How we paid off our house in three years

[n a m]

How we paid off our house in three years (http://ca.pfinance.yahoo.com/ca_finance_loans/11/how-we-paid-off-our-house-in-three-years)


All I can say is WOW...

[daytonarfd]

incredible!

[Magoomba]

Somehow that doesn't sound right.
I don't care how frugal they are, there's no way you're going to save 80%. If the guy worked 4 jobs, he would have been taxed through the nose.

[trusoulja2g]

My family paid off the mortgage on our first house in 3 years, but that was on a $148K house with 25% down. Back when my parents and their friends were buying houses <$200K, paying off in 3-5 years was standard.

[Chookman]

Somehow that doesn't sound right.
I don't care how frugal they are, there's no way you're going to save 80%. If the guy worked 4 jobs, he would have been taxed through the nose.


He said 80% of their AFTER TAX income was saved.

[pipolchap]

i can't wait to pay off my mortgage!

...so who do i contact at RBC to make 20% annual prepayments? i can't see that as being negotiable.

[Wiseman]

Is it worth it? All the stress and abuse his body took during those 20 hour work days will probably take 10 years off his lifespan.

[Sylvestre]

this article (along with others in a similar vein) was recently featured in Moneysense. Either the latest issue or the previous month. Not that bad of a read.

IMHO, not worth it. Sure, he went from debt to having 400K in equity (but not usable cash), but he hasn't had a single vacation, doesn't have a single story to tell people and who knows what his social life is like.
Personally, I'd rather enjoy the company of friends, be able to go to the caribbean/europe occasionally, and overally, enjoy a nice meal rather than be 100% debt free.

Quality of life is more important than the dollar figure of my bank account.

[Tofu Drift Shinji]

Wow... that's incredible. That guy is certainly a role model. I don't envy the 99 hour work week, but I could learn a thing or two about saving money from him!

[Bullseye]

this article (along with others in a similar vein) was recently featured in Moneysense. Either the latest issue or the previous month. Not that bad of a read.

IMHO, not worth it. Sure, he went from debt to having 400K in equity (but not usable cash), but he hasn't had a single vacation, doesn't have a single story to tell people and who knows what his social life is like.
Personally, I'd rather enjoy the company of friends, be able to go to the caribbean/europe occasionally, and overally, enjoy a nice meal rather than be 100% debt free.

Quality of life is more important than the dollar figure of my bank account.

Second that.

[yelworC_]

At that lifestyle (if it can be called a life), no wonder his father died at 52 (as the article mentioned, the father was the guys role model, so assume he worked like crazy too).

[Audiogenic]

Work to live....not live to work.

[hicksticks]

More of a How-To in getting divorced.

[mok86]

At that lifestyle (if it can be called a life), no wonder his father died at 52 (as the article mentioned, the father was the guys role model, so assume he worked like crazy too).


the father retired at 52 not died...

[Rosico]

Ha, I like the one sentence where he notes his wife thought they were pushing it too hard ...

I'm sure she was wondering wtf did I get myself into at times.

[dark169]

I'm all for paying down the mortage faster but not at that rate. Does one enjoy their home any more becuase its paid off a few years sooner rather then say sitting in the same home and remembering back to the trip to europe

[roguechameleon]

this article (along with others in a similar vein) was recently featured in Moneysense. Either the latest issue or the previous month. Not that bad of a read.

IMHO, not worth it. Sure, he went from debt to having 400K in equity (but not usable cash), but he hasn't had a single vacation, doesn't have a single story to tell people and who knows what his social life is like.
Personally, I'd rather enjoy the company of friends, be able to go to the caribbean/europe occasionally, and overally, enjoy a nice meal rather than be 100% debt free.

Quality of life is more important than the dollar figure of my bank account.

Short term pain, for long term gain.

[Sylvestre]

Here's another point,
Don't know precisely what this guy was making, but social work isn't really on the upper end of the pay scale (masters or not). I would think it's significantly easier to get paid twice or 3x more than to work twice or 3x more hours.

if the guy was making say 40K/yr (for only 40hrs of work) and working 80-120hrs per week, he'd be taking home 120K.
Personally, I'd rather work hard in school and get a job that'll pay me 60K-80K+ after the first 5 yrs.

but at the end of the day, it's up to each person's personal priorities.

[koft]

Here's another point,
Don't know precisely what this guy was making, but social work isn't really on the upper end of the pay scale (masters or not). I would think it's significantly easier to get paid twice or 3x more than to work twice or 3x more hours.

if the guy was making say 40K/yr (for only 40hrs of work) and working 80-120hrs per week, he'd be taking home 120K.
Personally, I'd rather work hard in school and get a job that'll pay me 60K-80K+ after the first 5 yrs.

but at the end of the day, it's up to each person's personal priorities.

Well i think there is a moral to the story, even though he is a HS drop out, through hard work and dedication, you can still be financially independent.

Remember it was a 2 incomes family, wife was teaching and tuitoring. so that adds another 45k/year... after tax (32k) his after tax about (80k).....so saving up 80k a year is possible.. but just a little bit extreme.

[ynot]

Complete BS! "During this time, neither of us made much more than $60,000 a year at any one job." I interepret this as one or both of them had at least 1 job that was paying just over $60,000 annually. Add into that a second job that maybe pays 20k each, and of course it's feasible. Finally, housing in Milton isn't the same cost as housing in a large urban area.

[Bullseye]

[QUOTE=ynotFinally, housing in Milton isn't the same cost as housing in a large urban area.[/QUOTE]

The house type he describes in Milton sell for $350-$400K right now, to start. Milton is the edge of the GTA, lots of commuters.

[William W]

I think it is all about balance in life.

What's the good of making money if you can't spend them and enjoy other things in life?

[ak47num1]

I must say I have enjoyed reading this article. To me, it is a feel-good story of someone who has strayed off during his teens years, but through hard work and sacrifices, was able to build a good life. I think as long as he treats his wife with respect, their relationship shouldn't have any problem. It sounds like they are fighting side by side. The author also mentioned how one of them can now afford to stay at home and look after their family if they wish to. This idea to me sounds like a healthy family.

Of course, the author is not persuading us to follow his path. He is merely telling us that our financial situation is not as bad as they think. Through determination, it can be improved. Nevertheless, the lifestyle we choose is entirely our choice. Life now vs. Life later. No sacrifice, no return.

[n a m]

Its a good example of people who have set a plan in motion and have achieved it. Buying your house and paying off the mortgage is one of or BIGGEST thing that happens financially over a lifetime of someone. They wouldnt be telling us this if it hasn't happened.

