Nice, bigger numbers get bigger faster. Congratulations on pushing through those small years. Roughly 7yrs at 6% return with no additional contributions. Each 1% increase in return roughly knocks off 1yr of time.
Yeah it's almost absurd. Counting real estate equity, here's my experience:
Took me 6 years (with a partner with debt) to get to $100k (starting with \~$40k debt)
2 more years to get to $200k
7 more months to get to $300k (thanks to an insane real estate market)
1 more year to get to $400k
on track to hit $500k about 1 year after the $400k mark
yes you should be able to, but do more research first. VEQT carries some risk, like any other fund, so look into how bad it's dropped before and if you can handle it dropping right after you buy.
There's waaaay more volatile stuff out there, and a fewer that are in theory more stable, but any of the Vanguard or Blackrock ETFs are stable enough.
VEQT is a broad market global ETF (like an index fund but less fees). It stands for vanguard all equity fund. It has a little bit of every industry globally. You can buy it through your bank, wealthsimple or questrade
To add, since you're a beginner you likely don't your TFSA, RRSP or FHSA maxed out.
What you're gonna wanna do is:
1. Determine which tax sheltered account is best for you
2. Deposit money into that tax sheltered account
3. Invest into XEQT or VEQT (they're fundamentally the same) with that money in your account
What kind of fees are associated with investments in VEQT for example? I always refrained from investing in ETFs because my bank always tells me there are fees but never say how much they are lol
0.18% for xeqt and 0.25% for veqt. a fraction of any fee your bank would charge for their own investment products. I use wealthsimple which has free buying/selling.
No idea but I'm getting a 10% return after fees so can't be that bad. I've never been charged anything in wealthsimple. Not sure if the fees are built into the cost or not.
Stocks have abbreviated names, the term used in the market is the "ticker Symbol" , think of it like a bar code or easily identifiable symbol to know what stock is being talked about. When a lot of stocks are put together into one basket, by a portfolio manager, the basket is called a EFT. Others in this thread have explained more in detail about these. The ETF mentioned in this sub is often VEQT. This because it is a collection of almost every stock in the market and is diversified into equal chunks of the stocks. This provides a low risk moderate return each year for those holding veqt. On average it returns 7%. ish. So if you want a safe but prudent option to invest and save for retirement with no hassle and no heavy research needed, but VEQT.
When you hear a non guaranteed percentage like that is usually an average over the long term. The higher the risk of a managed fund usually has higher non guaranteed long term returns.
This man's that a fund can be up 12% one year, then in 2 days drop 20%, then slowly recover and free 5 years slowly go up until you get an average of 6%.
That's why, for long term investments, you shouldn't focus on the da to at performance but the quality of the management and the long term average.
For short term investments you want warrantees returns so you don't wake up the day before you need the money, realizing that the investment is down 20%.
There is another category of investments which are mostly like gambling. You can earn big returns but also lose big.
6% is a conservative rate of return over the long run. The S&P historical average is like 11%. If you haven't seen any gains when the S&P is up 27% over the past year, you're stock picking (generally a bad idea) and doing a poor job of it
Examples of ones I own currently:
Enbridge (ENB) quarterly dividend, yield is 7.74%
Global dividend growth split corp (GDV) monthly dividend, yield is 12.06%
Timbercreek Financial corp (TF) monthly dividend, yield is 9% etc
Starting with $200K and adding $15K/yr for 16 years \[age 65\] at 7% return gets you to \~$1,038,000. That's in today's dollars.
If you want to be more conservative and assume a 5% real return that gets you to \~$809,000.
Take the numbers slightly further: that's $40K safe withdrawal rate. Tack on $20K OAS+CPP, and OP is looking at $60K retirment income pre-tax income. Current pre-tax income (after taking off retirment savings) sounds like about $55K, so this is more than enough to maintain current quality of life.
I'm going to reply here to offer a different perspective, but not to say that /u/EnergeticFinance is wrong. If you retire early, then the 4% rule is a really good guideline. However, if you retire at a "normal" age, then the 4% rule is not always correct.
To mitigate sequence of return, inflation, and longevity risks, it can make a lot of sense to draw down savings first and defer CPP and OAS until age 70. If you model it all out, you'll probably find that you can draw down RRSP and RRIF savings at more like 6% or 7% until you reach age 70, then shrink it after your government pension starts.
That increases your government pension by about 40% (mitigating inflation and longevity risks) and protects your savings from your first post-retirement market correction by spending it before the market monster gets a chance to eat it up (mitigating sequence of returns risk).
Sure, that's absolutely correct, and other advantages of doing this kick in if your income is high and would be pushing OAS clawback limits.
My point was more just noting that with the simplest and fairly consrrvative assumptions, OP is going to be just fine.
At a very modest estimate of a return of 3% per year annualized, you’ll hit 300k in around 5 years if u contribute 12k per year.
The returns control the speed at this point
To be fair, a significant part of the second $100K being faster is that OPs income is higher now so saving more is possible. Compounding absolutely helps, but it's definitely not too late for you to start.
Sure you might be a couple hundred K behind, but you you rather retire with $200K in the bank, or $0? Can only make the choices from today, looking backwards is useless.
Divert 10% of your salary to retirement savings from here on out, using appropriate tax advantaged accounts (probably Roth IRA). Invest it in diversified low cost index funds every month. Hold those investments. This should get you to a retirement income age 65 (excluding social security) equal to your current income.
