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Old 05-02-2016, 11:56 AM   #5951
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most people want the new car every 3 years to keep up with the Joneses, this is why most ppl struggle. that and poor financial literacy.

live within your means, retire at 50 is totally doable for many.

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Yep, totally agree with this. But most people rather have that 6gb data plan, or that annual vacation, or spending half their paycheque on car payments, or eating out all the time. Being well on your way to financial freedom is more within how much you spend, not how much you make.
It's also perspective though. Sure, I can retire at 50 but the experiences I'm going to have at 50 traveling throughout Europe are sure going to be different than when I'm 25, 30, 35, 40, etc.

If you have a family, are you going to make your kids play with free cardboard boxes and not put them in swimming, skating, etc just so you can retire at 50?

A life during your prime years without entertainment, travel, some fun tech, seems like not much of a life at all to be honest.

Personally, I would rather have experiences spread throughout my life that I can look fondly back on, which help me grow as a personal spiritually, emotionally, intellectually, than hoard all my cash, live with a super restrictive budget and retire early. Without trying to sound too cliche, you never know what will happen in your life. Nobody is guaranteed tomorrow.

Again it's perspective and what is important to you.
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Old 05-02-2016, 11:57 AM   #5952
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the hard part is not spending all your money.

it's the whole real estate / forced savings argument all over again.

step one to financial freedom is budgeting based on %, not actual dollars.

retirement after 17 years of working is easily attained if you can invest 50% of your take home pay. most people want the new car every 3 years to keep up with the Joneses, this is why most ppl struggle. that and poor financial literacy.

live within your means, retire at 50 is totally doable for many.
I'm 34 years old with no savings and investments whatsoever. You're saying If I dump all my money into s&p, I'll be good to go by 51?

Also, who wants to retire at 50? Every person that I've seen retire at 65 has either become a useless lemon or has developed some sort of illness from sitting on the couch doing nothing
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Old 05-02-2016, 12:22 PM   #5953
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I sure in hell don't want to retire at 50 even if I have the money to do so.
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Old 05-02-2016, 12:44 PM   #5954
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Financial freedom is often construed as retirement when the two concepts are quite different. Retiring at 50 is silly because unless you're making significant income during your working years and are able to dial back your lifestyle when you stop working, there's a serious risk that you could run out of money before you die (if cancer, heart disease, etc. doesn't get you first).

Financial freedom at 50, on the other hand, is a worthwhile goal if you want to do something meaningful during your remaining time and not have to rely on doing that thing in order to make ends meet.

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I'm 34 years old with no savings and investments whatsoever. You're saying If I dump all my money into s&p, I'll be good to go by 51?

Also, who wants to retire at 50? Every person that I've seen retire at 65 has either become a useless lemon or has developed some sort of illness from sitting on the couch doing nothing
Playing around with the future value calculation in Excel can be interesting. If you maximize your TFSA amount each year (based on $450/month), you can accumulate about $364K over 25 years if you assume a return of 7%. I think any future government would be hard-pressed politically to remove the TFSA altogether, so if you can keep your fees low (Questrade, TD e-series, etc.), you can achieve this type of return with index investing. However, this also assumes that nothing changes in your life - it's easy to save $450/month when you're single, mobile, and have no debt.

Is $364K enough to retire on? Maybe if you stay in Canada and combine that with CPP/OAS.

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Old 05-02-2016, 01:00 PM   #5955
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Is $364K enough to retire on? Maybe if you stay in Canada and combine that with CPP/OAS.
IF you had that much in TSFA, would you still qualify for CPP/OAS?
I know with RRSP's, the more you have, the less CPP/OAS you are entitled to.
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Old 05-02-2016, 01:05 PM   #5956
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IF you had that much in TSFA, would you still qualify for CPP/OAS?
I know with RRSP's, the more you have, the less CPP/OAS you are entitled to.
Absolutely. That income is taxed once (before you put it into a TFSA) and your CPP/OAS/GIS are not clawed back when you decide to make withdrawals. The TSFA is a game-changer when it comes to retirement planning. It makes no sense for young people to contribute to RRSPs unless they are consistently maxing out their TFSAs.

http://www.cra-arc.gc.ca/tx/ndvdls/t.../mpct-eng.html

It's such a crazy instrument that the Liberal government had to reduce the limit because it would mean billions of lost tax revenue over a generation.
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Old 05-02-2016, 01:50 PM   #5957
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It makes no sense for young people to contribute to RRSPs unless they are consistently maxing out their TFSAs.
Put any US stocks that pay dividends into RRSP. You don't get charged withholding tax on these dividends. This does not apply to TFSA.

