# About to turn 30, Where to go from here?



## MK7GTI (Mar 4, 2019)

Hello all, 

I have been a reader/lurker for some time now. I'm about to turn 30 and I would like some helpful information for my situation moving forward. 

Currently live in the GTA and rent. Work in Quebec making $97,000 a year with 5% company match for RRSP. I will be leaving this job in 3-4 months for a position in a MUCH lower income tax rate in another province. It will be $94,000 a year and 7% company match for RRSP. 

Current financial situation:

Chequing: $1,500
Savings: $6,500
RRSP: $36,000
TFSA: $2,200

Liabilities:

Car loan: $6,400


The next 6-8 months I will need to save for moving expenses and then plan to bring my emergency fund up to $20-25,000. My girlfriend and I have been together nearly 5 years. No plan for kids or a wedding. We also don't plan on buying a house in the next 10 years because we will probably move 1-2 times again that time. In this new province she has taken a position making $74,000 a year. We don't share any accounts and will not do so going forward. 

I paid a pretty big stupid tax in the form of cars over the past 5 years. That plus moving around for work is why my net worth is rather lower considering my income. I've paid nearly $45,000 towards my car loan in the last 2.5 years. I have absolutely learned my lessen. I plan on keeping my current car for another 5 years or more.

My question for everyone is what can I do to maximize my wealth building opportunity considering I have a solid income for the next 10 years at least?

Any information is welcomed. Thank you.


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## peterk (May 16, 2010)

MK7GTI said:


> Hello all,
> 
> I have been a reader/lurker for some time now. I'm about to turn 30 and I would like some helpful information for my situation moving forward.
> 
> ...


Hi MK7. Sounds like you are on track. I think your net worth is rather normal, not "rather low", so don't feel too bad.

Some pretty standard advice for upper-middle-class financial success is:

-Control your spending on excesses and luxury. Put > 10% of your takehome into investments/savings.
-Buy a house that you could be happy living in for 20+ years (i.e. not a little "starter home" or condo) and pay off the mortgage in 15 years instead of 25.
-Invest the remainder in a diversified stock-heavy portfolio. 

There is no crystal ball, but choosing not to buy a house because of some impending 5-10 year plan is probably a mistake. Not investing in the stock market is probably a mistake.

The two most influential things right now that will determine your later-in-life financial outcomes are your career success / salary increases, and your choice of principle residence.
3rd is your ability to control spending.
4th is your investment choices.


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## cainvest (May 1, 2013)

^^ peterk summed it up nicely.

Just to add to that ...
- Find a happy balance between spending / saving that works for you two. If you're planning on retiring early, save more!
- Fill up those RRSP / TFSA accounts, get them generating money as time is still on your side.
- Good with spreadsheets? Work on your financial plan for the future.

If you're not currently interested in a house, start saving for it now anyways.


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## Forebiz (May 31, 2018)

Spend less, save more.

Assuming you're splitting rent and the car should be paid off shortly. You have plenty of income so you should be doing the 7% match at minimum and also maxing out the TFSA every year. GF should be doing something similar. 

I see no problem with the rent vs buy mentality today as long as it is affordable enough to still save. Real estate worked out well for the guys that bought 10+ years ago but will it continue?

If you can save more you should. Do a budget and stick close to it.


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## MK7GTI (Mar 4, 2019)

I will not buy a house in the new area because it his highly isolated and very dependent on the mining companies with support most of the city. These companies will all close in the next 10 years or less. Just doesn't make sense to buy a house there.


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## peterk (May 16, 2010)

MK7GTI said:


> I will not buy a house in the new area because it his highly isolated and very dependent on the mining companies with support most of the city. These companies will all close in the next 10 years or less. Just doesn't make sense to buy a house there.


Ya- I feel you - this is part of the issue with the mining sector, and part of the reason salaries are so high, and part of the reason that the total compensation for mining sector workers comes out in the wash to being no better than being a city guy... In all likelihood, if you can't buy your own home, for various career reasons, you're going to fall behind economically even if you have higher wages. Something to consider for decisions about long term life path.

I'm in the same boat. Stuck up in Fort Mac, not sure what to do exactly.


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## Pluto (Sep 12, 2013)

Seems to be smart not to buy a home in your situation. Could be a blessing in disguise. I believe you should read personal finance and investing stuff for a while until you get a feel for the direction that makes sense to you. Read the personal finance and investing sections of the papers. Buy a couple of personal finance books. 