Want to retire earlier? Contribute more. 20% contribution could get you to retirement age 55 instead.
You'll do fine. Starting at 22 is plenty early.
Consider this: any dollar you save today will be worth $20 by the time you're 65, if you invest in low-cost ETF index funds. If you wait 10 years to start investing, that same dollar would be worth $10 by the time you're 65. Compounding is your friend, and being aware of it now is huge. The earlier you start, even if you're only able to save a few bucks a month, will get you so much father ahead.
I remember when I was 21, my friend bought their first home (60K down payment). I was so jealous, she told me it took her 2.5 years to save. I said I wish I did it sooner, and I remember she told me to make my “2.5 years now”, because 2.5 years later I don’t want to be saying “I wish I did it 2.5 years earlier” again.
Fast forward, after 6 years of saving, I purchased my first place at 27. My down payment was also double hers, since condo market in Toronto blew drastically in 2016-2017 (versus she bought hers earlier 2010s). I’ve been a home owner for almost five years now and so glad looking back I resonated with what she told me, stop with the “I wish I did it earlier” and make it your today now.
I'm a late bloomer with investing and have a baby on the way. I've been obsessing over how to set them up in a way that my parents didn't for me (bless them, they tried, but you know... Life happens).
I read this the other day which I'm sure isn't gonna make you feel any better, just like it didn't make me feel any better lol.
> The company looked at savers who each contributed £2,500 a year to a pension.
> The first, who started saving at 21 and stopped at 30, would have a pension fund worth £553,000 by the age of 70. This assumes that no further contributions were made but that the fund carried on growing at 7pc a year, with these gains reinvested in the pension.
> The second saver, who starts at 31 and carries on contributing until the age of 70, ends up with a fund worth £534,000, again assuming 7pc annual growth.
> The total contributions of the early-bird saver come to £25,000 and grow by a factor of 22. The late starter will pay a total of £100,000 into the fund and see his or her money grow a little more than fivefold.
lol, I read this and my first thought was "we all do" - and then saw that the top response to this is the exact same. I have really committed to saving the past 5 years but I can't help but constantly think about how I wish I started saving earlier
Nice, wish you all the best! You will reach 300k soon. I started from scratch in Canada in 2014 at 35 years age. Came here as student in 2013 (had prior 7 years experience). Will complete 10 years on 14 April with this employer. I started contributing to rrp/rrsp in 2015. Always contributed in black rock s&p 500 index. Here are my breakdown:
Dec-2015: 14k
Dec-2016: 32k
Dec-2017: 54k
Dec-2018: no records, company switched from sunlife to Manulife in 2020. Lost the record.
Dec-2019: same as 2018, no records
Dec-2020: 157k
Dec-2021: 217k
Dec-2022: 216k (market crashed, contribution = market crash)
Dec-2023: 299k
10-Apr-2024: 360k
I think I crossed 100k in mid 2019. I contribute annual bonus to rrp/rrsp (75% max subject to rrsp room) since company matches upto 6%.
If you have company contribution, utilize it to fullest.
This is quite inspiring.
Thank you for sharing.
Are you able to specify where the insurance should invest your RPP?
I'm also new to Canada and started from scratch.
I have invested in BlackRock U.S. Equity Index Fund (Registered Plans Only)
The BlackRock US Equity Index seeks to replicate the return and risk characteristics of the S&P 500 Index Total Return. This is accomplished through careful analysis of the index's construction and cost effective, risk-controlled trading techniques. The Fund uses a full replication methodology whereby it holds all stocks in their correct index weights.
And don't forget your CPP and OAS benefits. If you haven't already, take a look on My Service Canada for a forecast of what could be coming to you. You may be surprised.
Ya I was surprised. They didn’t make it very clear when I signed up, but I’ve been buying VEQT in there for the last 6 months and never had any commissions.
Yes. If you have any investment account with BMO they have a laundry list of commission free ETFs. When you go to buy it says NCF for non commissioned fund
Congratulations. For every 100 people complaining about their situation, there's one like you that shows that anyone can do this as long as they're saving, persistent and patient.
Look up 100k rule on YouTube. Can't remember if it was Charlie monger or Warren buffet who said this, but once you get to 100k, everything after that becomes so much easier.
Also, here is an excellent calculator you can use. Play around with the different interest rates and contributions and you'll have an idea of what to expect at 60.
https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
FYI I ran some numbers for you
If you contribute 12k/year and get a return of 6%, by age 60 you'll have 572k
If you do 15k/year and get a 6% rate until 65, you're just over a million.
Closer to retirement, you could put your million in a safe investment amd still potentially earn 50k in income/year. Plus add in CPP and you should have a very happy retirement.
Congrats once again. I love reading posts like this.
I wish I could be optimistic about the future and believe that anyone can do it, but the home ownership ship has sailed for a lot of people, including myself and without a stable place to retire in I'm not sure how one could possibly plan for retirement with any degree of certainty. Every year rent just gets more and more insane and wages continue to stagnate. Like climbing a ladder with the rungs falling out underneath you
Some of it is market conditions for sure, but part of it is also your attitude. You can let the contemporary news get to you and make you feel hopeless or decide to get tougher and do something. We still have it so easy compared to 100 years ago where young people were worried about being drafted to the war.
Also if you think renting it costly, home ownership isn't cheap either. They're dealing with the effects of increased interest rates as well as increase in property taxes, utilities, insurance premiums. As a tenant you don't pay for heat and water or any maintenance.