When you look at people living in cities... like Vancouver... there is a possibility that mortgages that will become inter generational in the near future like Asia already. Who can afford 500K, 750K, 1Million dollar mortgage working on 32K (national GNP avg) or 50k even 100k pushs limits of changing lifestyles considering you can only borrow so much to finance debt.

It's all about promoting financial prudence. Personally I'd like to do the same but it's a big scarfice. It's an extreme case but with your current situation you always apply features they used which people fail to take advantage of.

[Spiderpal93]

Here's another point,
Don't know precisely what this guy was making, but social work isn't really on the upper end of the pay scale (masters or not). I would think it's significantly easier to get paid twice or 3x more than to work twice or 3x more hours.

if the guy was making say 40K/yr (for only 40hrs of work) and working 80-120hrs per week, he'd be taking home 120K.
Personally, I'd rather work hard in school and get a job that'll pay me 60K-80K+ after the first 5 yrs.

but at the end of the day, it's up to each person's personal priorities.

False(at least in Toronto from the place I work at), social workers(with a Masters of Social Work) usually make much more than 40k/year. From the place I work at, their starting salary is $27/hr and can make as much as $37/hr.

[noname]

and i thought paying off my $375,000 mortgage in 6 years was good >:( ;)

[Wiseman]

Remember it was a 2 incomes family, wife was teaching and tuitoring. so that adds another 45k/year... after tax (32k) his after tax about (80k).....so saving up 80k a year is possible.. but just a little bit extreme.

Teachers make alot more than you think. My wife is a teacher in her 3rd year and she's already at 54,000. And that's not even on the highest pay grid.

[r1lee]

i can't wait to pay off my mortgage!

...so who do i contact at RBC to make 20% annual prepayments? i can't see that as being negotiable.

RBC has many programs to help you reduce your mortgage.

http://www.rbcroyalbank.com/RBC:RMUWKY71A8YAARqQs1M/products/mortgages/money_saving_options.html

[ah bao]

wow... that's a very interesting story... he worked so hard and now the mortgage has been paid off he's enjoying his life with his family... but what he did was very extreme...

[john widow]

Well if he worked that much, it mustave not been a boring job. Musta been fun through-out. Theres nothing wrong with working that much, u just do it all day. Also, your body will adapt.

[gei]

Most of our furniture came out of the garbage, and we rarely bought new clothes. We didn't have cable and we didn't go out much. Eventually, we splurged and bought a set of rabbit ears for our old TV.

wow... i pity that guy... what a terrible life

not worth it by any stretch of imagination

[eejikes]

Hmm, sacrifice fours years for a lifetime of financial stability, seems like a great idea to me personally.....

[charliebrown]

Hmm, sacrifice fours years for a lifetime of financial stability, seems like a great idea to me personally.....

I think the $420000 equity is a bit self-fulfilling. Market values have gone up for all homes -- proving that real estate was a great investment for them.

Perhaps they're a bit extreme...but i'd like to pay off my mortgage on the condo in 5 yrs

[vr6man25]

VERY WELL SAID. :)




People are short sighted here...he sacrificed for 3 years to give him A LOT of freedom for the rest of his life.

No usable cash??? Ever here of a line of credit? Also with no mortgage, he has A LOT of free cash flow

No vacations - wow he missed 3 vacation (assuming 1 a year), now he has so much more freedom to go on vacation for longer and to more interesting places

No stories to tell??? Probably thousands of people are reading his article (a story), much more interesting then hearing about someone's trip to cuba - actually most people don't want to hear about your vacation! Also most of my most interesting stories don't involve travel...they happen EVERY DAY.

This guy is smart...prioritized his life, will be able to retire early and won't be a slave to his job and mortgage like most people are today.

BTW...I paid off my mortgage in 4 years!

[curtis]

I don't know... It depends... In his case, he's already lost the best years of his life so it wasn't such a big deal sacrificing 3 more.


People are short sighted here...he sacrificed for 3 years to give him A LOT of freedom for the rest of his life.

No usable cash??? Ever here of a line of credit? Also with no mortgage, he has A LOT of free cash flow

No vacations - wow he missed 3 vacation (assuming 1 a year), now he has so much more freedom to go on vacation for longer and to more interesting places

No stories to tell??? Probably thousands of people are reading his article (a story), much more interesting then hearing about someone's trip to cuba - actually most people don't want to hear about your vacation! Also most of my most interesting stories don't involve travel...they happen EVERY DAY.

This guy is smart...prioritized his life, will be able to retire early and won't be a slave to his job and mortgage like most people are today.

BTW...I paid off my mortgage in 4 years!

[bacid1]

what he did was very smart..

although i wouldn't have gone as extreme as him and would rather take 10yrs paying off the mortgage AND enjoying life at the same time.

there is a fine balance and this guy went a bit too far..

although when he's 60 yrs old and has a villa in mexico... he'll be laughing since most of you will still be working.

personally i plan on paying off my mortgage within 10yrs.

[moebius]

It is not worth going to extremes. You have to find a balance in life. Obviously paying off the mortgage should not be the only thing in life, even in 3 years. I'd rather pay off mortgage in 6 years and have a full life in those 6 years than pay it off in 3 years with too many sacrifices.

I am also trifty, so I don't buy that many new clothes, I also like used furniture or I also pick out something that someone doesn't need anymore. It's just an outlook on life. I don't need much to live, but on the other hand I don't like pilling money just for the sake of it. That's why I wouldn't take another job just to get the mortgage payments. I'd rather spend that free time with family and screw the additional time that will take for the payment. You only live once.

What if this happened: he worked hard trying to pay off a mortgage and then suddenly he got very ill or worse died. I am sure his wife would have been real happy having not had much chance to enjoy the house. These things happen all the time and that's why to me the time is the most important thing in life. Also, one has to wonder what's the point in buying a house if you are going to spend more time outside of the house?

[xwar]

crazy story, but not realistic for most

[maniacshopper]

True, RBC has so many ways to help with mortgages. Like you can use HBP (home buyers plan) to withdraw from RRSP, and you can put some of your mortgage in your RRSP, so you pay yourself back, no interest. It's awesome. If you can live thriftly, you can save so much. REad somewhere where true millionaires are people who don't spend it, can be your next door neighbour. Often, the people who flaunt their wealth are actually in debt.

So true, but do you think they actually reported all their income. Especially, the lessons or tutoring?

Cash cow man.

