 2011)

My debts started to add up when I first began having a credit card. O I tell you shopping was sweet but bills time is definitely sour. I never really had any problems saving up back then but I guess it is true on what they say, the longer it gets, the better job you get, the higher your expenses are. I don't think we can totally eliminate having debts but we can avoid them I guess. Banks nowadays have those programs like "save - up" wherein you enroll an account and they automatically deduct a certain amount you have declared every payday, they wont give out a card for it or anything so you wont easily withdraw it. It helped me (although I still have debts) so I guess you should also check with your bank if you are interested.


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## Ihatetaxes (May 5, 2010)

KaeJS, you are in your first real job and making $33k. I was there once too and trust me I wasn't saving $1000/month like you are. The biggest thing you need to decide right now is what you are going to do for your career. How are you going to get from $33k/yr to a healthy six figure income which will allow you more spending and saving power.

My advice would be to try to get into some sort of financial sales role while you are still young. It can be a long road to get the required courses, build a client base and get to a point with substantial income but you obviously have a passion for investing and are pretty educated on it for a young guy so why not make a career of it and do something you like/love for a living?

Whatever you do, get out of that bloody call centre as quickly as possible. Customer service roles lead nowhere for the majority of those in them. You need to get into a customer facing sales role and work your *** off to build some credibility and a reputation for high service and results.

In the meantime maybe save a little less, enjoy life a little more. Take a great vacation somewhere, buy a reasonable new car like the new Honda Civic that is just coming out (get the Si) and think long term.


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## Toronto.gal (Jan 8, 2010)

*There is much more to life than just working/saving/investing.*

You can do many fun things that cost little or nothing at all, especially in the summer season & nothing wrong taking vacations you can afford.

To keep you busy, how about taking courses that your employer might pay? Or one offered by your community at minimal cost? 

You could also volunteer; behaving altruistically feels great, try it! 

I think the markets had you down, but you know that it will get better. 

Everyone goes through a blue period every now & then, it's normal, you just have to snap out of it QUICK! 

Remember, 'life is for the living'. Keep learning, stay motivated and enjoy life, you're 21 for goodness sake [the Beemer can wait another 10/20 years].


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## cooper (Jun 5, 2011)

It's very discouraging to feel like you're not getting anywhere, but there is light at the end of the tunnel. Warren Buffet says "you should be fearful when others are greedy and be greedy when others are fearful". The last 10-15 years have been "greedy" times. Fearful times are right around the corner. 

House prices are drastically over valued right now compared to historical income/house price ratios. The younger generation is suffering while the boomers have been "living it up" because of this overvaluation but things will change. History is not different this time, it always repeats, there will be a catalyst and eventually home prices will get in line with incomes. The US is the "canary in the coalmine", the home prices moved towards the income levels and still going down. 

Now is the calm before the storm in Canada. It may start next month, maybe in 5 years, no one can predict the exact timing but history shows its going to happen. Keep saving and delaying the gratification cause your opportunity of a lifetime will come if you're in the right financial position.


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## mrbizi (Dec 19, 2009)

Dana said:


> Life is not either/or. You do not have to choose between being an extreme saver or an extreme spender. It is a continuum and the trick is to find a balance that works for you.
> 
> Set some goals, figure out how much you have to save to reach your goals and add an "entertainment" column to your budget and fund it so that you can go out and enjoy yourself without feeling that you are enjoying your present at the expense of saving for your future.
> 
> It's all about balance, KaeJS.


+1.

As the old song goes...you've got to save a little, spend a little, give a little...


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## Dmoney (Apr 28, 2011)

Toronto.gal said:


> I think the markets had you down, but you know that it will get better.


Feel a little better today I would assume...
Was beginning to worry myself.


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## KaeJS (Sep 28, 2010)

First of all, I want to thank everyone for their advice.

I was not trying to sound like I was depressed. I am not depressed, I would call it more along the lines of frustrated. I apologize if that sounded like a big first post full of sap.  But its good to know that you are all such nice people, anyways. It really shows. CMF should be nominated for its empathy. 

I believe I definitely do need more balance. Maybe I should allocate another $100 to my entertainment fund while also trying to find activities that will be minimal in terms of costs.

I like the idea of studying to fill time and "save" money. I am going to see if there are courses I can take that BMO will provide or pay for.

*HaroldCrump:* I calculated it at 0% growth because it is paying out a 9% yield. The fund has been like this for a while, and the actual growth or change in price is minimal, or declines. The growth is barely there. The fund was $8 years ago, and its still $8 now.

*Ihatetaxes:* I will be trying to move up the ranks as soon as possible to get into the investing side of things. With my IFIC, CSC and 2 years of Finance in college, hopefully the bank will invest in me a little more to get something such as a CFP or greater. As for your comment about the Honda Civic SI, I'd rather stick with the current car I've got now.  What I'd really like, though, is a 2010 Mitsubishi Lancer Evo X GSR... 

*Toronto.gal:* There's too many BMW's on the road, anyway. Its lost its "prestige" in my books. The 323i is more common than a Corolla. And Mercedes look like the byprodut of Toyota having an affair with Volvo.


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## KaeJS (Sep 28, 2010)

Dmoney said:


> Or you could put it all on 33 Black and pray...


Not unless I had a crystal ball.


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## OptsyEagle (Nov 29, 2009)

With me it's quite easy. When I see something I want, I just ask myself what I think would be better and make sure I am doing the right math.

If I want a big screen TV that costs $1,000 my thoughts simply go to the math. If I earn $30 an hour and I assume my current salary was all going to go towards my current needs and goals, then this new expense would need new money.

Assuming my boss would let me work overtime and assuming I only earn $20 net of taxes. I would need to work 50 more hours to buy that TV. Since I work Monday to Friday already, I would need to work Saturdays for this. That would be about the next 5 Saturdays, for 8.5 hours per day, that I need to work to get this TV.

When I am done with that math, I simply ask myself what is better. Doing what I want for the next 5 Saturdays or that TV. It can go either way, depending on the purchase, but you would be surprised how easy it is to say no to something when you can relate it back to how many days of your life it is going to cost you. Remember, we all only have so many.


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## KaeJS (Sep 28, 2010)

OptsyEagle said:


> When I am done with that math, I simply ask myself what is better. Doing what I want for the next 5 Saturdays or that TV. It can go either way, depending on the purchase, but you would be surprised how easy it is to say no to something when you can relate it back to how many days of your life it is going to cost you.


TV, for sure. 

I actually don't mind working all that much. There was only one job I had that I really could not stand...


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## OptsyEagle (Nov 29, 2009)

KaeJS said:


> TV, for sure.
> 
> I actually don't mind working all that much. There was only one job I had that I really could not stand...


Sure. You don't actually have to do the work, but as long as you know that at some point you will need to work x to buy y, it seems to put it in the proper perspective.

Another point when you do the math, is it helps if it is done correctly. I guess 50 hours would take closer to 6 days. lol. Oh well, I doubt I was going to buy the TV anyways.