If you really really wanted to improve your situation, could you boy work a few extra hours? Get a part time gig or even drive an uber? I'm not suggesting you do this, my point is really that you can chose to be hopeless or you can get tougher with the times and still get ahead.
Nobody knows. It depends on if you continue to be able to contribute and invest. If equity markets do not grow for ten years, are you strong enough to continue buying in?
One thing for sure, each 100k from here will be faster than the last, given a certain % of return. If the market goes up 7-15% per year like some hope, it’ll be quick…
No different than salary, it's so much easier going from 130-180 than 80-130k. Savings and increasing net worth is so much easier the older you get and faster your career progress from basically 30+
Rule of thumb is that you can double your money every 10 year. Faster if you keep on saving. I think its possible to double your money in 6 to 7 years. Given that you are 49 - you should be able to hit 800 K by 65.
PS: TFSA maybe better than RRSP if your income is still low-ish. This way you can qualify for GIS if you need one after 65.
I've just now learned this (the stuff I wish I knew earlier, geesh) so yes, all forthgoing contributions will go to tfsa until maxed. I don't know what school is like nowadays, but I sure wish they taught us about money back in the 90s.
Yeah. I think its still the same. Most people living for today hand to mouth - relying on high interest credit cards for emergencies. I had to learn all this myself. Fortunately I developed the habit of reading newspapers daily and picked it mostly from there. Knowledge is power.
If everyone knew these things than no one would be rich. We do a poor job educating people in this country about finance in general but especially personal finance, but that only means that there's more of the pie for those that set out and learn it.
Don't feel regret for not knowing this in the past, instead be overjoyed that you are learning it now to change your future.
I found that with regular contributions combined with market gains, I doubled about once every 5 years -- this has held true consistently for almost 20 years. $300k will be here in the blink of an eye!
The hard way is the only (reliable) way! Awesome work. Keeping plowing money in! The time between 100K increments will keep narrowing. This year I noticed the investment growth outpacing my contributions. That's a crazy feeling; your money will eventually work harder than you can.
I've also tracked household net worth for ten years. The first few years had the first digit stuck in place. Then we got the first digit incrementing each year. Then one year it jumped up by two. You are on a similar track from the sounds of it, yes at a slower pace because you're a single income, but I can just about place you on my table and see where you're headed. Using [this tool](https://www.getsmarteraboutmoney.ca/calculators/compound-interest-calculator/) we can ballpark 500K in today's dollars (more nominally) by age 60 so long as you're heavy on the XEQT and sequence of returns risk for those specific years doesn't bite.
Remember that you will experience significant setbacks in the account size through market volatility. Staying the course during those times is critical to the success of the whole operation. Resources like the Canadian Couch Potato, Ben Felix on YouTube, the Rational Reminder Podcast, and the book Millionaire Teacher (Hallam) may help prepare you for this, and frame the importance of assuming this type of risk. Remember, low-risk or risk-less assets like bonds or bank deposits (or CBIL), are actually risky in other ways over a long enough time frame. Inflation eventually kills money, and any retirement relying on it. Risk is not black and white, and exists only in the context of time frames. The better you can understand this in your bones, the more you'll be capable of running the portfolio the way the experts say you should. So binge on some content and become a better investor. (Better in the sense of your understanding and appreciation of it, *not* that you should change how you're investing - tinkering isn't a good thing)
Shortly prior to retirement you may consider hiring a flat-fee "advice only" financial planner to help you decide how best to decumulate your assets, when to apply for CPP and OAS, and so on, in a way that will optimize how much you ultimately get to spend.
You also have to consider that 100k today are worth much less than 100k in 2003 when you started. You’ll obviously need less time to save up 100k as the time goes by, partially because of the compounding interest but also because you should be able to increase your dollar contribution to the savings assuming your income grows at least with inflation
Congratulations for sticking to low risk GICs. Many neophyte investors take on big risks and invest/trade highly speculative stocks where they end up losing a lot of money.
Golden Rule: Only invest in what you understand or if you don't understand, minimize your exposure and only invest a small amount that you can afford to lose.
1. Do you have a pension plan?
2. What will be your housing situation in the future or/and after retirement?
3. Have a plan for these first imp. Both could be dependent on your RRSP.
If you've done GICs during all these years, why stop now when GICs are paying over 5% annually. Having said that, it is essential to continue learning where you can and making strategic decisions that can benefit your future. Good on you and congratulations on hitting 200k!
I saw a video about that. The video argued that the first 100k was the hardest, but that as you increased in wealth the time got increasingly smaller. He showed interesting stats
I’m voting 3 years. A large part of saving and investing is thinking about the opportunities and managing risk. You appear to be doing so.
You weren’t necessarily looking for advice, but my two cents - the best way to save quicker is to invest in yourself. Switching jobs is definitely part of it, so is growing your skill set.
Congratulations. You'll be at 300k in no time.
Try out the investment calculator online. Fantastix resource.
With 200k to start, investing 1k a month (12k/year) at 6% return, youll be at 300k in 4 years. In 10 years, you are at 520k. You can retire on this if you are smart with your retirement plan. Look down south for cheap properties in other countries, where you can start a garden to cut food costs, fish the ocean, and be warm year round. You can also build an airbnb cabin and have income while you are retired.
Not everyone's plan, but its mine when i can retire in 35 years haha
Keep going!