[BadDrafter]

this article (along with others in a similar vein) was recently featured in Moneysense. Either the latest issue or the previous month. Not that bad of a read.

IMHO, not worth it. Sure, he went from debt to having 400K in equity (but not usable cash), but he hasn't had a single vacation, doesn't have a single story to tell people and who knows what his social life is like.
Personally, I'd rather enjoy the company of friends, be able to go to the caribbean/europe occasionally, and overally, enjoy a nice meal rather than be 100% debt free.

Quality of life is more important than the dollar figure of my bank account.


That's easy to say until you've had your life stolen from you and wake up poor and alone. I'm saving nearly 90% of my after tax income so that I can finally leave this rotten hellhole and never come back.

[rc51]

There's lots of ways to do this..instead of working that hard..or long hours, he could have gotten training in a more lucrative industry..ie trading, law, real estate.

The traders that sit next to me are all in their 30's, and although they have mortgages, they all have very high 6 figure incomes which lends to them having all the toys anyone could want, they put there effort into learning their business and I guess it helps to have some natural talent..these guys don't need to wait until 52 to retire, they'll be retired by 40. Some of our traders down in Baltimore and Houston have retired by 35.

It depends on where you want to put your effort into...I would do the latter, high priced traders, MBA's, lawyers don't work anywhere near 100 hours a week, well they might put in the hours, but how many of those hours are wining and dining clients, golfing, sporting events at company boxes..etc..and they are treated by the company as if they walk on water.

Me..I'm lazy..I'm waiting for my inheritance..as my parents are super cheap and they have a serious disease called 'saving and investing' every penny they have :D

[swifferman]

There's lots of ways to do this..instead of working that hard..or long hours, he could have gotten training in a more lucrative industry..ie trading, law, real estate.

The traders that sit next to me are all in their 30's, and although they have mortgages, they all have very high 6 figure incomes which lends to them having all the toys anyone could want, they put there effort into learning their business and I guess it helps to have some natural talent..these guys don't need to wait until 52 to retire, they'll be retired by 40. Some of our traders down in Baltimore and Houston have retired by 35.

It depends on where you want to put your effort into...I would do the latter, high priced traders, MBA's, lawyers don't work anywhere near 100 hours a week, well they might put in the hours, but how many of those hours are wining and dining clients, golfing, sporting events at company boxes..etc..and they are treated by the company as if they walk on water.

Me..I'm lazy..I'm waiting for my inheritance..as my parents are super cheap and they have a serious disease called 'saving and investing' every penny they have :D

I was thinking along a similar vein but I disagree with you. Spending 70 work hours a week as an invesment banker plus being constantly tethered by your cell phone is not exactly dissimilar to what this guy did.

With that said, the next 10 years of my life should be terrible.

Wish me luck :)

[xwar]

That's easy to say until you've had your life stolen from you and wake up poor and alone. I'm saving nearly 90% of my after tax income so that I can finally leave this rotten hellhole and never come back.

Dude you sound pretty bitter. I'm sorry to hear your parents suck.

[BadDrafter]

Dude you sound pretty bitter. I'm sorry to hear your parents suck.

Yeah, being in a coma for three years will do that to ya. I save $2,500 a month so I never have to see this place ever again.

[Bullseye]

That's why I wouldn't take another job just to get the mortgage payments. I'd rather spend that free time with family and screw the additional time that will take for the payment. You only live once.

That's my take as well. I have a business where the more I work, the more I make, with no real limit (except hours in the day). I turn down work all the time, though, I work less than 30 hours per week, that's about my limit. Time with my wife and son, friends and other family, it's just worth more to me than more money.

Really, anyone here could choose to do the same thing as this guy, most won't though.

[chimaera15]

The fact is that people who support themselves through 4 years of university (tuition, books, housing, utilities, food) by working a full time job live a life that is somewhat as frugal as this guy and doesn't leave much free time or extra income to spend on entertainment. Just like him however you're working towards a goal, in this case earning a degree so that once you graduate you can have a good paying job and then enjoy life. Nothing comes for free, we must all sacrifice something now to reap the benefits later.

[shocknawe]

This guy would be a genius if his master plan was to live frugally for those 3-4 years then write a book about it.

[stevethewheel]

D ual
I ncome
N o
K ids

The hard part of making it work is not having the nice car, nice vacation, etc etc that everyone around you has while you are making the mortgage go away.

[Ducky]

how many people on average can....work 80-100 hours EVERY WEEK...sleep only 2-3 hours a day EVERY DAY....i sure can't...

[beerbaron105]

its not unheard of, my dad paid off the mortgage for our house in 7 years, he was making 110k/yr, his entire income would go to the mortgage (companycar/gas) - and my moms income would go to bills and her vehicle - it meant no vacations, no big expenses, but mortgage free in a short time frame.

[st7860]

pay off the house first.

[rb]

Its a question of balance - I think Western Society places too much emphasis on the "buy now pay later" culture and less on the "save now and spend later"....we want everything str8 away - balance your life, have some luxuries but SAVE SAVE SAVE - u never know when you'll lneed it

[monomono]

One cautionary note about this guy's story is he was pretty lucky with the real estate market. His house went up almost 40% in 3 years (he claims):

In June of 2002, we purchased our first home in a new subdivision in Milton for $302,000...we managed to pay off the whole thing in exactly 952 days. ... Meanwhile, the house had already increased in value to about $420,000.
If you buy a $420,000 house today, can you really expect it to be worth $580,000 in 3 years? I think not.

Another thing, with today's house prices, could he have paid off his mortgage so fast? Again I think not.

[rc51]

If you buy a $420,000 house today, can you really expect it to be worth $580,000 in 3 years? I think not.


Actually you can...depending where you are..your numbers almost mimick our situation..we bought last Sept for 435,000, and I know we can get well over $600,000 today...a month ago, we could have even got close to $650,000 due to the artificially high prices in Calgary.

That's not bad..we should have a solid $200,000 increase in less than one year if we decide to move come Sept. The only drawback is we're moving to a way more expenive place.. DC area, but if we moved back to MB, we'd be mortgage free right from the start with over $300,000 in cash to play with. Its very tempting..but living in an NFL city...well, priceless ;) and I hate being land locked.

[monomono]

That's true, but Calgary is an anomaly. In the GTA the market is much cooler.

[Bullseye]

Actually you can...depending where you are..your numbers almost mimick our situation..we bought last Sept for 435,000, and I know we can get well over $600,000 today...a month ago, we could have even got close to $650,000 due to the artificially high prices in Calgary.