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## Dmoney (Apr 28, 2011)

KaeJS said:


> TV, for sure.
> 
> I actually don't mind working all that much. There was only one job I had that I really could not stand...


If you don't mind working long hours, I would definitely recommend getting out of the retail banking side and trying to get into the analysis/research/I-banking side of things.

I worked the retail banking gig for a bit and hated it, will be starting in an analytical/research role in the next few weeks and will let you know if I like it any better. The hours are much longer, the pay is much better and the opportunities are greater. I really don't expect to have trouble filling what little free time I have left.


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## Plugging Along (Jan 3, 2011)

You just need to remember that you're investing for the future, and that the future is really a long time. You are just starting out. It's not going to happen over night, but the fact that you are saving $1000 a month, on your salary is fantastic. 

It is frustrating when you see all these other people seeming to be enjoying life, and not worrying about money. I totally understand how you are feeling, you are doing all the right things, saving for the future, investing right, following all the rules, and then you see what it seems like everyone else living the high life, and you ask yourself what is the point. It can be overwhelming. I'm older than you, and we hit the 7-figure networth in our early 30's both have 6 digit incomes, and my spouse and I still have similar thoughts cross our minds. Every time we go to one of our friends houses or kids friends houses, and they are new and twice our size, we wonder if we should be buying a new house. 

The fact that we have many wants and will never meet all our wants. . I think having wants is actually a really good thing, it provides motivation for people to do things and better themselves. There are some that have no wants because everything has been provided for, and they may not always do anything more to push themselves. I think the frustration comes from that we all see people that are not 'derserving' based on our personal definitions of getting these wants. They are in debt, spend too much, don't save, then we start to wondering how is it that so many people are geting what they want, and not working nearly as hard as we are. It doesn't seem fair. 

What we don't see is that for many of these people, that their spending will catch up with them later, or any of their other problems behind closed doors. I think for you, you may be focused so much on the final number, and forgetting that it's about the journey to get there. You may want to find some more balance in not depriving you of life now. 

I find that one needs not only a savings/investing plan, but also a spending plan to be financially secure and happy. If you just save everything, and pass up on things of enjoyment (that you can afford), in the name of frugality, you're going to be unhappy. You need to think about what are the things in life that make you really happy, and put aside some money for them. If you know that travel makes you happy, then put some aside in your budget to do so, or what ever it is.

Try not to let what you see around you get your frustrated. You can't control that. You're not getting the whole picture. Just focus on you own picture and life.


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## slacker (Mar 8, 2010)

I don't think saving $1000 per month on a $30-40k salary is fantastic. I think it is overly aggressive. That's about 40% of your after tax income !! What are you saving for?

Unless you have some unusual requirement (retire by 40), saving 40% of your income for retirement is unnecessary and unrealistic. And in any case, spending effort on increasing your income will yield better results.

Saving for savings sake is no good thing.

To be blunt, you don't make enough money to be saving $1000 a month. Increase your income level !!


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## the-royal-mail (Dec 11, 2009)

The key here is balance. The OP is not taking a balanced approach. 

save YES
stay home to save NO

The two are NOT mutually exclusive.

I am very happy with my savings rate. I save lots of money and I spent lots of money. I waste a small amount of it too but I have NO debt and paid off my last nearly-new car in under 4 months. I have fun, volunteer, hang out with friends and make the most out of this short life.

To save $1K a month on a $33K salary says to me the OP is either living with parents, driving a junky or non-existent car and basically functioning as a university student. That is not necessary. Enjoy some of your money, just don't waste it and don't go into debt.

The call center/customer service culture is a dead end as someone said above. They use you until you burn out. Sales isn't much better. You MUST perform to their ever-increasing targets and they are continually pushing their staff to sell more. It's not a good career unless you are a very aggressive person and can maintain that pace for years and decades. Most people aren't up to this, which is why the turnover is so high and there are almost always sales jobs available.


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## Plugging Along (Jan 3, 2011)

I'm not sure why so many people have said the call centre is a dead end. That's where I started along with a few others that I know who are quite successful. 

I think like with any job, those who look forward and try to take advantage of the learning opportunities, and do beyond what is necessary will rise to the top. I thought a call centre is a great way to understand the grass roots of an organization, and usually be exposed to more areas than someone going directly into the operations. The key is getting out fast enough so you don't get pigeon holed.


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## DanFo (Apr 9, 2011)

as for call centers they pushed us to confuse old people on the phone to get a sale..sale every call was their motto ( i was in a customer service center too ....only incoming calls)...My view of the place is if your a predator you'll succeed there. I just helped the people as much as I could and got out once i had the cash i needed since I didn't like the companies premise....to be fair though the job to me was just a stop over between when i graduated to when i got a job in a related industry.

I do believe it's all about balance though 1K a month is a high savings rate if your only making 33K a year. I was doing the opposite for the last few years unable to say no to friends when they asked me to join them..I wasn't over spending my means but i wasn't really saving too much either and I never really did have time for myself..Learning to say no and to take some time for myself took a bit ..sure i miss the odd good time but things are a little more relaxed for me now and I'm not rushing from one place to another all the time..I keep telling myself i'm going to get a newer mustang...and eventhough i can buy one now i just think of how much i'd actually drive it and where i'd keep it since my driveway is full enough as it is...


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## Plugging Along (Jan 3, 2011)

That's not the type of call centre I had in mind. I was thinking of answer the calls or provided customer service or help (not sales) for the customers. I don't think it was working at a call centre was the dead end, but rather that company.


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## petulantfem (Dec 13, 2010)

Noooooo don't join me. I can't sleep at night - you don't want that.


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## petulantfem (Dec 13, 2010)

Plugging Along said:


> I'm not sure why so many people have said the call centre is a dead end. That's where I started along with a few others that I know who are quite successful.


I think it depends on the call centre, and your plans. I worked in a couple (one for about 5 years), which was actually a decent place to work for the most part and paid the bills. I should have been getting ahead while I could, but that is another story. That call centre was inbound only for Roadside Assistance.

I also worked in another call centre (though only for a month) which was outbound and sales, and every day I was sick to my stomach about going to work. It was high pressure, people standing around your desk, listening to calls and berating you if you didn't get sales. No one wanted to talk to you on the phone (can't blame them). I hated to push people to spend their money, so that job was a definite dead-end for me. I never could have lasted there. In the month that I worked there, I made one sale.


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## Four Pillars (Apr 5, 2009)

Plugging Along said:


> I'm not sure why so many people have said the call centre is a dead end. That's where I started along with a few others that I know who are quite successful.
> 
> I think like with any job, those who look forward and try to take advantage of the learning opportunities, and do beyond what is necessary will rise to the top. I thought a call centre is a great way to understand the grass roots of an organization, and usually be exposed to more areas than someone going directly into the operations. The key is getting out fast enough so you don't get pigeon holed.


+1


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## KaeJS (Sep 28, 2010)

I guess what really has a hold on my mind is that money makes money.