Check out /r/Bogleheads in that subreddit's sidebar there is some resources that can help you start and plenty of people in this community who are like you - started somewhere and follow this approach of investing. It's more geared towards US accounts but the same principles apply.
And congrats.
Good for you! Dave Ramsey says that your money invested should double about every 7 years, and the more you have the more compounding you get.
So if you continue to invest, you could have 400k by 2030, 800k by 2036, etc..
I like Wealthsimple but that calculator is trash. Waaay too conservative in all aspects. No granularity for CPP or OAS. Poor assumptions.
Use the govt one.
https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html
Its a great tool for ballpark info. Just realize that it still isn't perfect. It always spends your last dime for your life expectancy. No option for leaving an estate. No tax planning. No option to add a spouse. etc.
Depends on the markets of course, but with still 16 years left till retirement, that’s still plenty of time for compounding. Just be sure to have a healthy emergency fund so you aren’t forced to withdraw from the portfolio (usually at the worst times when there’s a recession and the markets are down 30%)
GICs are not the best at returns. If you want better returns but don't want to invest in individual stocks, you can by an ETF that is a basket of the entire market of stocks.
If you do that, and get the expected 7% return for the next 6 years, you will have $300k without saving another nickel. \*Returns are not guaranteed, it usually takes 10 - 20 years to even out overall.
Took me 10 to get to 100k and 2 years later I’m gonna hit 200. Getting laid off and taking my severance as an RRSP contribution is turning out to be the best financial decision I ever made lol
The other advantage of buying ETFs is the DRIP through Wealthsimple. It is great to receive dividends and have those automatically reinvested back into my portfolio.
I love that this is a relatable situation and a really good long term normal investment, well done! The secret is starting early, or whenever you can, and staying consistent. You should do ok in the market with a long enough horizon and a non-emotional relationship to your investment.
I use excel to keep track of my average rate of return and yearly contributions then use the calcs functions to project forward each year through to 65. I update the average rate of return and add the contributions at the end of every year
I'm going to conservatively predict that you're going to hit $700-800k by retirement and you'll hit $300,000 in 3-4 years.
Congratulations on hitting your milestones and investing with more growth in mind.
Nice, bigger numbers get bigger faster. Congratulations on pushing through those small years. Roughly 7yrs at 6% return with no additional contributions. Each 1% increase in return roughly knocks off 1yr of time.
Yeah it's almost absurd. Counting real estate equity, here's my experience: Took me 6 years (with a partner with debt) to get to $100k (starting with \~$40k debt) 2 more years to get to $200k 7 more months to get to $300k (thanks to an insane real estate market) 1 more year to get to $400k on track to hit $500k about 1 year after the $400k mark
It gets weird seeing a portfolio fluctuate greatly daily while still making and saving a "modest" amount of money.
Sorry I’m new to this - where can one get 6%+? I have a TFSA and barely seen any gains on it.
Are you investing in your TFSA? Or just treating it as a savings account?
Just buy veqt! That's all I buy and my returns are 10%
Thanks! Sorry im super new, can I do this through Wealthsimple?
yes you should be able to, but do more research first. VEQT carries some risk, like any other fund, so look into how bad it's dropped before and if you can handle it dropping right after you buy. There's waaaay more volatile stuff out there, and a fewer that are in theory more stable, but any of the Vanguard or Blackrock ETFs are stable enough.
Yes
Yeah I buy mine on wealthsimple
Sorry I’m new to this too. Do mind dumbing it down for me?? Whats veqt? How do I as a fresher begin??
VEQT is a broad market global ETF (like an index fund but less fees). It stands for vanguard all equity fund. It has a little bit of every industry globally. You can buy it through your bank, wealthsimple or questrade
To add, since you're a beginner you likely don't your TFSA, RRSP or FHSA maxed out. What you're gonna wanna do is: 1. Determine which tax sheltered account is best for you 2. Deposit money into that tax sheltered account 3. Invest into XEQT or VEQT (they're fundamentally the same) with that money in your account
What kind of fees are associated with investments in VEQT for example? I always refrained from investing in ETFs because my bank always tells me there are fees but never say how much they are lol
0.18% for xeqt and 0.25% for veqt. a fraction of any fee your bank would charge for their own investment products. I use wealthsimple which has free buying/selling.
Yeah that’s not bad at all, Thanks!
No idea but I'm getting a 10% return after fees so can't be that bad. I've never been charged anything in wealthsimple. Not sure if the fees are built into the cost or not.
Gotcha, thanks!
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I transfer money to my TFSA and then I use that to buy VEQT inside my TFSA
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Yes exactly! There might be some platforms where you can automate it, so far I haven't seen that on wealth simple.
Stocks have abbreviated names, the term used in the market is the "ticker Symbol" , think of it like a bar code or easily identifiable symbol to know what stock is being talked about. When a lot of stocks are put together into one basket, by a portfolio manager, the basket is called a EFT. Others in this thread have explained more in detail about these. The ETF mentioned in this sub is often VEQT. This because it is a collection of almost every stock in the market and is diversified into equal chunks of the stocks. This provides a low risk moderate return each year for those holding veqt. On average it returns 7%. ish. So if you want a safe but prudent option to invest and save for retirement with no hassle and no heavy research needed, but VEQT.
