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05-19-2010, 12:35 AM
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#1 | | HELP ME PLS!!!
Join Date: Apr 2002 Location: B.C.
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| How do you divide your income?
Greetings:
Being in my mid 20's, I am starting to seriously think about my financial future. Right now I have a stable job and no debt. I am planning to divide my income ( or what's left of my income after rent, food, insurance, electric and gas bill etc...) into the following:
10% Entertainment
20% Emergency fund (bank savings account)
30% High risk/yield investment
40% Low risk/yield investment
What do RS members feel about this? All feedback/advice/question are welcome
__________________ Quote: Originally posted by Ulic Qel-Droma
ill have to agree. .. kinda. sometimes i get a hardon over her, but then i'm like *no i shouldnt.. this is wrong, she's not up to my standards*. but i guess my dick has it's own set of rules. | | 
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05-19-2010, 12:40 AM
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#2 | | Rs has made me the woman i am today!
Join Date: Jan 2002 Location: ?
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50% - entertainment
50% - investment
Save more when you are married. Enjoy for now.
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05-19-2010, 01:49 AM
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#3 | | 14 dolla balla aint got nothing on me!
Join Date: Mar 2009 Location: Richmond
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if u want long term growth, then i would put more into high risk high returns funds. since you are in your mid 20's, you can accept loss for increased growth. as long as you do not withdraw the money you invest and you let it ride for at least 5 years, i cant see why you would not make a decent return.
its all about dollar cost averaging. its good that you are so concerned with your financial future. I have already started putting in a large portion of my income into high risk funds. that ferrari wont make itself!
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05-19-2010, 06:57 AM
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#4 | | Rs has made me the man i am today!
Join Date: Apr 2004 Location: Vancouver
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Can't really give you feedback based on percentages without an amount
However, it's good you're saving 90% of your left over money..
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05-19-2010, 07:38 AM
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#5 | | My homepage has been set to RS
Join Date: May 2002 Location: Vancouver
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hey man, if you are in your 20s....spend your money on entertainment and stuff you want (car, vacations) because it ain't the same when you are older...trust me on this one....however, I would put money aside every month to eventually buy your own pad....good for your lifestyle.......
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05-19-2010, 09:09 AM
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#6 | | Everyone wants a piece of R S...
Join Date: Oct 2006 Location: 403-604
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Save as much as you can in your 20s, period.
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05-19-2010, 09:41 AM
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#7 | | Rider
Join Date: Apr 2010 Location: Surrey
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50%bills
20%save
20%invest
10%food
really depends on how much you get paid
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05-19-2010, 09:41 AM
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#8 | | RS.net, where our google ads make absolutely no sense!
Join Date: Apr 2002 Location: vancouver
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25% savings
50% housing/bills/etc
25% fun
Have fun while you're still in your 20s, but still have a fixed amount going to savings/investments (RRSP, etc). automatic withdrawl to an investment/savings account is best, that way it forces you to save.
I know some people who worry too much about saving, and theyre miserable
Last edited by Marioo1991; 05-19-2010 at 09:57 AM.
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05-19-2010, 09:49 AM
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#9 | | I Will not Admit my Addiction to RS
Join Date: Jun 2008 Location: vancouver
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30% housing
25% Living Expenses
20% Transportation
15% Savings/Investment
10% Entertainment
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05-19-2010, 09:55 AM
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#10 | | Banned (ABWS)
Join Date: Feb 2009 Location: Kits/Richmond
Posts: 4,409
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| Quote:
Originally Posted by Z3guy  hey man, if you are in your 20s....spend your money on entertainment and stuff you want (car, vacations) because it ain't the same when you are older...trust me on this one....however, I would put money aside every month to eventually buy your own pad....good for your lifestyle....... | Quote:
Originally Posted by mo_bettah Save as much as you can in your 20s, period. | There is a balance somewhere between these that works very well. What I decided in my 20s is that:
- I had lots of unused RRSP room from high school/summer/co-op jobs
- I had lots of unused school tax credits/deductions
- I could put 18% of my income into my RRSP
- 18% RRSP contribution would return about 35% of that, or ~7% of my income. This would be my investment account.
- 18% of my income is about 25% of my after-tax income, or about 50% of my discretionary spending after living costs.
- I didn't need a rainy day account since I didn't have an dependents, my car/house were under warranty and my cost of living way low enough to get by on EI if I lost my job.