Everytime I spend money, I think about how I'm depriving myself in the future.

I always think about income funds and dividends. Non-stop with the income and dividends. I don't want to be filthy rich or anything, I just want to be able to feel comfortable. Knowing that I am only saving $12k/year, and houses cost about $300k for a decent one.... thats stressful!


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## the-royal-mail (Dec 11, 2009)

Money makes money? You say that as though it's a certainty.

Granted, I don't have any dividend funds, but all of my index, energy and precious metals funds have lost me several hundred dollars in 2011. I'm sure glad I haven't deprived myself of important things to buy these funds.

I don't think this is a good time to be so focused on investing. To me that is something for people who are further along in life, not students and not people in their first job out of school.


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## Sherlock (Apr 18, 2010)

the-royal-mail said:


> Granted, I don't have any dividend funds, but all of my index, energy and precious metals funds have lost me several hundred dollars in 2011.


Mine too. 

I think once they recover to the point where I can sell them and break even, I will sell them and not buy PM/Gas MFs any more.


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## Plugging Along (Jan 3, 2011)

KaeJS said:


> I guess what really has a hold on my mind is that money makes money.
> 
> Everytime I spend money, *I think about how I'm depriving myself in the future.*
> I always think about income funds and dividends. Non-stop with the income and dividends. I don't want to be filthy rich or anything, *I just want to be able to feel comfortable.* Knowing that I am only saving $12k/year, and houses cost about $300k for a decent one.... thats stressful!


It's one thing to blow all your money or spend beyond your means, what you're doing is the other extreme. You don't want to deprieve your future, yet, that's exactly what you're doing to your present. You have idea know idea what the future will hold, or when the future will arrive. You only know when it's past. You are currently deprieve yourself today, and tomorrow, and the day after (isn't that the future). If you were happy with what you are doing, I would say that's great that you're saving so much. However, I think you missing out of some of the best times of your life. 

You want to feel comfortable in the future, but will you ever know when that is? Or will you constantly worry about the future?

I wouldn't think too much about the housing costs. Right now, you have just started in your career. Salaries take the largest jumps earlier on. I doubled my first real job salary in about 4 years. Right now, you're worrying about getting a $300K house, on a $33 K salary. Stop worrying, but the time you have your down payment and all that stuff you'll be making alot more. 

Right now, focus on your career, that is the biggest investment you can make for your self. In order to do that, you need to keep you self happy, so spend a little too.


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## Jon_Snow (May 20, 2009)

I honestly didn't start getting ahead until I met and ultimately married a wonderful woman who amongst all her great qualities, believed in the "live below your means" lifestyle as much as I do. While we certainly don't deprive ourselves of much, but if we chose to have all the trappings of our alot of our friends, we would be treading water, not saving 50-60% of our income.

If I were still on my own, I would be lucky to save $1000 a month... with dual incomes we bascially bank one income, live off the other.

The original poster seems like a great individual, if and when he meets a life partner, who is hopefully as financially sensible as he is, things will accumulate alot faster for him.


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## m3s (Apr 3, 2010)

KaeJS dude, you're saving more than you have to, but it's up to you to decide if it's worth it. All that investing won't get you much ahead imo until you have more money, but saving money will put you far ahead in a few years. The investing is good experience, but you could also direct your energy to increasing your human capital and having more fun for cheap.

I saved about the same as you, at an extreme, but instead of investing I spent my time working and getting promoted. I would also spend money on fun after I'd saved it in moderation, and there's lots to do without breaking the bank. You could be happier with a simple job and low cost of living, or a challeging job in an expensive city. There are many factors to wealth besides saving all your money.

For me when I would spend money like everyone else, I always thought it was a waste for what it was. $15+ for a movie etc was a waste to me. Even nowadays I'll decide I can buy something all the jones have only to realize it's not much different at all. I recently replaced my 10+ year old bike with a gee wiz Cannondale shocks and rotor brakes I see them all with. Underwhelming and really the old bike is still nearly the same. The difference is I didn't buy it on debt I bought it long after I saved the money.

Just saving some money at your age will save you a huge amount in fees and interest. The investing won't really take traction for awhile, but you'll learn in the process. I don't feel like I ever deprived myself saving agressively but I guess I grew up to be perfectly happy with a car that works nearly as good as a new one. To each his own. Now I can afford nicer cars than the jones and not even go in debt...


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## daddybigbucks (Jan 30, 2011)

KaeJS:

Put all your energy in finding a great girl and when you do, it will all come into prespective.

My reason behind that is, you are a very focused individual but you need some help with the big picture and a great girl will provide that.

The analogy i tell my wife (she hates this analogy) that a woman by herself is like a boat. Just floating along happily but has no direction.
A man is like a motor, he always has to be going somewhere but can't just relax and be happy with the moment.

Put the boat and motor together and they compliment each other perfectly.


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## davext (Apr 11, 2010)

Gotta spoil yourself once in a while, I think that's the key. Like how I spoiled myself by leasing an expensive car under my company. I could have gone with a Kia or Hyundai but I knew I'd be miserable. Half the time I'm usually dressed like I should be driving the Kia or Hyundai but the car brings a smile to my face.


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## Karen (Jul 24, 2010)

I drive my Kia with a smile on my face - just teasing you, Dave.


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## I'm Howard (Oct 13, 2010)

I ordered a brand new top of the line Mercedes, loaded.

I came back from a flight, walked by a Mercedes that some one had keyed and broken off the hood ornnament.

I cancelled the order and kept driving the Volvo for a few more years, then my company started supplying me a car every two years.


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## KaeJS (Sep 28, 2010)

daddybigbucks said:


> KaeJS:
> 
> Put all your energy in finding a great girl and when you do, it will all come into prespective.
> 
> ...


Good girls are few and far between. Especially at my age.
However, I can see what you are saying.

*mode3sour:*
I don't know what it is. I feel like no matter what, I'm not saving enough. When I look at the "big picture" like daddybigbucks mentioned above, $1000 is like a raindrop falling into the ocean. I feel like it is getting harder to stay ahead.

I think its because I know I'm young, that pouring money into TD and BMO like I have been will greatly benefit me in the future. Of course, there is no gaurantee, but with the way TD and BMO are going, I'd think you would have to be quite the contrarian to say you would lose money long term. I just love the fact that money grows on money and because of this, I want to invest the most money I can as fast as I can, so I will receive that beautiful compounding. With market fluctuations and unexpected expenses that came up, my net worth has stayed the same for 3 months! 

Right now I am focusing on trying to get this first career off the ground. I am waiting on going back to school for the possibility that I can get it paid for. I rather wait and try to save $$$ then go ahead with it and spend thousands upon thousands... I have actually heard of people getting their full MBA's paid. That would be fantastic...


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## bmckay (Mar 10, 2011)

Finding balance is important for sure. Save your money and invest some of it. But spend some of the money you make too. I am young too, and I realize it is important to enjoy my youth. When I am in my deathbed, I am going to remember the trip to India, not all that money I socked away and sat in my house bored.