That's not bad..we should have a solid $200,000 increase in less than one year if we decide to move come Sept. The only drawback is we're moving to a way more expenive place.. DC area, but if we moved back to MB, we'd be mortgage free right from the start with over $300,000 in cash to play with. Its very tempting..but living in an NFL city...well, priceless ;) and I hate being land locked.

You're dreaming if you think these types of price gains are sustainable going forward.

[cdnNick]

My mom payed off her house in 5 years, she was a single parent with only her income no money from my father. It was a small 2 bedroom townhouse, but it was still a lot of money for a single parent with a young child. I'm aiming for 10 years when we buy a house next year. The ladies salary will probably go to the mortgage and some bills and I will pay the rest.

[rc51]

You're dreaming if you think these types of price gains are sustainable going forward.

Nothing to do with dreaming or anything being sustainable....I'm talking about now..today or at most next month. We're in, and we're out...with a gain of $200,000+. Who said anything about being sustainable??

[st7860]

yeah. nothing beatings having bought low in 2002, selling high in 2006, taking the tax free cash, and renting for a while and watching the noobs buying in after the run up. lol

[Bullseye]

rc51 - glad you clarified, from three years to next month, because above you said;

'Quote:
Originally Posted by monomono
If you buy a $420,000 house today, can you really expect it to be worth $580,000 in 3 years? I think not.

rc51 - 'Actually you can''

[rc51]

rc51 - glad you clarified, from three years to next month, because above you said;

'Quote:
Originally Posted by monomono
If you buy a $420,000 house today, can you really expect it to be worth $580,000 in 3 years? I think not.

rc51 - 'Actually you can''

You are correct with the 3 year statement..however, having grown up in Vancouver and now being a home owner in Calgary, I've learned you can never be sure what real estate will do...

I thought the growth in Vancouver and the Lower Mainland was crazy..but this past year in Calgary even tops that...so who knows what will happen. They 'pros' are expecting Calgary to keep growing... I think it's all about supply and demand...as long as there's people with the $$$, they'll continue to buy and drive up prices..and don't forget, alot of Vancouver's growth is due to foreign investment..as those in Asia, England see Vancouver as a bargain from where they are at...so it's a matter of time when Calgary starts drawing from overseas..rather than just inter-province migratation.

[st7860]

*cough* $1 houses in Alberta happened before, maybe again? *cough*

[rc51]

*cough* $1 houses in Alberta happened before, maybe again? *cough*

That's why you get in, make your $$$$ and then get out ;)

[dgs]

D ual
I ncome
N o
K ids
.

Give them a kid or two and this plan would have been sunk - no one can work those hours and care for a family even with day care etc - and the costs of raising the children would have wiped out a lot of their savings hopes. Welcome to a society where we would rather pay off our mortgage than raise a family and hello to a nation that will continue to have to rely on immigration to maintain its population for the forseeable future.

[mpt]

I'd prefer to work no more than 40 hours a week and enjoy life and try to save one of the household incomes. It won't let me pay my house off in 3 years, but i'll be able to pay it off in 10.

[rc51]

Welcome to a society where we would rather pay off our mortgage than raise a family

You say that like it's a bad thing?? What's wrong with not wanting to raise a family. Some people just aren't cut out for it...not everyone can make a good parent. What would you rather have...bad parents having even worse kids out there.

We choose not to have kids...we're too busy, and choose to be too busy..it wouldn't be fair to the kids...but we could be selfish, as so many others are, just dump the kids in a daycare...but then what's the point.

[dgs]

You say that like it's a bad thing?? What's wrong with not wanting to raise a family. Some people just aren't cut out for it...not everyone can make a good parent. What would you rather have...bad parents having even worse kids out there.

We choose not to have kids...we're too busy, and choose to be too busy..it wouldn't be fair to the kids...but we could be selfish, as so many others are, just dump the kids in a daycare...but then what's the point.

It's a scary proposition for society as a whole - a shrinking population with increasing age demographics is a recipe for a long term degradation of health services etc etc (unless the working population is going to pay ever increasing taxe rates to fund these things or we continue to supplement that population through immigration) . From an individual point of view - it's your choice what you value and what you want to do with your life. I would not come down so hard on daycare - it is the only way some working parents are able to sustain the two incomes (or one income in the case of single parents) that most families need now.

[rc51]

It's a scary proposition for society as a whole - a shrinking population with increasing age demographics is a recipe for a long term degradation of health services etc etc (unless the working population is going to pay ever increasing taxe rates to fund these things or we continue to supplement that population through immigration) . From an individual point of view - it's your choice what you value and what you want to do with your life. I would not come down so hard on daycare - it is the only way some working parents are able to sustain the two incomes (or one income in the case of single parents) that most families need now.

This is one point of view..but I think there are far more insidious factors at work. Our health care system is based on 'treatment' vs 'prevention'. How many parents out there are teaching their kids proper nutrition, exercise, active lifestyles. We feed ourselves crap each and everyday..I'm amazed at how many families we see at the local McDonalds... you see 300lb parents and the 100lb 10 year olds sitting right next to them.

The downfall won't be just a decreasing population..but more so an un-educated, lazy population.

I'm not hard on daycare..I question the people who have kids for the sake of having kids and then use daycare to raise their kids. Who is actually 'nurturing' these kids? Some stranger that gets paid to do it, or Mom and Dad..no wonder society is failing in general.

We live in a fairly young neighbourhood..lots of little ones running around, it just amazes me the lack of control most of the parents have. Just yesterday we saw a little tyke screaming and running out of a BMW X5, Mom was screaming right back..kid was maybe 6 at most..and he's yelling "I'm running away".. 2 min later, his sister, even younger comes out, screaming and kicking out of the car. Mom had 'zero' control...and from the looks of it..'zero' concern... my wife realized then that the mother had no idea where the kid had run to..so she advised the lady...her reaction was a foul look as if to say 'mind your own business'.. and we thought we were being helpful.

So if that lady has zero control over kids were are 5 and 6...what is going to happen when they turn 18?!?!

[Bullseye]

I would not come down so hard on daycare - it is the only way some working parents are able to sustain the two incomes (or one income in the case of single parents) that most families need now.

'Need', huh? I think you mean 'want', most people want it all, right now, and require two jobs to pay for it all. It's quite possible for most families to live on one income if they choose to and make the sacrifices that might entail.