IE - if you own the same stock in an RRSP and a TFSA, and you get paid $100 in dividends, in the RRSP, you keep the full $100, but in the TFSA you only keep about 70-85% of that.
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Old 05-02-2016, 02:10 PM   #5958
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I sure in hell don't want to retire at 50 even if I have the money to do so.
that's exactly the point, it's the "F-you" money.

i think people here see only in binary, being 'retired at 50' doesn't mean you become a vegetable and do nothing, or that you have to sacrifice everything.
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Old 05-02-2016, 02:10 PM   #5959
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Put any US stocks that pay dividends into RRSP. You don't get charged withholding tax on these dividends. This does not apply to TFSA.

IE - if you own the same stock in an RRSP and a TFSA, and you get paid $100 in dividends, in the RRSP, you keep the full $100, but in the TFSA you only keep about 70-85% of that.
I must admit I'm not familiar with DRIP investing, but would the benefits of withholding tax on those dividends in an RRSP outweigh the taxes you would have to pay at retirement, even if you stage the withdrawals over 20 years at age 71?

As a layperson, it seems to me that the flexibility of the TFSA outweighs the RRSP as a long-term savings vehicle for average to above-average income earners.
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Old 05-02-2016, 02:12 PM   #5960
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I'm 34 years old with no savings and investments whatsoever. You're saying If I dump all my money into s&p, I'll be good to go by 51?

Also, who wants to retire at 50? Every person that I've seen retire at 65 has either become a useless lemon or has developed some sort of illness from sitting on the couch doing nothing
what i'm saying is that if you invest 50% of your take home pay, you can retire in 17 years, that is a statistical fact. you would get to keep on spending the same amount of money for the rest of your life (50% of today's earnings, in reality, it will be about the average over that 17 years)

there are two variables here - your take home pay and spending.
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Old 05-02-2016, 03:07 PM   #5961
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I must admit I'm not familiar with DRIP investing, but would the benefits of withholding tax on those dividends in an RRSP outweigh the taxes you would have to pay at retirement, even if you stage the withdrawals over 20 years at age 71?

As a layperson, it seems to me that the flexibility of the TFSA outweighs the RRSP as a long-term savings vehicle for average to above-average income earners.
I'm not an expert by any means and do not work in the finance industry, so take everything I'm saying with a grain of salt. I'm just a bit of a personal finance geek who reads a lot of finance blogs.

Firstly, if you are investing in US dollar equities in an RRSP that pays a dividend, don't use a DRiP. You'll be paying twice for the currency conversion.
  • Once when your USD dividend payment is converted to CAD
  • Again when your CAD is converted back to USD to purchase more shares.
Instead, open a USD RRSP account.

To answer your initial question, I guess it really depends on what kind of stocks you are investing in and the $$ of dividends being paid out. I only keep high dividend USD paying stocks in my RRSP like Coke, Costco, Walmart, IBM, GM, US Bank.

All of these stocks pay decent dividends. I don't know about you but I'd rather have 100% of the dividends than 70% of it, especially compounded over time as the stock goes up and the amount of shares you own increase.

Second, if you own any Canadian dividend paying stocks, it's best to own them in a non-registered, cash account (so not TFSA or RRSP) because you can take advantage of the dividend tax credit and recover at least part of the taxes withheld. You cannot do this in a TFSA.

This is my current mix:

TFSA: bonds, term deposits, GIC, TD eSeries
RRSP: US Stocks mainly, Some international stocks
Cash account: Canadian stocks, Some international stocks

Between the 3, I stick to the following asset allocation:

25% Canadian equities
25% US equities
25% International equities
25% Cash
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Old 05-02-2016, 07:42 PM   #5962
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People who become lemons at the age of 65 were probably lazy in the first place, B) were injured in their younger years, or C) literally have no hobbies.

If I could, i'd retire at 35 without any problems. I couldn't imagine how busy it will get when kids enter the picture. My current job gives me an abundance of time off at a time and i'm so bloody busy I have to tone down my hobbies often.

If you have interests, funds to feed those interests as well as take care of your body. Retiring early would be a blessing for many. You become a lemon when you stay on your couch due to social inability, injuries causing disability or mental illness such as depression.

I know a lot of retired folk who are "comfortable" income wise. Some have a small business on the side which they work at to fill time. But most just enjoy the fruits of their labour. I can't bloody wait to retire. The only miserable elderly people I know are the ones, depressed, strapped for cash or disabled.