I think we are here on earth to have experiences. The world is so big and there is so much diversity. To me, what is the point if you don't go out and explore? I know everyone is different but to me it is so logical. I'm not saying go into debt, but you don't have to put every penny into a retirement or condo fund.


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## daddybigbucks (Jan 30, 2011)

kaejs:

another thing you can try to loosen the wallet but still save:

Buy items but only if you can make money on them.

for instance: I saw a small oil company going out of business and they were selling their solar panels. I wanted one for my camp but i bought 3 cuz they were such a great deal. I kept best one for my camp and sold the rest for my principal back so i got my solar panel for free.

screaming deals all over on kijiji as people usually buy first, think later.


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## valueindexer (Jun 17, 2011)

KaeJS said:


> With market fluctuations and unexpected expenses that came up, my net worth has stayed the same for 3 months!


A year is a short time to measure significant net worth changes, and 5 years is a short time to measure equity returns. That's like saying it's been raining really hard for the last 12 hours so the summer is ruined.

You need to walk or even crawl before you run, and I say this because I had a serious problem with it for a long time. In my business I'm trying a few new things now, and I expect that eventually they'll add a lot to my income and assets but in the first 6 months I would be happy just to show that I can make $100 from them after putting in a lot of time. I'll be improving them continuously, so first I need to optimize the way they make money to make sure they're efficient and after that I can optimize how much they make. This is how you have to think in investing and business - first practice with no expectations of any gain, then start applying it for a small return, then keep adjusting it until you can start making real money. And give everything a few years at least. Investment returns and net worth gains seem to happen in short bursts, but you miss those if you aren't there for the long flat periods.

You also need to carefully consider who you take goals from. When I first started reading about personal finance and investing, I decided at a young age that I would be a millionaire in my 20s (I'm far from the only one), but over time I let that go a bit because I saw that the steps I would have to take to accomplish it would be contrary to the end result I hoped for. I ended up making my own personalized goals and plans which will be too tight for 74.9% of the population and too lose for another 24.9%. Most importantly, I don't feel like I'm sacrificing now to live a different life later.

I'm still trying to be what The Millionaire Next Door calls a "high accumulator of wealth" (we've never had really high incomes but we have rapidly growing savings and we've done a lot too). But after I realized that I'm so interested in business processes that a retirement for me would be trying another way to make money, I realized that I just needed a safety buffer not a lifetime supply. I like to regularly read about personal finance and all the mistakes others make to make myself feel better about where we're going; the line about how "working at a bank showed that no one has any money" did it this morning.

Your goals may not be the same as mine, but if they are similar, what really helps for me is to use "leverage" from research and careful planning to make the most of things. We have a nice, comfortable car that's only 2 years old - but it's not expensive by any means, we made a high-pressure salesman pretend to be about to cry in the bargaining process, and we expect it to last at least 10 years so we're getting a lot from it. We also used a few years of savings (which didn't seem like much when we started) to avoid taking a loan on it; without that I wouldn't have spent as much. When I see an expensive car I assume that the person in it worries about their finances constantly, and I've noticed some very angry people in convertibles. We just moved into our house a few months ago and I'm not comfortable with the current prices so we set a tight price range, lowered our expectations, went to an overlooked area, and did some minor work with a big impact to make it what we wanted after moving in. Although my expectations were mostly to wait out the current market for 5 years we're finding that it may last longer so we will take as much time as we can to prepare financially for our next move. When you have to spend a lot, making a few smart decisions can put you far ahead of others over the long term even though it may seem like a small difference at first.


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## zylon (Oct 27, 2010)

*making a case for saving early*

Person 'A' saves 5,000 per year for 6 years starting at age 22.

Person 'B' saves 5,000 per year for 6 years starting at age 28.

After saving 30,000 both A and B stop adding new funds, but allow their savings to grow untouched.

Using interest rates of 4%, 6% and 8%, here is the account balance for each at age 60.

```
Person 'A'     Person 'B'      Difference

4% ~ 120,998        95,627         25,371
6% ~ 238,576       168,187         70,389
8% ~ 464,953       292,999        171,954
```
All figures subject to verification.


Click on image to enlarge.


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## Plugging Along (Jan 3, 2011)

There's no doubt that their is a case for saving early. However, there still has to be balanced, and if the person is constantly thinking about the future, but not living in the present, then they are losing out on other things. 

What the chart also doesn't show is that one may be better off focusing on their careers or other things when they are young, that do not add directly on the bottom line, but will in the future.


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## m3s (Apr 3, 2010)

He said he's thinking about buying a new car like all his friends. I go by the belief that cars should be earned and not financed. We all know cars are horrible "investments" and you don't need one when you're in your early 20's just because your peers do. A new car is really not much different than an old one (actually built worse imo) If you want the gadgets, buy it online and google how to install. New cars cost more in ins etc etc for young people

OP said he doesn't leave the house to save money. Basically you can spend the time increasing human capital (part time courses) or having fun without spending too much money (quite possible) If you really enjoy spending money I'd go for it and decide if it's worth it. As far as girls some of them will make you happy to just hang out at home (but you still won't see your friends much) some will make you spend a small fortune going out or else nag constantly, and the worst will take +half of that money you've saved. Chose wisely



KaeJS said:


> Working at a bank has really opened my eyes lately on just how many people DON'T have money. Nobody has money.


If this is true, we're either all be screwed over for saving or take advantage of their poor planning. I'm guessing they'll all vote NDP and screw the savers


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## Sampson (Apr 3, 2009)

It's been a long time since I've seen a "Jack and Jill" comparison. I thought those went by the wayside.


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## Karen (Jul 24, 2010)

I appreciated seeing Zylon's table. I've been surprised, since joining this forum, at the number of people who advise young people that they shouldn't be worrying about saving and investing until they're older. When I was young (am I showing my age?), the advice was the opposite; especially at RRSP season, it was routine to see charts comparing how much much money one could accumulate by retirement age by starting at age 20 compared with investing much larger amounts but not starting until, say, age 40. I don't remember any specific amounts, but I do recall that the differences were astounding. I assume this kind of information is still published, but there doesn't seem to be as much emphasis on it as there used to be.

Of course that doesn't mean that young people should not spend money enjoying being young - they certainly should - but, in my opinion, they should find a happy medium. I think it's important for people starting out in life to develop responsible habits right from the beginning of their financial lives.


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## davext (Apr 11, 2010)

Karen said:


> I drive my Kia with a smile on my face - just teasing you, Dave.


lol.. next year I'm trading in my Lexus, for a Venza or Highlander and the plan is that she'll drive the new car and I'll be driving her 2003 Rav4. I still miss my 1997 Honda CR-V. 

So i don't HAVE to have a Lexus, it's just a nice to have.


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## the-royal-mail (Dec 11, 2009)

Absolutely agreed, Karen.