[stealth]

It's a scary proposition for society as a whole - a shrinking population with increasing age demographics is a recipe for a long term degradation of health services etc etc (unless the working population is going to pay ever increasing taxe rates to fund these things or we continue to supplement that population through immigration) . From an individual point of view - it's your choice what you value and what you want to do with your life. I would not come down so hard on daycare - it is the only way some working parents are able to sustain the two incomes (or one income in the case of single parents) that most families need now.

You're confusing a shrinking BIRTHRATE with a shrinking population.
Canada has this thing called immigration, remember?
The population is growing regardless of lower birthrates.

[slothy@cutey]

I think this guy worked hard, sacrificed a lot (the biggest being the temptation to just stop and join the debt-heavy buy buy buy mentality of the rest of society). So many of my friends are ALWAYS going out to eat for lunch or dinner or drinks. They shop. They go on trips. And then they whine about how they can't make ends meets.. yada yada yada...

You want to know the secret to living with financial security and leap frogging all the schleps out there on the GO trains to work day-in-day-out yet no better than before...

I'll tell you the secret. It worked in my life and it will work for you. Don't just dismiss or immediately get all cynical that it's overly simplistic. It works if you follow this strategy to a tee...

Here goes... 11 words:

"It's not how much you earn... it's how much you save".

Not everyone will save 80% of their take-home... BUT success is on your side if you examine EVERYTHING you spend money on and start to view EVERY purchase with a "save" mentality.

There are some easy guidelines to get this done:

1) No cable, satellite, etc. If you're in major urban areas (GVA, GTA, etc. you can get like 12-15 channels with rabbit ears. A Buck Or Two sells Chateau brand for $2 and the adapter for $1. Reception isn't as bad as you may thing. Best of all... Free TV... In Toronto and area I get: CBC, CTV, TVO, CTS, FOX, ABC (fuzzier), Global, CHCH, CityTV, PBS, French channels, CFMT, OMNI 1 and OMNI 2, etc.)
2) Use dial-up. Ween yourself off of high-speed and you'll save $$$
3) NEVER EAT OUT! What you say? Why should I deprive myself? Well, if you treat #3 as gospel, you'll eventually break that rule here and there... BUT if you permit yourself to eat out once a week or more, human nature is such that you'll find you're not making any headway at all on this one and you'll be back to your old ways. No excuses. My wife and I would make a huge deal out of "treating" ourselves to a pick-up special at Pizza Nova for $8.99 once every 6-8 weeks. And that's it. If you deprive yourself of eating out, you'd be surprised how much you look forward to Pizza Nove Pick Up Special Day. You feel good that you've saved $$$ and still enjoy a splurge. We try to cook at home for the rest of the time.
4) If you're a homeowner paying utility bills, convert your bulbs to low energy light and ALWAYS turn lights, radio, and TV off whenever you're not in a room.
5) If you must shop for essentials and clothes, be creative and follow these subset guidelines...


1 - Always shop for clothes out of season - best delas to be had
2 - Never pay full price for ANYTHING. If it's not on sale, wait for it, or find an equivalent sale item
3 - Always try to shop where you get loyalty points or rewards
4 - CLEARANCE is NOT an excuse to buy something you don't need
5 - Plan your shopping. NEVER leave the store with something you didn't intend on buying
6 - Set a budget for your shopping trip. Be as specific as possible.
7 - If you need a haircut, try and wait it out as long as you hold out... if you need new boots, do the same... delaying you shopping trip will save you $$$


6) Open a PC ACCOUNT (pres choice.). And USE IT for primary banking. If you don't know why, search other threads for the reasons. PC basically prints money for you. No service fees, free account cheques, PC points, and the best feature of all .. FREE usage of any CIBC bank machine. CLOSE your bank accounts.

7) FOLLOW THIS ONE ONLY IF YOU HAVE SELF CONTROL WITH CREDIT CARDS. Phase out your credit cards and replace them with cards that give you extras (ie. PC points, Sears club, Air Miles, etc)... BUt only NO ANNUAL FEE cards. When you DO spend money, you might as well be banking points to redeem for necessary expeneses later. PM me and I'll list the things I've received on points. It'll inspire you.

- If you don't have self control with credit cards. STOP USING THEM. The ONLY purpose of a credit card for 99% of people should be to bank points and pay in lieu of cash. If you can't pay your FULL BALANCE each month, the credit card company owns you. Do everything possible to pay it off IN FULL.

8) Cut your cell phone off. Switch to Pay As You Go (for emergencies keep a card handy.. but don't activate it). If you must have a cellphone. Do the cheapest plan and stick to your allowed minutes.

9) Use RFD for freebies... NOT deals. The deals here are AMAZING. But if you have a fixed income like 99% of us, you'll easily talk yourself into believing you need the new Linksys WIreless G router with Speedbooster for $29.99!... blah blah blah... The freebies section has provided free dishwashing detergents, shampoos, pet food, handbags, safety equipment, cream samples, cleaners, tee shirts, baby formula, etc. Search the freebies and ye shall receive...

10) Stop with the Tim Hortons, Starbucks, muffins, candy bars, vending machine pops, etc. You're throwing your money down a toilet. Do I enjoy the occasional drive-thru Timmy's? You betcha... but I make it last. I recall the last time I had it and make sure it's infrequent. I break the pattern. I break the habit. I enjoy the odd coffee and save a lot of $$$. If it's routine, habit, etc... you're wasting your money and worse... you don't even feel like it's a REAL treat.

11) Save CASH. Get a nice box, jar, or whatever. I have an old high school pencil case that I use for bills and a metal decorative tin for change. I try to add to it at least once a week. When I get to say $100 in bills. I rubber band it and start again. When I hit a milestone number/goal, I use it to pay off essential bills/expenses and start all over again. The trick here is the visual need to see the cash piling up. It doesn't have to be a lot (in most cases it isn't at all), BUT you're not dumping it in your change tray in your car and spending it on coffee. You're counting it up, rolling it up - if it's change, and watching it grow. There is NO better motivator than watching yourself save up your money!

12) The guidelines aren't important. It's the mentality that's key. You can add to my list... take away from my list... disagree with my list... makes no difference. 95% of people reading this will fail here and won't be able to save a dime. They'll continue to eat out, to say life is too short and spend, spend, spend. A lot of my friends are like that... but I'm under 30, own my own large home, and am debt-free. The trade-off... I don't go on grand vacations out of country... I live modestly because I live by the mantra... "It's not how much you make... it's how much you save". I won't humiliate myself by telling you what I make. If any of you reading this following what I already know... you would smoke me in terms of what you could save for yourself.