Save your money, take care of your body/mind you'll enjoy life till you die.
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Old 05-02-2016, 08:02 PM   #5963
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You know the saying
"Search for a job you truly love and you will never work a day in your life..........Because the job doesn't exist."
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Old 05-02-2016, 08:12 PM   #5964
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I love my job, couldn't imagine doing anything else. But I'd much rather not "have" to work, or spend my life doing my latest hobby, or spend time with my family.

I think that's the point. Retirement doesn't mean becoming a potato. It's having the financial freedom to do what you want. If your job is that... Do it.
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Old 05-02-2016, 08:15 PM   #5965
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I'm 34 years old with no savings and investments whatsoever.
What....
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Old 05-02-2016, 08:40 PM   #5966
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What....
Thats really not that uncommon, or unreasonable in this city. Try and get ahead without some help from your parents. Its not easy. Some people I know work 2 jobs so they can take care of their parents. Some people have kids young. Some people couldn't afford higher education. Some people didn't get lucky, or get any favours.
I've had a pretty good hand dealt in my life all things considered. I also understand not everyone has.
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Old 05-02-2016, 08:42 PM   #5967
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Considering a majority of people hit thirty, just after they've settled in their career i'd say thats not uncommon at all. Honestly, i'd say if you have some good savings at 30, your probably a minority unfortunetely. 34 isn't far behind.
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Old 05-02-2016, 10:02 PM   #5968
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what i'm saying is that if you invest 50% of your take home pay, you can retire in 17 years, that is a statistical fact. you would get to keep on spending the same amount of money for the rest of your life (50% of today's earnings, in reality, it will be about the average over that 17 years)

there are two variables here - your take home pay and spending.
I see what you're saying but doesn't that defeat the purpose of what we call "investing". Isn't the point of investing your hard earned money a gamble to actually try to MAKE money. If I invest 50% of my take home for 17 years and am able to retire as long as my spending is pretty much exactly the same as it was for those 17 years a terrible way to live life? you're basically just putting the 50% away to use after 17 years. I guess I always thought investing was to put it into something to hopefully come out on top and make a good chunk of change with the possibility of losing it as well.
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Old 05-02-2016, 10:03 PM   #5969
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What....
Well, there's actually more to it but I'd rather not go into details. I do plan to "retire" by 40. And by retire, I mean work when I feel like it.
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Old 05-03-2016, 12:38 AM   #5970
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I see what you're saying but doesn't that defeat the purpose of what we call "investing". Isn't the point of investing your hard earned money a gamble to actually try to MAKE money. If I invest 50% of my take home for 17 years and am able to retire as long as my spending is pretty much exactly the same as it was for those 17 years a terrible way to live life? you're basically just putting the 50% away to use after 17 years. I guess I always thought investing was to put it into something to hopefully come out on top and make a good chunk of change with the possibility of losing it as well.
you have totally lost me on this one.

you take home 100 a year, let's say.

you spend 50 a year on living, invest 50.

in 17 years, you can spend 50 per year forever (forever is a stretch, but its not too far away from the truth).

not sure how that's not coming out ahead. it's not like you're just putting away 50 today to spend 50 tomorrow, you're investing today and compounding growth to have enough to live your same life today forever without working.

and as others have said, retirement doesn't mean doing nothing, it means not having to work, travelling, starting your own business as you now don't need to work 9-5, consulting on the side, whatever the fuck you want - this is called freedom.
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Old 05-03-2016, 04:29 AM   #5971
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you guys are crazy, i would retire right now if i could.

work is for chumps.
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Old 05-03-2016, 07:43 AM   #5972
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Can we turn this back into a real estate thread?

Is the market shifting? Some places I've seen in the past week or two have been sold in coquitlam and new west lately for either list price or 10-15k below ask with subjects. A month ago, these places would have sold with no subjects, cash offers and over ask.

Is everyone else seeing the same thing?
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Old 05-03-2016, 08:30 AM   #5973
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I genuinely hope it turns. Now, even as socialist as I am, I don't want my condo to tank, but it's gotta calm the fuck down here, or lots of people are going to suffer life destroying consequences with the financial decisions they are making to get in to the market.
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Old 05-03-2016, 08:34 AM   #5974
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i'd definitely retire if i could. it's not that i want to sit around doing nothing, it's that i want to do just the things i actually enjoy.

work is ok sometimes, but i don't have the option of just not going on days where i'm not in the mood. theres no freedom there even if it's not hell on earth.
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Old 05-03-2016, 09:03 AM   #5975
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I'm looking at comparable properties for sale in my area and there are more listings that seem to have been on the market longer. However, the benchmark prices have gone up by 7-10% since the beginning of the year.
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