I might be guilty of what you said. My reason is simple. If you read the profiles of what some of these 18-23 year olds here are saying, they basically stay home or live like university students with roomates, bicycle and kraft dinner so they can save their income for investment purposes. This is not wise. Some of them even want to forego college so they can save and invest.

This is quite different from the conventional wisdom you refer to, from a time when people in their 20s were more likely to marry than they are today.

When you are fresh out of college, you need every dollar to get setup in a new apartment, new car, furniture and related expenses. Where will this money come from if you've got 20 year olds sticking every penny in RRSPs and asking us which mutual fund to lock the money into?


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## Karen (Jul 24, 2010)

It's a matter of balance, isn't it, as with most things in life? And you may have a point, TRM, about one of the contributing factors to the different attitudes towards saving/investing these days is the fact that so many couples don't marry until much later than we did when I was young. I hadn't thought of that, but it makes sense. But it's also true that young, single people are in a better position to set some money aside than those who are married with families.

So all this doesn't change my opinion that young people should begin their working lives by setting aside a certain amount of their earnings every month, even if it's a small percentage to begin with. I believe that establishing that habit right from the beginning could make a huge difference to people's lives.


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## Karen (Jul 24, 2010)

> So i don't HAVE to have a Lexus, it's just a nice to have.


Well I hope you get your Lexus one of these days!


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## Toronto.gal (Jan 8, 2010)

Karen said:


> I assume this kind of information is still published, but there doesn't seem to be as much emphasis on it as there used to be......I think it's important for people starting out in life to develop responsible habits right from the beginning of their financial lives.


Fantastic post Karen! You once said that you're unable to contribute much to this financial forum, but that is simply *NOT TRUE.* 

You're right, the information has not changed, the major difference now however, is that we have a much higher consumeristic society than even just a decade or so ago; now people can't live with the 1st version of anything once the 2nd one is out. 

As the saying goes, "compounding in a vacuum is mankind's greatest invention" & good for KaeJS to have developed the habit to work & save early in life. He just needs to understand that he can enjoy life also without having to spend too much & to ignore what others around him have or drive [with money that is probably not theirs, but borrowed from BMO or TD, his fav. bank]. 

*Zylon:* a picture speaks a thousand words! Thanks for posting the chart.


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## ddkay (Nov 20, 2010)

From my experience personal finance is not generally taught in schools. It wasn't until after my first job in the financial industry that I began to wonder what went down on the empty trading floor I was assigned to work on. Personally, I live with my parents because rents in Toronto are in the neighbourhood of $900/mo for triple occupancy per room and $1500/month for single occupancy. A part-time minimum wage job would definitely not cover that expense. Even the more generous $15/hr union-backed student jobs from my university would barely cover that expense. Most people don't live on their own, or have 3 roommates and eat premium plus crackers and kraft dinner because doing anything else is unaffordable. IMO rainy day savings in this environment is just about the most valuable thing. Ever. Though you're right, gambling on mutual funds and using RRSPs is definitely not wise for people in this stage with low income.


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## HaroldCrump (Jun 10, 2009)

zylon said:


> ```
> Person 'A'     Person 'B'      Difference
> 
> 4% ~ 120,998        95,627         25,371
> ...


You are assuming that Person B did nothing for the 6 years.
If instead he spent those 6 years improving his skills that enabled him to make more money, he'd be able to save more than $5,000.
That gives him a chance to catch up to Person A.
There has to be a balance between starting work as early as possible and investing more time/money in increasing skills and education.


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## Toronto.gal (Jan 8, 2010)

What you say is valid of course Harold, however, the point is merely to illustrate the future value of a starting principal and does not address all potential scenarios in between.


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## zylon (Oct 27, 2010)

@ *T-O gal:* – you are welcome 

@ *Plugging, Harold* and others who think my illustration is too simplistic; that is my intention – keep it simple, start with the basics. You can set forth any example you want. My post is aimed at those who, like myself when I was in my early twenties, waste a pile of money. I was always good at saving, but as soon as I had accumulated a nest egg I would buy something. By the time I was 25 I had purchased two new snow machines, one new vehicle, 1/2 dozen used vehicles, travelled coast to coast multiple times ... all paid in cash, but nothing left in savings.

So all I'm saying is, if a young person is earning decent money, don't blow it all – save some of it. I picked $5,000 for my example because it fits with the TFSA. The first time I saw an illustration similar to mine, the numbers used were: 'A' would save $2,000 per year starting at age 20; 'B' would start at age 25; the compound interest rate used was 8%. I only wish I'd seen that pamphlet ten years sooner; but who knows, it might not have made a difference. Money management is one of those things that has more to do with maturity than with smarts or the ability to crunch numbers.

___________________
And that's all I have to say about that.

ps: thanks *T-O* for saying in a few words that which I'm trying to convey


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## Karen (Jul 24, 2010)

> Fantastic post Karen! You once said that you're unable to contribute much to this financial forum, but that is simply NOT TRUE.


Thank you for the lovely compliment, Toronto.gal. As I've said before, I know little about investing, but my strength, according to friends and family, is that I have a fair amount of common sense which has served me well throughout my life. An example of my family's faith in me: Six years ago, when I phoned my 84-year-old mother in another city to tell her I was going to marry a man from Alaska whom I knew only through my diabetes website forum, she didn't bat an eyelash. Her response was, "Well, Karen, I admit to being a bit stunned, but you've never done anything in your life that wasn't sensible, so I'm going to assume you know what you're doing." And I did; I spent the happiest four years of my life with Bill until he died of pancreatic cancer. Sorry to have got off-topic, but I couldn't resist telling the story!


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## financialnoob (Feb 26, 2011)

Karen: I second Toronto Gal's comments, your contributions here are much appreciated. And despite the name, common sense is not quite as common as it should be 

Though I will add that when it comes to love and relationships, there's not a whole lot that qualifies as common, or makes sense  But that is a great story.

Kaejs: I understand the concern with rising property prices, but don't let it get you too down. You've got a lot of time to save up and you're just starting your career. Earnings potential will increase. If you get married, there's always the potential for two incomes to help contribute towards goals.

But you've got a ton of time. There may come a time you save 10 times your current savings. There may come a time you can't save a dime. There are plenty of ups and downs to come in life. It's great to think about 25 years down the road. It's not so good to let it stress you out.

Maybe you need to set some general, shorter-term goals besides retirement. Saving for the sake of saving can feel directionless. Maybe break it up into smaller goals. You mentioned a car and a condo. Why not break it up into what you need for both and which you want? Set a goal of 5 or 6 or 10 years, whatever it may be, and figure out what you need to save towards that. Then maybe you'll see more progress instead of thinking your retirement is going to be bad.

At the same time, budget for fun. Give yourself that allowance to give balance to your life. There are a ton of things you can do for free or for very little money. And don't just think of the monetary cost so much as what it means to you and the value it brings. That way your money may feel like it goes farther, even if you're not saving it.