And you know what... I'm happier. Never underestimate how happy one can feel when they have control over their financial present and future. No vacations to the cayman islands, or a night downtown eating and drinking, or a brand new 52" Plasma, or new clothes will EVER make you feel as good as living debt-free. Newspaper had an article that said people worry more about money than about their children. I can believe it. I know almost no one can have it both ways... but I'll take living modestly for control over my life and finances ANY DAY...

Good luck to you!

[Cyber6]

At that lifestyle (if it can be called a life), no wonder his father died at 52 (as the article mentioned, the father was the guys role model, so assume he worked like crazy too).


Read again...


My dream would be to retire when my father did, at age 52..

[TheDude79]

I think this guy worked hard, sacrificed a lot (the biggest being the temptation to just stop and join the debt-heavy buy buy buy mentality of the rest of society). So many of my friends are ALWAYS going out to eat for lunch or dinner or drinks. They shop. They go on trips. And then they whine about how they can't make ends meets.. yada yada yada...

You want to know the secret to living with financial security and leap frogging all the schleps out there on the GO trains to work day-in-day-out yet no better than before...

I'll tell you the secret. It worked in my life and it will work for you. Don't just dismiss or immediately get all cynical that it's overly simplistic. It works if you follow this strategy to a tee...

Here goes... 11 words:

"It's not how much you earn... it's how much you save".

Not everyone will save 80% of their take-home... BUT success is on your side if you examine EVERYTHING you spend money on and start to view EVERY purchase with a "save" mentality.

I agree with you to a point. It's all about balance.

You don't want to work so much and save so much that you have no enjoyment in life. History is littered with misers who died alone, old, tired, rich, and miserable. Likewise, you don't want to have massive crippling debt such that you can't make ends meet.

There's a balance in everything, and everyone's comfort level is different.

Your values aren't the same as mine. What makes you happy might not make me happy. What we all have to do is think carefully about the consequences of our actions before we take them. That's the key, IMO. If you want to pay down your mortgage in 3 years and have no life while undertaking that endeavour and that makes you happy, then great! If you want to take that mortgage and go all the way out to 30 years so you can take trips, install a pool, have a nice car, etc, because that makes you happy, then great! Just be cognizent of your actions and their present and future consequences.

[st7860]

9) new Linksys WIreless G router with Speedbooster for $29.99!... !

Actually, if you can actually get it for that price with no shipping, the price is good enough to buy and make a small profit on, so you DO need to buy it.

[slothy@cutey]

Agreed. I don't advocate what this guy has done in the article. In my opinion it's far too extreme. The problem with extreme actions (or out-of-balance strategies) is that they are fleeting... too difficult to maintain for long without crashing.

My main point is more general principle. No matter what our value systems are, I've never met or known anyone who didn't wish they had their house payed off, or their credit card debt erased, or extra cash for things they don't have now.. etc. Money (and lack of it) are a HUGE part of our daily lives. We may not want to make the trade-offs (ie. foregoing the vacation to pay off some debt, etc.), but you can't tell me anyone can feel completely at ease as their debtload grows, or as their take-home and expenses net the same thing. What I've offered in my post is "break your habits" solution. Of course it requires sacrifice. But perhaps we should really be looking at how we define "deprived". For instance, I'd love to go to Europe for 3 weeks, but I'd rather save my money for retirement for instance, or more wisely on necessary home improvements, etc. But I still WANT to get away... maybe I'll go to a B&B with my wife for a long weekend to Stratford, Ontario.. take in a play etc. I've cut my "travel/vacation expense" substantially. Do I feel deprived? I could feel that way because Stratford is a poor subsititue for Europe. Or I could look at it as "no vacation at all or relaxing weeking in Stratford?". Laregely, I think it's a matter of perspective. In North America, we seem to view a lot of luxuries as necessities and the lack of as deprivation. It's fine to live that way, but it's hard to have it both ways.

just my 2 cents...



I agree with you to a point. It's all about balance.

You don't want to work so much and save so much that you have no enjoyment in life. History is littered with misers who died alone, old, tired, rich, and miserable. Likewise, you don't want to have massive crippling debt such that you can't make ends meet.

There's a balance in everything, and everyone's comfort level is different.

Your values aren't the same as mine. What makes you happy might not make me happy. What we all have to do is think carefully about the consequences of our actions before we take them. That's the key, IMO. If you want to pay down your mortgage in 3 years and have no life while undertaking that endeavour and that makes you happy, then great! If you want to take that mortgage and go all the way out to 30 years so you can take trips, install a pool, have a nice car, etc, because that makes you happy, then great! Just be cognizent of your actions and their present and future consequences.

[slothy@cutey]

Actually, if you can actually get it for that price with no shipping, the price is good enough to buy and make a small profit on, so you DO need to buy it.


LOL... you're on the right track.. but ONLY if you can definitely sell it for a profit... Remember, stores are filled with unsold inventory that ends up costing them more on the shelf than in customers' hands.

Same goes for buying to resell... You have to put up the cash first, better be damned sure there's a buyer willing to pay your price!

[CSR]

Neither of us made much more than $60,000 a year at any one job

That's a decent job.



The next few years are a bit of a blur. I worked an average of 90 to 100 hours a week, or about 14 hours a day, seven days a week. It wasn't unusual to work 22 hours straight, go home, sleep for two or three hours, get up, shower, and work another 12-hour shift. I once worked 99 days in a row, took two days off, and then worked another 60 days. Meanwhile, Tiffany began supplementing her salary as a teacher by tutoring and giving piano lessons.

Ouch.

[TheDude79]

My main point is more general principle. No matter what our value systems are, I've never met or known anyone who didn't wish they had their house payed off, or their credit card debt erased, or extra cash for things they don't have now.. etc. Money (and lack of it) are a HUGE part of our daily lives.
Of course we all want no debt. We all want that, but sometimes debt is an important stepping stone to get the things we want in life. Where value systems come in is in determining what is your own intrinsic value of something and using that to dictate your actions along the way.


We may not want to make the trade-offs (ie. foregoing the vacation to pay off some debt, etc.), but you can't tell me anyone can feel completely at ease as their debtload grows, or as their take-home and expenses net the same thing. What I've offered in my post is "break your habits" solution. Of course it requires sacrifice. But perhaps we should really be looking at how we define "deprived". For instance, I'd love to go to Europe for 3 weeks, but I'd rather save my money for retirement for instance, or more wisely on necessary home improvements, etc. But I still WANT to get away... maybe I'll go to a B&B with my wife for a long weekend to Stratford, Ontario.. take in a play etc. I've cut my "travel/vacation expense" substantially. Indeed, some people are comfortable with maintaining large debtloads.