- Once I had significant RRSP savings I could leverage that with a LOC at prime secured against the RRSPs to borrow and invest.
So for 6 years I maxed out my RRSP till I hit the magical $100K limit at 30yo I was aiming for. This also included withdrawing $20K for the HBP for my house. Why 100K? At 7%/yr for 35 years, then 4%/yr for 20 years assuming I retire at 65 and live till 85, it will pay me $32K/yr + $12K/yr CPP == $44K, which is more than my retired parents live off of.
I'm 30yo, and now have freed up 18% of my income to have fun with for the rest of my life.
Do I wish I had more discretionary money sooner? Sure, it would've been nicer to have a motorcycle a few years ago, my old laptop had been on its last legs for years before buying a new one recently, and I love my new TV/PS3.
Can I still enjoy it now? Definitely, I'm only 31yo and have the financial freedom to do virtually anything I want (within reason). Being able to take $2K out of my savings account to buy 2 gold medal tickets hours before the game was great, it was a once-in-a-lifetime experience I could take advantage of cause of my ability to save.
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05-19-2010, 10:06 AM
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#11 | | Rider
Join Date: Apr 2010 Location: Surrey
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what happens when you take it out dont you get taxed on the rrsp when you tak it out???what about using a TFSA??
i use TFSA for my stocks
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05-19-2010, 10:08 AM
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#12 | | RS.net, where our google ads make absolutely no sense!
Join Date: Apr 2002 Location: vancouver
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| Quote:
Originally Posted by gdoh what happens when you take it out dont you get taxed on the rrsp when you tak it out???what about using a TFSA??
i use TFSA for my stocks | yes you do get taxed on it when you take it out, but the main idea of an RRSP is that its meant for retirement, that you dont take it out till then. At that point it will probably be your main source of income. The two exceptions that I know of are HBP and LLP
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05-19-2010, 10:16 AM
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#13 | | Rider
Join Date: Apr 2010 Location: Surrey
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and what about tfsa?
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05-19-2010, 10:57 AM
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#14 | | Banned (ABWS)
Join Date: Feb 2009 Location: Kits/Richmond
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| Quote:
Originally Posted by gdoh what happens when you take it out dont you get taxed on the rrsp when you tak it out???what about using a TFSA??
i use TFSA for my stocks | TFSA didn't exist when I was in my 20s. If the TFSA did exist I would have put my tax return into it.
In my case my average tax rate will be 7% lower in retirement than now. Thus RRSPs make more sense than TFSAs cause I don't plan to withdraw a lot from my RRSP.
Also my tax return percentage is high (~35%) from RRSP contributions so it makes sense to take the return and reinvest for even more gains. What other investment can you make that pays you 35% return on Day 1?
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05-19-2010, 11:01 AM
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#15 | | I want to be a person and not an icon.
Join Date: Jan 2010 Location: Mugello
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30% blackjack
25% Baccarat
15% poker
15% roulette
5% slots
10% food
the rest really depends how the first 90% go Posted via RS Mobile | |
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05-19-2010, 11:55 AM
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#16 | | Media Officer / MOD
Join Date: Apr 2001 Location: vancouver
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20% rrsp
40% tfsa
35% housing/food
5% car
Generally I don't spend a dime.... No movies, no coffee nothing, my goal is by 28 married and my own house. Posted via RS Mobile | |
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05-19-2010, 02:25 PM
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#17 | | resident Oil Guru
Join Date: Mar 2005 Location: Vancouver
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| Quote:
Originally Posted by ws6ta 50% - entertainment
50% - investment
Save more when you are married. Enjoy for now. | There's lots of ways to have fun that don't necessarily cost money.
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05-19-2010, 05:15 PM
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#18 | | Ubereem Mod
Join Date: Mar 2002 Location: Richmond
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LoL when i came into this thread,
I was thinking, on paper to CRA how i divide and that would be Employment income and Professional -Self employed business activities hahahahah
__________________ Quote:
Originally Posted by Culture_Vulture sometimes I like to use kindergarten art class scissors to cut my pubes | | |
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05-19-2010, 06:03 PM
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#19 | | HELP ME PLS!!!
Join Date: Apr 2002 Location: B.C.
Posts: 5,855
Thanked 456 Times in 173 Posts
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| Quote:
Originally Posted by waddy41 Can't really give you feedback based on percentages without an amount
However, it's good you're saving 90% of your left over money.. | After rent, gas, electric, food, insurance etc... I put about $2200 into the bank per month.