For example, I can eat at McDonald's for $7. Or I can eat at one of my fav Vietnamese restaurants for $9. Sure, the McDonald's is "cheaper" monetarily, but I don't enjoy it nearly as much as my pho or bun, so I'd much rather spend the extra $2 and really enjoy my meal as opposed to just filler. I'm not splurging so much as maximizing the value of my money. The $7 is a waste at McDonald's, even though it is technically less money spent.

If you can find things you like to do that don't cost much and offer great value, then you won't feel as bad doing them or justifying them against your retirement fund.


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## KaeJS (Sep 28, 2010)

I'm not so much saving for retirement as I am saving for a house. That is why I get stressed about the rising costs of property and the soon to be rising interest rates on mortgages.

A new car is a want of mine. It is not a need. I have two cars right now and one of them is in excellent shape with a brand new motor and brand new transmission as it is only my summer car. So yes, we must differentiate need from want. The car is only a want, so we can cross that off the list. (but who doesnt want a new car, seriously?)

What I would really like to be able to do is get a house as soon as possible so I can start paying down the mortgage and increase my equity. I am not so much concerned about retirement as I have a long way to go, and who knows if I'll even live past 65 with the diet that I eat. (Chocolate Milk, Sunchips, Pizza and Beer).

Once you have a house paid off, you are free. Owning a home outright is a huge accomplishment. You have nothing left to save for after that, except of course for retirement. All of your income can then be spent on the things you want. Minus maintenance costs, of course...

It is like everything in life - the beginning is always the hardest part. And thats why I want to get it over and done with now, if you know what I mean.

What I don't understand is how anyone is supposed to _qualify_ for a mortgage without a second person. With housing prices so high and with (my) wages so low, the FI's take one look at you and write you off because your capacity to repay the mortgage back is too low, regardless if you're throwing 20% down, which is completely understandable. I feel like the only way to get a mortgage is to find a competent lady friend first, and that in itself takes lots of time, effort, and money. We all know that 2 can live cheaper than 1.

And what is everyones take on cheap condo's in the GTA area (like $175,000)? Those seem a little too shady for me. They look like dumps and I feel I would have a hard time selling it. Not to mention that I don't want to be living with a bunch of low lifes, which usually is the case when purchasing lower valued homes. I could easily put 20% down on a $175k condo, but I get this feeling it would be a bad investment.

I know nothing about real estate and have obviously never bought a house before, so this is a huge gray area for me that I don't feel confident in talking about. I feel like I lack knowledge in the category of mortgages and home buying which may also add to why I'm so stressed about it.


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## Jon_Snow (May 20, 2009)

KaeJS, I am a firm believer that a major real estate correction is imminent in Canada, especially for Vancouver and Toronto. If you can wait until this correction happens, your hard earned money will go ALOT further.

I pity anyone trying to get into the real estate market at the current price levels.


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## DanFo (Apr 9, 2011)

I had no problem qualifiying for a mortgage on my own when i started looking i was making ~38-40K then... as long as the bank thinks your jobs steady they'll probably take a shot I think they qualified me for 250K (25 yr fixed) I only used 150 when i finally bought, I didn't want to eat up too much of my income on housing expenses. I don't live in the crazy city market but my area has skyrocketted lately my neighbours are listing for 230K at the moment. It would be easier with 2 people. I do have a border in the basement but the rent is minimal.. I'm more or less just helping a friend out....but I'm away a lot and never have to worry about the house.


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## financialnoob (Feb 26, 2011)

KaeJS: I understand where you're coming from, as we are saving up for our first place as well. It's easy to get discouraged, but remember that houses are investments too, and all things cycle. There will be a better period to buy, I agree with Jon about that. The Toronto real estate agents have predicted a slight decline for this year, which is much better than the 5-10% gains over the past decade.

Home ownership sounds very important to you. Is living in the GTA essential as well? The average home price for other areas is significantly lower. Kitchener/Waterloo, and London have $150K lower average house price. Ottawa is $100K lower.

As for the $175K condos, I'm not a huge fan but then again, it's not like I can afford the $1.5M house down the street which I am a fan of.  It's the property ladder, and a first step. Some are better than others. At the same time, you might want to wait and get a shoebox downtown for a bit more. Nicer areas, more chance of appreciation, easier to sell in the future (though again, I expect the market to come back to reality soon so I'm talking after that happens).

As for the lack of knowledge, you're clearly very bright and can pick it up quickly. I'm still a bit of a noob myself, but there's plenty of resources online to get familiar with. You can certainly learn about it. And think of it as part of your home ownership process. Within the next few years, you'll be in a solid position to buy a place with a lot in terms of down-payment, so you should start familiarizing yourself with it all for when the time comes. You should also get a feel for neighbourhoods you might want to live in, prices in that area, and how they're trending over the next year or two or three so you have more info when the time comes to buy.


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## KaeJS (Sep 28, 2010)

Looking at something like this right now:

http://www.realtor.ca/propertyDetails.aspx?propertyId=10727441&PidKey=1202475393


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## Jon_Snow (May 20, 2009)

Despite my earlier words to wait for a market downturn, I wouldn't blame you one bit for jumping on something like that... especially with rates at what they are.

Something like that in Vancouver would be pushing 300k+. It's simply out of control here.


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## KaeJS (Sep 28, 2010)

The only thing that I don't like about it is the fact that $309 for condo fees really sucks, especially when I don't know exactly what those fees include.

Also, if you pay condo fees, do you have to pay property taxes as well? does anyone know?

Because if you don't have to pay property taxes, then the $309/month doesnt look so bad.


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## the-royal-mail (Dec 11, 2009)

The condo fees are separate from the property taxes. You have to pay both to separate orgs.

As well, when something in the house breaks, YOU have to pay for that. No more calls to the landlord for quick and easy repairs. If the roof springs a leak, ditto.

Home ownership is a stereotypical goal for many people these days, but really, it carries a huge obligation in that if you lose your job or end up being moved elsewhere you'll be on the highway with thousands of other commuters who had the same thing happen to them.

As well, I am familiar with those units you linked to. They are almost like motel style, with two levels and common balcony. So expect your neighbors to be out on their deck in front of your door talking and smoking. Highly recommend to go and visit this place in person first. Seems to be a high turnover complex. Quality units, very well located away from the mass of humanity that resides around Square One.

As a young person starting out, I just don't see why you need to be in a rush to buy. Today it's low interest rates, tomorrow it may be lower property rates but higher interest rates. I don't think the system can be beat, if that's what you are thinking.

People who buy houses tend to be further along in life.


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## m3s (Apr 3, 2010)

Geebus at your age I rented a decent apartment for the price of the condo fees. Mind you it wasn't GTA and it was nothing fancy but I had my own space. My little brother wants to buy a house and I told him the same thing, it's pointless unless you're gonna stay there a long time imo

It depends on your lifestyle and situation but houses are far cheaper outside of the GTA, and your salary won't change much


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## financialnoob (Feb 26, 2011)

KaeJS: Condo fees are confusing because they can cover so many things. Generally, they seem to cover any roof, drainage, gardening/landscape, snow removal, and water. Property taxes aren't generally covered. I don't want to say never since I've even seen cable included in those fees.