Your choice to forgo the trip to Europe is exactly what I'm talking about; you made a value choice. To you, the value of an overseas trip is low compared to saving for retirement or spending on your home. To me, I'm more inclined to spend money on travel at the moment and as such I don't own a home, so I'm minimizing my current housing expenses so I can travel. It's a lifestyle choice, and I know the consequences. Neither travel nor home ownership are essential things, so I made a choice based on my intrinsic values. Your values are not static either, as they change (sometimes quickly) based on your job, your surroundings, your family life, and your age.

You have to be careful not to assume that the things that you think are important are equally important to everyone, because that's usually not the case.

[st7860]

maybe one of the people here experienced in such matters can explain the difference between GOOD DEBT and BAD DEBT to the noobs.

[Chookman]

maybe one of the people here experienced in such matters can explain the difference between GOOD DEBT and BAD DEBT to the noobs.

In my opinion, all debt is bad. Some debt is just worse than other debt. I wouldn't be surprised if someone in the lending business coined the term "good debt".

However, I'm in the same frame of mind as slothy@cutey. I paid off my home in 1065 days. I look at it this way. I withheld a few "wants" for three years in order to get a "bonus" of $150000 in the form of interest payments into my pockets over the next 20 years. Essentually, I can now take a $7500 vacation each year for the next 20 years and break even with the guy next door who never takes a vacation and just makes his monthly mortgage payment.

3 years of living frugal traded for 20 years of increased net worth plus the stress-free living of no debt load and going to work knowing that I don't need to be there is worth it to me.

[Bullseye]

Your choice to forgo the trip to Europe is exactly what I'm talking about; you made a value choice. To you, the value of an overseas trip is low compared to saving for retirement or spending on your home. To me, I'm more inclined to spend money on travel at the moment and as such I don't own a home, so I'm minimizing my current housing expenses so I can travel. It's a lifestyle choice, and I know the consequences. Neither travel nor home ownership are essential things, so I made a choice based on my intrinsic values. Your values are not static either, as they change (sometimes quickly) based on your job, your surroundings, your family life, and your age.

You have to be careful not to assume that the things that you think are important are equally important to everyone, because that's usually not the case.

Totally agree. Between 1999 and 2004, my wife and I travelled extensively, over twenty countries, over three months combined. We spent over $20k on this, and I wouldn't change that for anything, those memories are priceless. That money could have been used to pay down the mortgage or add to our retirement savings, but to us, it was better spent on the vacations.

Sloth does make some great suggestions for savings, though, that people can pick and choose from.

[konfusion666]

good thread... it's interesting to see the differing angles people have to this topic. from the "smart, moderate savers" to the slightly more extreme "save money at all costs", not that there's anything wrong with that.

[slothy@cutey]

Neither travel nor home ownership are essential things, so I made a choice based on my intrinsic values. Your values are not static either, as they change (sometimes quickly) based on your job, your surroundings, your family life, and your age.

You have to be careful not to assume that the things that you think are important are equally important to everyone, because that's usually not the case.

I get the point that we all may value where we spend our money in different ways. Sure travelling around Europe may be more of a "value fulfillment" than buying a home for some, but again I have to stress my point that "financial security" in some form or other is not a value judgment anymore but a collective want/need for nearly everyone. Now I know someone is gonna blast me and say they're perfectly comfortable blowing tonnes of money they don't have, not owning any property, and living life to the fullest dying in debt. But I think you have to look broadly at what "financial security" represents. It's no longer a question of values if you think trip to Europe v.s. mortgage payments on the home. The one scenario is spending money on travel to Europe while it may result in an enriching experience does not provide any financial security or help your financial situation in any signiciant way. Applying that money to a home or a retirement savings presumably can reduce your worries down the road by allowing you to feel more secure financially and closer to financial freedom. So, a few weeks of travelling v.s shaving years off a mortgage? If you're a student and don't really care to own a house, than sure the mortgage example may not be relevant, but you can easily replace mortgage with investments, savings, etc. I guess I'm getting at converting your money into these that keep or appreciate in value (which translates into happiness and peace of mind) or spending/losing your money. While you may gain a wonderful life experience, I would argue you would be happier with financial security. Obviously one trip won't be all that's needed. But you can only carry an example so far. My point is that making the lifestyle choice to show restraint and find a more productive use of your money that provides some net return will make you a happier person in the long run than the person who takes trips, eats out, shops freely, and is saddled with financial struggles as a result.

I think the values questions enters into on what you choose to spend your money on... but I'm stressing the "how you decide to use the money in the first place angle". And if the goal of a human being is to be financially independent and financially stable and secure and not worry about money and debt, than there's only one choice - save your money and stop spending frivolously.

Of course you could argue that there are plently people who don't have a goal to be financially stable and secure. But I highly doubt it. Even in simplistic terms, ask anyone, would you want to win the lottery? And tell me anyone who would say no? So you see it doesn't have to be a house or retirment savings, but it DOES have to be money.

[Krox]

It is an intersting read, however, the math doesn't seem to add up for me.

He claims he was able to save over $80k/year for more than 3 years.

So even if you say he saved $85K x 3 years= $255k

yet he paid off $37K in debt and purchased $302K house and bought to "newer" model cars.

Anyway, regardless I think this is a pretty extreme life choice. Life is sometimes full of unexpected surprises. My parents were looking forward to their retirement until my dad was diagnosed with leukemia. Now their life is forever changed and their dreams of travelling are gone. Fortunately, the year before the diagnosis my parents travled to Australia (my dad had always wanted to go). Had they waited it probably would never have happenned.

To me it's about balance, plan for the future but enjoy the present. Life really is too short.

[konfusion666]

slothy, it sounds like you're pitting one against the other.

isn't it possible to have both?

[slothy@cutey]

That's exactly my point! Congrats on paying off your home. Short term pain for long term gain.

It doesn't have to be a home too. If you're in the mentality and control your financial picture, you can make gains in many other places too... and the best part is that it doesn't matter how much you make... it's how much you save in the end that's all that matters.



However, I'm in the same frame of mind as slothy@cutey. I paid off my home in 1065 days. I look at it this way. I withheld a few "wants" for three years in order to get a "bonus" of $150000 in the form of interest payments into my pockets over the next 20 years. Essentually, I can now take a $7500 vacation each year for the next 20 years and break even with the guy next door who never takes a vacation and just makes his monthly mortgage payment.