__________________ Quote: Originally posted by Ulic Qel-Droma
ill have to agree. .. kinda. sometimes i get a hardon over her, but then i'm like *no i shouldnt.. this is wrong, she's not up to my standards*. but i guess my dick has it's own set of rules. | | |
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05-19-2010, 09:55 PM
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#20 | | Rs has made me the man i am today!
Join Date: Apr 2004 Location: Vancouver
Posts: 3,073
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| Quote:
Originally Posted by BeefCake4000 After rent, gas, electric, food, insurance etc... I put about $2200 into the bank per month. | That's awesome...
I'm very similar to you....I save the majority of my income...
For 2009 I only spent 20% of my after tax earnings...and that includes paying bills...
but occasionally I splurge on something I will enjoy or something I will really appreciate having...
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05-20-2010, 12:50 AM
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#21 | | My homepage has been set to RS
Join Date: Jan 2004 Location: Van
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| Quote:
Originally Posted by taylor192 Being able to take $2K out of my savings account to buy 2 gold medal tickets hours before the game was great. | So scalpers were selling for 1K each before the game? That's pretty good - cheaper than Fan2Fan.
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05-20-2010, 12:52 AM
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#22 | | Media Officer / MOD
Join Date: Apr 2001 Location: vancouver
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honestly it took me 1 year to see how $ should be saved, a lot of you that say spend what you can now. Why not work hard now, and live a better life later. I've always been told that the harder you work when your young the easier your life will be when your older. So far it's working
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05-20-2010, 07:51 AM
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#23 | | Banned (ABWS)
Join Date: Feb 2009 Location: Kits/Richmond
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| Quote:
Originally Posted by goo3 So scalpers were selling for 1K each before the game? That's pretty good - cheaper than Fan2Fan. | I got home Sat night and checked CL for the hell of it, and noticed > 1000 listings for Gold Medal tickets. Sellers were getting desperate to unload them. Many of the posts said "contact anytime all night, will meet early AM" which meant "I need to sell so I can make it to a pub rather than stand infront of the stadium". So I kept posting WTB ads every hour all night saying I'd pay $200 over face value (FV was $800). I watched prices slowly fall all night, and at 8am someone called and offered $2K for 2 tickets. I've never driven so fast to get them.
What's funny is that while inside the stadium I had 2 more scalpers call and offer tickets for $1200+/each. I laughed and said I was sitting in my lower bowl seat already for $1000. Their reaction was priceless, so dejected. 
I sat lower bowl in the corner that Crosby celebrated in aftering scoring in OT/ We were also first on TV after the goal (we had been on TV and in newspapers several times cause of the various signs we brought to games). I'm holding the sign.  | |
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05-20-2010, 08:05 AM
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#24 | | RS.net, where our google ads make absolutely no sense!
Join Date: Apr 2002 Location: vancouver
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If you have 100k in your RRSP when you're 30, earning 7% it will total over $1,000,000 by the time your'e 65 without putting anything more in it.
If you buy a a house for $400,000 and it gains 5% per year, by 65 it will be worth $2,000,000
Even factoring inflation, the house will be worth approximately 3 times what you paid, and the RRSP will be worth over $500,000
One of my old neighbours bought her house over 50 years ago for around $5,000. Sold it a few years ago for just shy of a million dollars.
Start being smart with your money young, the time value of money is a lot more valuable than people realize.
Last edited by Marioo1991; 05-20-2010 at 09:09 AM.
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05-20-2010, 08:57 AM
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#25 | | Everyone wants a piece of R S...
Join Date: Oct 2006 Location: 403-604
Posts: 356
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| Quote:
Originally Posted by mikeivb If you have 100k in your RRSP when you're 30, earning 7% it will total over $1,000,000 by the time your'e 65 without putting anything more in it.
If you buy a a house for $400,000k and it gains 5% per year, by 65 it will be worth $2,000,000
Even factoring inflation, the house will be worth approximately 3 times what you paid, and the RRSP will be worth over $500,000
One of my old neighbours bought her house over 50 years ago for around $5,000. Sold it a few years ago for just shy of a million dollars.
Start being smart with your money young, the time value of money is a lot more valuable than people realize. | Did you flunk out of grade 5 math?
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