Some places (generally older) will include the heat and/or hydro in those fees as well, which makes it much more attractive. If it seems extremely expensive, ask about that as it may include those utilities.


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## joncnca (Jul 12, 2009)

get a total breakdown of the condo fees, if not the exact amount, then precisely what services it'll cover.

i used to own a condo in which the condo fees covered electricity for the dishwasher, washing machine, and stove, but all plug-in appliances were on my own meter.

it was a downtown toronto lakefront property, so the fees were outlandish. figure out how much of a reserve fund the condo corporation has, because if they don't have much, you will expect the condo fees to increase. 

my condo was in debt like $200,000 only 2 years after construction!!! then when the HST came in place, they increased our condo fees by about 30% and tried to blame it on the HST. a lot of us complained about the lack of transparency and over their ineptitude with basic arithmetic, but to no avail. i think people in the building are paying something like $475 for a 700 sq ft unit now.

oh and we were never clear about where the fees were going, because our amenities were constantly 'under repair'


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## ddkay (Nov 20, 2010)

good tips from joncnca. A lot of condos and especially the new ones are a fiscal nightmare. If you're going to buy a condo get a history of their financial statements. See how much is in their reserve fund, and what their projections are for future expenses. For example most equipment has 20 year life cycle or less. Within 20 years you can expect a building to replace its elevators, cables for its elevators, boilers, make up air systems, corridor carpets, rooftop, gym equipment, mailboxes, door lock, exterior caulking, and the list goes on and on. It literally takes millions of dollars. Any building that is well managed will be well maintained. You can ask for records of completed work.


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## marina628 (Dec 14, 2010)

Before you buy a condo try hanging around the building a bit and ask other owners what they think.My friend went to look at a condo last week and a lady stopped her before she got in the elevator and told her that the unit was for sell because a 'nutcase' was living in unit above the unit and the guy was stalking the single lady so badly that she was moving .My friend is also a single lady and she thanks the 'nosy neighbour' as she likely saved her from a nightmare.I don't think i would like a condo lifestyle even if it was the 28 million dollar unit downtown lol


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## the-royal-mail (Dec 11, 2009)

Also hang around the place on the weekend when people are actually home and observe who is coming and going. Going during the week when people are at work is not the best time to observe the neighborhood and people who live there.


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## KaeJS (Sep 28, 2010)

I did actually go to see the place.

I changed my mind on it instantly. It seems nice, and I talked to a few people that lived there. They said it wasn't bad at all.

However, I don't like the layout of the whole thing. It seems very close-quarters, and sound seems to travel through walls and ricochet off of other buildings. Friggin' echo's everywhere, people talking, car doors slamming, yuck. forget it.

I think I'll just stay at home.. for now.

Save up some more dough and hope for this housing market correction. Would be nice to see a 7-8% correction in about a year, buy in with a bigger DP and still catch the low mortgage rates.... 

But that's wishful thinking.


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## cannon_fodder (Apr 3, 2009)

I have never, and would never, buy a place if I was single. To me I can better improve my net worth through investments. I don't tie myself to a particular location (freedom to move where better jobs or living is), nor the debt. The difference between the costs of owning versus renting equivalent places are large and if you are an aggressive and astute investor using similar leverage that a mortgage brings you can easily outperform home ownership.

Only once have I ever purchased a brand new car and that was my first car. Since then it has been used cars and they've lasted over 10 years each and every time.

Perhaps a change of mindset could help you recognize the power of that $1,000/month you are putting away. Calculate what that $1,000 would be upon retirement (if that is what your savings goal is). Let's say it will be worth $15,000 in 30 years. Now, when you save $1,000 per month think of it as you are adding another $15,000 to your retirement fund 30 years hence. The power of compounding over such a long time can give you renewed enthusiasm of saving. 

And I definitely would support saving now rather than waiting. Whether it is correcting the flight of a spacecraft at the beginning of its flight, cleaning up a house, or investing, a continuous but small amount of effort early on often trumps a Herculean effort much later when attempting to get the same result.

Ingrain good habits now and you will be far ahead of your peers (and perhaps your own expectations) years from now.


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## Sherlock (Apr 18, 2010)

KaeJS I'm in a similar position to you... Renting a 1 bedroom in North York for $1000/month. Renting sucks, but I can't afford a house. I could afford a condo but don't see the point in paying more for something that will provide me with the same lifestyle as I already have. Living in a building sucks: dogs barking, kids shouting as they walk past my door, other people's smelly cooking wafting into my living room, I always hear the garbage chute slamming, have to share the laundry machines with other tenants and usually have to wait, no place to work on my car, I can think of hundreds more things. Not to mention the condo fees. I want a detached house, with a garage. But that will cost 800k in any decent neighborhood in the GTA, no chance of affording that until I'm 40. Have you considered leaving the GTA? I've got a decent job here but am slowly starting to look for work in other cities. In Kitchener/Waterloo a newer detached house costs about 300k. In London it's even cheaper, 200k.


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## realist (Apr 8, 2011)

KaeJS said:


> The car is only a want, so we can cross that off the list. (but who doesnt want a new car, seriously?)


Me. A friend of mine recently turned down a free car from his family. The insurance alone in Toronto makes owning a car for many people a waste of money unless you need it to commute to work. For less than the cost of insurance my wife and I can rent a car at least one weekend a month.

I gather that you live at home with your family? Do you pay rent? Do you get along well with your parents? If you do, then in your position I would stay there as long as you can stand it, and keep putting money in the bank. I was paying rent and get along better with my family when we don't live under the same roof so I was itching to move out. (I also cut my commute from 1.5 hour bus ride to a 15 minute walk). 

I share your desire to own a place, but for right now we have crazy cheap rent and a good location close to my job and the subway. The longer we stay here, the bigger the downpayment we can make for a house and we can still afford to go out semi-frequently as well.


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## KaeJS (Sep 28, 2010)

*realist,* (and I like your username, by the way)

A car is a definite must for me. No doubt about it. I love cars. To not have a car... would just be the worst feeling. I have been driving ever since I turned 16, and its frustrating when my car is in the shop for one day.

Yes, I live at home, and although it can be frustrating at (a lot of the) times, you are right. It helps to stash some cash in the bank.

If I ever won upwards of $100k, I would more than likely blow $50k on the car that I want. In fact - I _would_ blow 50k on that car.

.... Investing is good, but money isn't worth anything if you don't spend it on what you want.


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## sags (May 15, 2010)

Hey.......if you are saving "anything at all", you are doing a lot better than millions of other Canadians who are the proud owners of an average:

1) 3500 in credit card debt.

2) 33,000 in line of credit debt.

3) 16,000 in auto debt.

4) Lord knows how much in mortgage debt.......

Maybe people have 1, 2, 3, or all of the above, but one thing is certain.