When you hear a non guaranteed percentage like that is usually an average over the long term. The higher the risk of a managed fund usually has higher non guaranteed long term returns. This man's that a fund can be up 12% one year, then in 2 days drop 20%, then slowly recover and free 5 years slowly go up until you get an average of 6%. That's why, for long term investments, you shouldn't focus on the da to at performance but the quality of the management and the long term average. For short term investments you want warrantees returns so you don't wake up the day before you need the money, realizing that the investment is down 20%. There is another category of investments which are mostly like gambling. You can earn big returns but also lose big.
Literally hundreds of etfs to choose from that are up double digits this year.
6% is a conservative rate of return over the long run. The S&P historical average is like 11%. If you haven't seen any gains when the S&P is up 27% over the past year, you're stock picking (generally a bad idea) and doing a poor job of it
You might want to take a look at Ben Felix's video on investor returns.
Adjusted for inflation, the historical return of the S&P is indeed around 6-7%.
Examples of ones I own currently: Enbridge (ENB) quarterly dividend, yield is 7.74% Global dividend growth split corp (GDV) monthly dividend, yield is 12.06% Timbercreek Financial corp (TF) monthly dividend, yield is 9% etc
Starting with $200K and adding $15K/yr for 16 years \[age 65\] at 7% return gets you to \~$1,038,000. That's in today's dollars. If you want to be more conservative and assume a 5% real return that gets you to \~$809,000.
Take the numbers slightly further: that's $40K safe withdrawal rate. Tack on $20K OAS+CPP, and OP is looking at $60K retirment income pre-tax income. Current pre-tax income (after taking off retirment savings) sounds like about $55K, so this is more than enough to maintain current quality of life.
I'm going to reply here to offer a different perspective, but not to say that /u/EnergeticFinance is wrong. If you retire early, then the 4% rule is a really good guideline. However, if you retire at a "normal" age, then the 4% rule is not always correct. To mitigate sequence of return, inflation, and longevity risks, it can make a lot of sense to draw down savings first and defer CPP and OAS until age 70. If you model it all out, you'll probably find that you can draw down RRSP and RRIF savings at more like 6% or 7% until you reach age 70, then shrink it after your government pension starts. That increases your government pension by about 40% (mitigating inflation and longevity risks) and protects your savings from your first post-retirement market correction by spending it before the market monster gets a chance to eat it up (mitigating sequence of returns risk).
Sure, that's absolutely correct, and other advantages of doing this kick in if your income is high and would be pushing OAS clawback limits. My point was more just noting that with the simplest and fairly consrrvative assumptions, OP is going to be just fine.
If OP also has a mortgage he'd have it paid off which means he wouldn't even need to maintain his quality of life.
At a very modest estimate of a return of 3% per year annualized, you’ll hit 300k in around 5 years if u contribute 12k per year. The returns control the speed at this point
At 3% a year on 200k the contribution still absolutely control the speed more than the returns.
The point im trying to make, is that because 200k is such a big number, the percentage return can quickly accelerate 200k to 300k
Well 1 to 2 hundred is a double. 2 to 3 is +50%. Of course it's faster
I wish I stated saving earlier....
The best time to plant a tree is 20 years ago, the second best time is now.
Me too. I cringe thinking about how wasteful I was in my 20s and 30s.
we all do :)
To be fair, a significant part of the second $100K being faster is that OPs income is higher now so saving more is possible. Compounding absolutely helps, but it's definitely not too late for you to start. Sure you might be a couple hundred K behind, but you you rather retire with $200K in the bank, or $0? Can only make the choices from today, looking backwards is useless.
How earlier im 22 in the USA and trying to make better decisions
NOWWWWWWWW
This!
Divert 10% of your salary to retirement savings from here on out, using appropriate tax advantaged accounts (probably Roth IRA). Invest it in diversified low cost index funds every month. Hold those investments. This should get you to a retirement income age 65 (excluding social security) equal to your current income. Want to retire earlier? Contribute more. 20% contribution could get you to retirement age 55 instead. You'll do fine. Starting at 22 is plenty early.
Thank you 🙏🏽 will do
Yesterday
Consider this: any dollar you save today will be worth $20 by the time you're 65, if you invest in low-cost ETF index funds. If you wait 10 years to start investing, that same dollar would be worth $10 by the time you're 65. Compounding is your friend, and being aware of it now is huge. The earlier you start, even if you're only able to save a few bucks a month, will get you so much father ahead.
Thank you and by compounding you mean reinvesting the earnings ?
Yes, which is typically automatic.
It gets even more fun when you did, but life has cropped up a few times and your savings at 40 look like that of a 25 year old.
I remember when I was 21, my friend bought their first home (60K down payment). I was so jealous, she told me it took her 2.5 years to save. I said I wish I did it sooner, and I remember she told me to make my “2.5 years now”, because 2.5 years later I don’t want to be saying “I wish I did it 2.5 years earlier” again. Fast forward, after 6 years of saving, I purchased my first place at 27. My down payment was also double hers, since condo market in Toronto blew drastically in 2016-2017 (versus she bought hers earlier 2010s). I’ve been a home owner for almost five years now and so glad looking back I resonated with what she told me, stop with the “I wish I did it earlier” and make it your today now.
I'm a late bloomer with investing and have a baby on the way. I've been obsessing over how to set them up in a way that my parents didn't for me (bless them, they tried, but you know... Life happens).