This guy has an interesting site and he posts on this forum from time to time:

https://www.myownadvisor.ca

The greaterfool, a daily blog, is not big on home ownership as a means to invest:

https://www.greaterfool.ca

there are lots of resources to get a general understanding of what to do next and those two are just a couple of them. There is no onesize fits all approach that fits for everyone. It has to be something that makes sense to you, and that you are comfortable with. So my suggestion is to read about the various perspectives to find out what your choices are.


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## MK7GTI (Mar 4, 2019)

peterk said:


> Ya- I feel you - this is part of the issue with the mining sector, and part of the reason salaries are so high, and part of the reason that the total compensation for mining sector workers comes out in the wash to being no better than being a city guy... In all likelihood, if you can't buy your own home, for various career reasons, you're going to fall behind economically even if you have higher wages. Something to consider for decisions about long term life path.
> 
> I'm in the same boat. Stuck up in Fort Mac, not sure what to do exactly.


I disagree that the pay in mining/cost of living is a wash compared to lower wage/city living. The income tax/provincial tax rates in certain provinces make a difference right off the top. Fort Mac is more expensive than where I'm going. The other huge thing for me personally is commuting. I don't understand the ghosts out there that travel by car, than train, than walk 15 minutes one way to their job. Absolute madness to me. 

I also don't believe that not buying a house in the short term means I will fail behind economically. I just flat out wouldn't buy a house over 500k in any circumstance, ever. So you can kick a few cities off my list right away. That is my limit and I will never raise it. So realistically I can buy a house anytime after the next 3-4 years or so and never 'fall behind economically'. 

There is a huge movement of people that will never buy a house. By choice or not. Not saying I'm in that boat but I do understand their perspective. If you live outside of Vancouver or Toronto you can buy a house. If you live in those two cities the odds are stacked against you. Just a reality.


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## MK7GTI (Mar 4, 2019)

Update:

Chequing:$5,000
Emergency fund(growing to the goal of $15,000):$5,200
RRSP with previous employer: $64,000
TFSA: $0 moved that money into the RRSP above

RRSP with new employer: $1,200 
New TFSA: $0

I sold my car and bought a bike. My girlfriend and I share her car so no need for 2. My commute each day is 12km round trip. 

I have since moved back up north and have a salary of $97,000. My new employer has a RRSP and DCPP. I put 21% of my salary in between the two programs. I get a 8% match total between the two as well for a total of 29% of my salary saved each year. 

I closed my TFSA with my previous employer because I couldn't purchase anything other than mutual funds. I have since opened a TFSA at TD with direct investing options. I will put $800-1,200 a month into in each month once I have topped up my emergency fund. I should start investing into it around July-August. I'm doing my research now as to what to go with.. low cost ETFs, low MER mutual funds, blue chip stocks etc. 

Any advice of funds to purchase would be appreciated. 

Thank you all.


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## Money172375 (Jun 29, 2018)

MK7GTI said:


> Update:
> 
> Chequing:$5,000
> Emergency fund(growing to the goal of $15,000):$5,200
> ...


Not sure if you’re doing it all ready, but AUTOMATE your savings, if you haven’t already done so. When people ask my for advice, that’s my number one tip. People who “plan” to save and invest with annual deposits usually don’t do it. 

When I was your age.....I had multiple investment savings plans....one for a car purchase in 5 years, one for an annual vacation, one for my retirement, one for resp. I literally started with $25 biweekly. Every year I got a raise, I increased these amounts incrementally.


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## MK7GTI (Mar 4, 2019)

Update 

Chequing: $4,967
Emergency Fund: $11,458
Slush Fund: $250
TFSA: $1,861
RRSP: $57,400
DCPP: $6,652

Total net worth: $82,588

I have no debt what so ever. Currently my savings rate is 46-48% of my gross income. I go by gross income since 26% of that savings rate is pre tax. I've put $500 a month into the TFSA for the past 3 months and will continue to do so. At this point my only goal is to save $30,000 in my emergency fund.


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## MK7GTI (Mar 4, 2019)

UPDATE

Chequing: $3,100
Emergency Fund: $14,200
Slush Fund: $1,300
TFSA: $4,855
RRSP: $66,825
DCPP: $10,752

Debts: $0

Net worth: $101,032

It's been a tough year for many people. For me, it's been a very good year. I moved back to a city I previously lived in. Rekindled some old friends. Got married to my girlfriend on our 6 year anniversary. I doubled my net worth. Sold my car which is a big deal as a car enthusiast.
For 2021 I plan to focus on contributing more to my emergency fund and TFSA. My RRSP/DCPP are automated and total 32% of my salary.


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