They have already spent a lot of future paycheques.

Save if you want......spend if you want.......just stay out of debt.

THAT is the key to financial freedom, because you can change your saving or spending habits with the next paycheque, but if you are mired in debt........the choices have already been made.


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## realist (Apr 8, 2011)

KaeJS said:


> A car is a definite must for me. .... Investing is good, but money isn't worth anything if you don't spend it on what you want.


Im not saying don't get a car. Living in Mississauga, a car made my life a lot easier. It was still not a necessity for me but at the time i was either paying with my time on transit, or paying with money in a car and the money made more sense. Living in Toronto the "math" is not the same, at least for me. 

I do think for many people that say they 100% need a car, when in reality is more like 30-40% need and 60-70% want. For example my friend use picking up people at the airport as an example of why they "need" a car. You'd have to make a lot of airport pickups to equal the total cost of car ownership!


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## m3s (Apr 3, 2010)

sags said:


> Save if you want......spend if you want.......just stay out of debt.
> 
> THAT is the key to financial freedom, because you can change your saving or spending habits with the next paycheque, but if you are mired in debt........the choices have already been made.


+1


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## KaeJS (Sep 28, 2010)

sags said:


> Save if you want......spend if you want.......just stay out of debt.
> 
> THAT is the key to financial freedom, because you can change your saving or spending habits with the next paycheque, but if you are mired in debt........the choices have already been made.


Staying out of debt is the easy part (minus a mortgage, of course..)

It's wealth building to pay down that mortgage thats the hard part


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## the-royal-mail (Dec 11, 2009)

^ Millions of Canadians have great difficulty with that so-called easy part.


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## KaeJS (Sep 28, 2010)

^ Millions of Canadians put a lot of wants before needs and don't understand finance.

Sure, I live at home. But if I were kicked out tomorrow, I'd still be able to save money on a single, 33k salary, without reducing or eliminating any of my current obligations or expenses.

It wouldn't be as easy as it is now, but its definitely do-able. All I would have to do is add "RENT" to my budget. (Thankfully, I'm not there yet. )

Get a partner/friend/roommate and its even easier. 
2 live cheaper than 1.


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## sensfan15 (Jul 13, 2011)

It definitely is do-able living on your own making 30-40K/year and being able to save at the same time. You won't be living a luxurious life, but when you understand that buying 'things' doesn't really add much to your life it becomes that much easier. Im in a similar position still living at home making about 35K. I chip in by paying $500/month in rent but that also includes food. I am able to save between $1250-$1500/month. I don't buy food, and I don't buy anything in general. Just rent, phone bill, and gym membership. Now if I was on my own paying full rent I would still be able to put away $500-$1000/month. 

Granted I don't drive, but that is my choice. The bus gets me to everywhere I need to go. So do my legs, and my bike 

Cars are money pits!


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## blin10 (Jun 27, 2011)

sensfan15 said:


> It definitely is do-able living on your own making 30-40K/year and being able to save at the same time. You won't be living a luxurious life, but when you understand that buying 'things' doesn't really add much to your life it becomes that much easier. Im in a similar position still living at home making about 35K. I chip in by paying $500/month in rent but that also includes food. I am able to save between $1250-$1500/month. I don't buy food, and I don't buy anything in general. Just rent, phone bill, and gym membership. Now if I was on my own paying full rent I would still be able to put away $500-$1000/month.
> 
> *Granted I don't drive, but that is my choice. The bus gets me to everywhere I need to go. So do my legs, and my bike
> 
> Cars are money pits!*


don't make it seem like riding a bus is a cool thing to do... you probably don't get out much since bus will not get you everywhere you need to go, let's day your friend lives where bus doesn't go, what you do then? or you have a girlfriend (if you do) you'll be taking a bus with her? lol... ya cars are money pits


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## sensfan15 (Jul 13, 2011)

I just get her to come pick me up


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## financialnoob (Feb 26, 2011)

blin10 said:


> don't make it seem like riding a bus is a cool thing to do... you probably don't get out much since bus will not get you everywhere you need to go, let's day your friend lives where bus doesn't go, what you do then? or you have a girlfriend (if you do) you'll be taking a bus with her? lol... ya cars are money pits


I think you're taking that post a bit too personally.

The guy rides the bus. He doesn't think a car is worth the money. 

Whether you agree or not, there's no need to question his personal life or whether he gets out much.


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## Dmoney (Apr 28, 2011)

sensfan15 said:


> I just get her to come pick me up


+ 1000

Nothing beats getting my chauff... girlfriend to pick me up and drive me around.

Sometimes it's just not worth having a car, or if you have a car it's not worth driving it when public transport is available. A guy at work is trying to decide on his next car purchase and is casually throwing around names like Audi R8, Maserati, Porsche 911 and yet he takes the subway to work. 

Driving can be a huge hassle, if money's an issue, a car really is a money pit. Gas, insurance and parking in the city can cost thousands a year, and if you live anywhere with any kind of public transport, the bus/streetcar/subway will get you there just fine.

And chicks dig environmentally conscious guys. Fact.


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## sensfan15 (Jul 13, 2011)

@financial noob - haha no worries I didn't take offence. to blin's response. I acknowledge that having a vehicle is very handy and does give you a new level of freedom. I used to drive and it was nice, but simply not worth the money. I am very happy with my life right now not driving.

I wasn't trying to make it seem like taking the bus is a 'cool' thing to do. It is simply an easy way to save 5-20K a year depending on what you drive, the shape of the vehicle, gas prices, speeding tickets/violations, insurance, etc.

Everyone is different and we all do what works for us


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## KaeJS (Sep 28, 2010)

sensfan,

That is great that it works for you. After all, it is not about how you get your transportation, it is about running a positive balance at the end of each month. 

And yes, cars are money pits... but ya gotta pay to play.


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## Jon_Snow (May 20, 2009)

Ah, I love cars... I drive a 11 year old truck that still looks great, costs very little to run... yet when I drive past an Audi dealer the desire for something sleek, new, and fast is very strong. The Audi S5 makes me weak in the knees.  

I am constantly fighting a battle between living in the present (buying things I want) vs paying down debt/mortgages and saving for early financial independance. The desire for an extremely early retirement has been winning for the past several years.


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## KaeJS (Sep 28, 2010)

Jon_Snow said:


> *when I drive past an Audi dealer the desire for something sleek, new, and fast is very strong. The Audi S5 makes me weak in the knees.  *
> *
> I am constantly fighting a battle between living in the present (buying things I want) vs paying down debt/mortgages and saving for early financial independance. *


Jon,

You just wrote a book on my life using only a few sentences.

Great job!


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## sensfan15 (Jul 13, 2011)

Jonsnow have you been on that website 'early retirement extreme'?

I have gotten a lot of my inspiration from him!


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## Jon_Snow (May 20, 2009)

Yeah, I'm familiar with the site.... but I don't want my early retirement to be as bare bones as his... I want the ability to enjoy a few extravangances.


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