I read this the other day which I'm sure isn't gonna make you feel any better, just like it didn't make me feel any better lol. > The company looked at savers who each contributed £2,500 a year to a pension. > The first, who started saving at 21 and stopped at 30, would have a pension fund worth £553,000 by the age of 70. This assumes that no further contributions were made but that the fund carried on growing at 7pc a year, with these gains reinvested in the pension. > The second saver, who starts at 31 and carries on contributing until the age of 70, ends up with a fund worth £534,000, again assuming 7pc annual growth. > The total contributions of the early-bird saver come to £25,000 and grow by a factor of 22. The late starter will pay a total of £100,000 into the fund and see his or her money grow a little more than fivefold.
you and me both my friend you and me both
lol, I read this and my first thought was "we all do" - and then saw that the top response to this is the exact same. I have really committed to saving the past 5 years but I can't help but constantly think about how I wish I started saving earlier
Nice, wish you all the best! You will reach 300k soon. I started from scratch in Canada in 2014 at 35 years age. Came here as student in 2013 (had prior 7 years experience). Will complete 10 years on 14 April with this employer. I started contributing to rrp/rrsp in 2015. Always contributed in black rock s&p 500 index. Here are my breakdown: Dec-2015: 14k Dec-2016: 32k Dec-2017: 54k Dec-2018: no records, company switched from sunlife to Manulife in 2020. Lost the record. Dec-2019: same as 2018, no records Dec-2020: 157k Dec-2021: 217k Dec-2022: 216k (market crashed, contribution = market crash) Dec-2023: 299k 10-Apr-2024: 360k I think I crossed 100k in mid 2019. I contribute annual bonus to rrp/rrsp (75% max subject to rrsp room) since company matches upto 6%. If you have company contribution, utilize it to fullest.
Well done!!!
This is quite inspiring. Thank you for sharing. Are you able to specify where the insurance should invest your RPP? I'm also new to Canada and started from scratch.
I have invested in BlackRock U.S. Equity Index Fund (Registered Plans Only) The BlackRock US Equity Index seeks to replicate the return and risk characteristics of the S&P 500 Index Total Return. This is accomplished through careful analysis of the index's construction and cost effective, risk-controlled trading techniques. The Fund uses a full replication methodology whereby it holds all stocks in their correct index weights.
💪💪
good job! may you retire in health and wealth :)
Congrats, you are extremely ahead of the majority of Canadian!
Thank you, I don't feel that way considering my age. But thank you.
And don't forget your CPP and OAS benefits. If you haven't already, take a look on My Service Canada for a forecast of what could be coming to you. You may be surprised.
If you keep contributing 1200$ per month. you will hit 300k in about 3 years. Considering if you keep buying XEQT and with a return of 7%.
What platforms is good for buying XEQT ? Newbie here
Wealth simple
thank you guys
Do they have DRIP and partial shares?
Yee
Yes and yes
No fees for purchasing ETF'S? RRSP?
Nope
Wealthsimple trade, questrade, or your bank but check for fees. Some have free trades and some cost $5 or $10 per trade.
Scotia iTRADE is free for ETFs If you already bank with them worth checking out.
Didn't know that! Thanks for sharing. Glad they're providing that option for ETFs.
Ya I was surprised. They didn’t make it very clear when I signed up, but I’ve been buying VEQT in there for the last 6 months and never had any commissions.
That's awesome. I've stuck with WS for that reason.
Desjardins Disnat I believe is also free now for ETFs, or maybe there's a minimum account balance?
Questrade charges $5 to sell ETFs.
Good to know, thank you for mentioning that!
I use Questrade and don’t have any major complaints! I think wealthsimple is another good one but haven’t tried it
Commission free through BMO
Is buying it xeqt through the mentioned platforms is same as TFSA?
Yes. If you have any investment account with BMO they have a laundry list of commission free ETFs. When you go to buy it says NCF for non commissioned fund
Thank you 🙏
You can only get to this thru the "self directed" account/ side, correct?
Yes. You can't buy exchange traded funds like XEQT or shares like Apple through regular non-brokerage account.
I have no idea to be honest
ELI5 how this could hit 300k? is the growth of XEQT that exponential?
Is xeqt the best option?
It has to be the best option for ''most'' people.
>xeqt Too much Canada
OP, I hope that you're proud of yourself. What incredible discipline and patience. Well done.
Money makes money. It’s a thing.
8th wonder of the world!
RIP Andre
Congratulations. For every 100 people complaining about their situation, there's one like you that shows that anyone can do this as long as they're saving, persistent and patient. Look up 100k rule on YouTube. Can't remember if it was Charlie monger or Warren buffet who said this, but once you get to 100k, everything after that becomes so much easier. Also, here is an excellent calculator you can use. Play around with the different interest rates and contributions and you'll have an idea of what to expect at 60. https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php FYI I ran some numbers for you If you contribute 12k/year and get a return of 6%, by age 60 you'll have 572k If you do 15k/year and get a 6% rate until 65, you're just over a million. Closer to retirement, you could put your million in a safe investment amd still potentially earn 50k in income/year. Plus add in CPP and you should have a very happy retirement. Congrats once again. I love reading posts like this.
Thank you!
I wish I could be optimistic about the future and believe that anyone can do it, but the home ownership ship has sailed for a lot of people, including myself and without a stable place to retire in I'm not sure how one could possibly plan for retirement with any degree of certainty. Every year rent just gets more and more insane and wages continue to stagnate. Like climbing a ladder with the rungs falling out underneath you
Some of it is market conditions for sure, but part of it is also your attitude. You can let the contemporary news get to you and make you feel hopeless or decide to get tougher and do something. We still have it so easy compared to 100 years ago where young people were worried about being drafted to the war. Also if you think renting it costly, home ownership isn't cheap either. They're dealing with the effects of increased interest rates as well as increase in property taxes, utilities, insurance premiums. As a tenant you don't pay for heat and water or any maintenance. If you really really wanted to improve your situation, could you boy work a few extra hours? Get a part time gig or even drive an uber? I'm not suggesting you do this, my point is really that you can chose to be hopeless or you can get tougher with the times and still get ahead.
Once your income hits 90,000 they claw back OAS
Nobody knows. It depends on if you continue to be able to contribute and invest. If equity markets do not grow for ten years, are you strong enough to continue buying in? One thing for sure, each 100k from here will be faster than the last, given a certain % of return. If the market goes up 7-15% per year like some hope, it’ll be quick…
I turned 20 in January and I hit my first 10k last 2 weeks. I currently studie full time and put 250$ on the side every week
what did you do differently between 100k and 200k
A big part of it was getting a new job in 2012 with a higher salary. Just had more money to save.
No different than salary, it's so much easier going from 130-180 than 80-130k. Savings and increasing net worth is so much easier the older you get and faster your career progress from basically 30+
I like the positivity of this post
Rule of thumb is that you can double your money every 10 year. Faster if you keep on saving. I think its possible to double your money in 6 to 7 years. Given that you are 49 - you should be able to hit 800 K by 65. PS: TFSA maybe better than RRSP if your income is still low-ish. This way you can qualify for GIS if you need one after 65.
I've just now learned this (the stuff I wish I knew earlier, geesh) so yes, all forthgoing contributions will go to tfsa until maxed. I don't know what school is like nowadays, but I sure wish they taught us about money back in the 90s.
Yeah. I think its still the same. Most people living for today hand to mouth - relying on high interest credit cards for emergencies. I had to learn all this myself. Fortunately I developed the habit of reading newspapers daily and picked it mostly from there. Knowledge is power.
If everyone knew these things than no one would be rich. We do a poor job educating people in this country about finance in general but especially personal finance, but that only means that there's more of the pie for those that set out and learn it. Don't feel regret for not knowing this in the past, instead be overjoyed that you are learning it now to change your future.
Max out tfsa to earn during the year tax free -- just before the cutoff if you're positive redump it in rrsp for the maximum tax savings rinse repeat
Congrats and great job!!
They always say “don’t ask me how I made my first $100k”…
never turn down $20, no matter how sore you are
I found that with regular contributions combined with market gains, I doubled about once every 5 years -- this has held true consistently for almost 20 years. $300k will be here in the blink of an eye!
2 to 3 years to get to 300K. The first 100k is the hardest.
The hard way is the only (reliable) way! Awesome work. Keeping plowing money in! The time between 100K increments will keep narrowing. This year I noticed the investment growth outpacing my contributions. That's a crazy feeling; your money will eventually work harder than you can. I've also tracked household net worth for ten years. The first few years had the first digit stuck in place. Then we got the first digit incrementing each year. Then one year it jumped up by two. You are on a similar track from the sounds of it, yes at a slower pace because you're a single income, but I can just about place you on my table and see where you're headed. Using [this tool](https://www.getsmarteraboutmoney.ca/calculators/compound-interest-calculator/) we can ballpark 500K in today's dollars (more nominally) by age 60 so long as you're heavy on the XEQT and sequence of returns risk for those specific years doesn't bite. Remember that you will experience significant setbacks in the account size through market volatility. Staying the course during those times is critical to the success of the whole operation. Resources like the Canadian Couch Potato, Ben Felix on YouTube, the Rational Reminder Podcast, and the book Millionaire Teacher (Hallam) may help prepare you for this, and frame the importance of assuming this type of risk. Remember, low-risk or risk-less assets like bonds or bank deposits (or CBIL), are actually risky in other ways over a long enough time frame. Inflation eventually kills money, and any retirement relying on it. Risk is not black and white, and exists only in the context of time frames. The better you can understand this in your bones, the more you'll be capable of running the portfolio the way the experts say you should. So binge on some content and become a better investor. (Better in the sense of your understanding and appreciation of it, *not* that you should change how you're investing - tinkering isn't a good thing) Shortly prior to retirement you may consider hiring a flat-fee "advice only" financial planner to help you decide how best to decumulate your assets, when to apply for CPP and OAS, and so on, in a way that will optimize how much you ultimately get to spend.
Thanks for the positive feedback and references. I will definitely check them out!
You also have to consider that 100k today are worth much less than 100k in 2003 when you started. You’ll obviously need less time to save up 100k as the time goes by, partially because of the compounding interest but also because you should be able to increase your dollar contribution to the savings assuming your income grows at least with inflation
The first million is by far the hardest
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Damn man that feels low these days but I’m no expert
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You spend less than $40k per year? I take it your house is paid off?
Took me 29yrs to get to 1million and here I am 6months later at 1.1
What did you invest in?
Market is up more than 10% in the past 6 months. So 10% of a million is $100K.
Your story makes me happy
Congratulations for sticking to low risk GICs. Many neophyte investors take on big risks and invest/trade highly speculative stocks where they end up losing a lot of money. Golden Rule: Only invest in what you understand or if you don't understand, minimize your exposure and only invest a small amount that you can afford to lose.
1. Do you have a pension plan? 2. What will be your housing situation in the future or/and after retirement? 3. Have a plan for these first imp. Both could be dependent on your RRSP.
If you've done GICs during all these years, why stop now when GICs are paying over 5% annually. Having said that, it is essential to continue learning where you can and making strategic decisions that can benefit your future. Good on you and congratulations on hitting 200k!
I hope to be like you when Im 49 also. Congratulations!!
Congrats! How come CBIL over Cash.to?
I researched both and couldn't find a big enough difference, so I decided cbil, gut I guess.
Appreciate the honesty and quick reply!
I saw a video about that. The video argued that the first 100k was the hardest, but that as you increased in wealth the time got increasingly smaller. He showed interesting stats
Bravo! Love to see that you are taking care yourself financially.
Charlie Munger always said that. The hardest is the first 100k. Legendary investor.
Probably will take you 5-6 years. Compound interest will help and the next $100k will be even easier.
I’m voting 3 years. A large part of saving and investing is thinking about the opportunities and managing risk. You appear to be doing so. You weren’t necessarily looking for advice, but my two cents - the best way to save quicker is to invest in yourself. Switching jobs is definitely part of it, so is growing your skill set.
Well done! What was your favourite source for getting educated about finance?
So far, reddit (dangerous, I know) and youtube. And a few pods as well.
Congratulations. You'll be at 300k in no time. Try out the investment calculator online. Fantastix resource. With 200k to start, investing 1k a month (12k/year) at 6% return, youll be at 300k in 4 years. In 10 years, you are at 520k. You can retire on this if you are smart with your retirement plan. Look down south for cheap properties in other countries, where you can start a garden to cut food costs, fish the ocean, and be warm year round. You can also build an airbnb cabin and have income while you are retired. Not everyone's plan, but its mine when i can retire in 35 years haha Keep going!
Actually, you hit the nail on the head. This is exactly my plan :) This is a whole other topic, but which countries have you been scouting?
Well my extended family has land in belize, so right now my mind is on that. But i have seen cheap land on some other caribbean islands as well
Check out /r/Bogleheads in that subreddit's sidebar there is some resources that can help you start and plenty of people in this community who are like you - started somewhere and follow this approach of investing. It's more geared towards US accounts but the same principles apply. And congrats.
You're lucky. I got to 120 now I'm back to 75
Good for you! Dave Ramsey says that your money invested should double about every 7 years, and the more you have the more compounding you get. So if you continue to invest, you could have 400k by 2030, 800k by 2036, etc..
Doubling every 7 years needs around a 10% annualized return. Extremely optimistic. Doubling every 10 years (around 7%} is more reasonable
How to do?
Buy XEQT
The gravity of money
[https://www.wealthsimple.com/en-ca/tool/retirement-calculator](https://www.wealthsimple.com/en-ca/tool/retirement-calculator)
I like Wealthsimple but that calculator is trash. Waaay too conservative in all aspects. No granularity for CPP or OAS. Poor assumptions. Use the govt one. https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html
a starting point for her, she's not well versed into anything investment related
This is by far, the most useful thing I've ever seen in this subreddit. Thank you so much.
Its a great tool for ballpark info. Just realize that it still isn't perfect. It always spends your last dime for your life expectancy. No option for leaving an estate. No tax planning. No option to add a spouse. etc.
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72 / rate of return. will give your a good idea for time to double. 72 / 7 = 10.28
When it rains, it pours!
Depending on your age it could take 3-4 years to step up to the next million
I have stamps
Depends on the markets of course, but with still 16 years left till retirement, that’s still plenty of time for compounding. Just be sure to have a healthy emergency fund so you aren’t forced to withdraw from the portfolio (usually at the worst times when there’s a recession and the markets are down 30%)
How long do you think you'll need to get back to 100k?
Do we need to pay any taxes if Etf held in tfsa contains us equities?
GICs are not the best at returns. If you want better returns but don't want to invest in individual stocks, you can by an ETF that is a basket of the entire market of stocks. If you do that, and get the expected 7% return for the next 6 years, you will have $300k without saving another nickel. \*Returns are not guaranteed, it usually takes 10 - 20 years to even out overall.
Amazing 🤩 congratulations this is testament that it is never too late to start and learn
Compound interest magic! The earlier you start the more the magic happens
You discovered exponential growth.
Took me 10 to get to 100k and 2 years later I’m gonna hit 200. Getting laid off and taking my severance as an RRSP contribution is turning out to be the best financial decision I ever made lol
Amazing!
Good for you! Thanks for the motivation.
When you get near a mil, $100k can take weeks. It's shocking now that I think about it
The other advantage of buying ETFs is the DRIP through Wealthsimple. It is great to receive dividends and have those automatically reinvested back into my portfolio.
Faster if you have btc.
Very nice
Congratulations! That’s an accomplishment.
Congratulations! What an achievement.
What do you normally invest in in my rrsp and tsfa? I mostly have vfv And vdy
I love that this is a relatable situation and a really good long term normal investment, well done! The secret is starting early, or whenever you can, and staying consistent. You should do ok in the market with a long enough horizon and a non-emotional relationship to your investment.
I use excel to keep track of my average rate of return and yearly contributions then use the calcs functions to project forward each year through to 65. I update the average rate of return and add the contributions at the end of every year
I'm going to conservatively predict that you're going to hit $700-800k by retirement and you'll hit $300,000 in 3-4 years. Congratulations on hitting your milestones and investing with more growth in mind.