3 years of living frugal traded for 20 years of increased net worth plus the stress-free living of no debt load and going to work knowing that I don't need to be there is worth it to me.

[slothy@cutey]

slothy, it sounds like you're pitting one against the other.

isn't it possible to have both?


A valid concern... but I'm not pitting one against the other. I'm merely using my example(s) as ways to see your economic picture flourish in a short amount of time. I don't advocated being extreme like the guy in the article. It's unrealistic for most.. and unnecessary.

My point is that you don't really have to think of "restrain" as "deprivation". If you make some habitual life changes, you can paint a rosier financial picture for yourself in future. The payoff will be the ability to travel and shop frivoulsly later when you're on the "black" side of the ledger rather than the "red".

I think even Oprah did this "debt diet" show which she focused on couples living in la-la-land financially. One family was making like $300k US and still up to their ears in debt. Look at Wacko Jacko or Elton John... you can be a millionaire and still have massive financial pressures and struggles.

So if you CAN have both and still have a good financial pictures, chances are pretty good you're already showing restraint and your careful about your money... but I suspect many people are not...

Average Canadian is something like $4k in debt (not including mortgage)

[rustysilvia]

Average Canadian is something like $4k in debt (not including mortgage)

$4k isnt all that much money.

[slothy@cutey]

Well that's a matter of perspective. Having any debt with no discernable savings is bad news. $4k in credit card debt (as is probably the case for the "average Canadian") can be very difficult to get out of when you don't save anything paycheque to paycheque.

Consider 10-15 years ago, the average Canadian had +$8-10k in savings. That makes the trend look pretty scary.



$4k isnt all that much money.

[Gee]

Work to live....not live to work.

My sentiments exactly.

I applaud his accomplishment, but I don't envy him.

Life is too short, it can end at any time, and you can't take it with you.

I hope he takes the time to stop and smell the roses.

But from my experience, people like him do not know how to live life. They are too concern about saving that penny.

[TheDude79]

The one scenario is spending money on travel to Europe while it may result in an enriching experience does not provide any financial security or help your financial situation in any signiciant way. Applying that money to a home or a retirement savings presumably can reduce your worries down the road by allowing you to feel more secure financially and closer to financial freedom. So, a few weeks of travelling v.s shaving years off a mortgage? If you're a student and don't really care to own a house, than sure the mortgage example may not be relevant, but you can easily replace mortgage with investments, savings, etc.
...
My point is that making the lifestyle choice to show restraint and find a more productive use of your money that provides some net return will make you a happier person in the long run than the person who takes trips, eats out, shops freely, and is saddled with financial struggles as a result.
You continue, I think without realizing it, to make my point for me. Obviously you value saving money and investing in appreciating assets more than anything else. That's great, and it makes you happy as obviously your financial security is very important to you. Many people do not value financial security, as you call it, as much as you do. What you are doing is painting everyone with the same brush, your own brush. Just like there are unhappy people saddled with huge debt because they are perpetual spenders, there are people who are 'financially secure' who are totally unhappy also. Financial security doesn't equal happiness, and it's definitely not all about net return.

Like I said before, I agree with you up to a point; fiscal responsibility is important, but how important depends on the individual. I'll go back to what I wrote before, it's all about personal balance. You wrote that:

I guess I'm getting at converting your money into these that keep or appreciate in value (which translates into happiness and peace of mind) or spending/losing your money. While you may gain a wonderful life experience, I would argue you would be happier with financial security. So if I take a 3 month, $5,000 trip to Europe where I had the time of my life, met so many new people and friends and learned things that I never ever could have learned here that I would have been happier putting that $5000 + the $10k I would have earned working into a mutual fund? Wow it would be great to look at my RRSP statement now and see that I have $20k more in the bank, but I wouldn't ever ever trade that experience in for anything. It's not clear cut that more net worth equals a better life. I'm glad that that mindset works for you and you're happy.

Just to give some perspective, I'm an under 30 professional who has savings for a decent property, but I choose not to spend it right now because I don't want the lifestyle of a homeowner yet. Sure, it might be somewhat detrimental to my net worth, but I enjoy the life I'm living and that is worth some cost to me. I enjoy travelling and doing things with my friends and family that cost money, and that's okay. I have 0 debt, but I don't blindly plow all of my money into savings, as I want to be able to remember my youth when (or if) I get old as that enjoyable part of my life before my health turned on me and all the net worth around couldn't fix that.

I guess what you have to ask yourself would be 'if I died today or I lived to be 100, would I have major regrets about what I'm doing now?'. If the answer for you is yes, then you need to change what you're doing. If it's no, then you're doing okay.

[CompWizrd]

i can't wait to pay off my mortgage!

...so who do i contact at RBC to make 20% annual prepayments? i can't see that as being negotiable.
Mine lets me do that.. they wouldn't let me have larger payments, but i can pay 20% down a year and increase the payments by 25% every year.. though i didn't do that..

my mortgage was originally a 12 year amort(fastest they would let me have), and 5 year term.. it'll be paid off in under 4 years, and that was after i had put down a 26% down payment. it's not too difficult, it helps that my money pit of a car has decided to only cost about 2k a year in repairs instead of its normal 3-4.

[Chookman]

One thing I don't quite agree with is with so many people playing the "what if" game. These must be all of the people buying FS/BB PSPs ;). Statistics show that the average canadian lifespan is approximately 80 years and rising and most are somewhat healthy at least until age 65 if not longer. If you simply go by the mathematics, the odds are in your favour that you'll be in good health later in life.

Often many financial people mention that for every dollar invested in your 20s, you'd have to invest 3 dollars in your 50s to equal the amount at the end.

For those of you who subscribe to the idea of living it up while young and having no regrets later on, consider this. If you could meet the number of people I've known at work who can't afford to retire and basically spend their lives working until death and constantly complain that they can't retire because of their mortgage/kids university etc. you might think differently.

You think the old 9 to 5 is hard in your 20s? Try doing it at 62 after having done it for 35-40 years. Try doing it knowing you have to do it to sustain your spending habits that you've cultivated for the last 40 years and if you want to retire, you'll have to downsize to a small apartment or home and live well below your current lifestyle.

If the basic rule is that for every debt cleared early, you get double-triple that in returns later in life and earlier in life, it may make sense to some people to work hard when young and able and play harder and more often when older and not interested in being a slave to the job.

I had a model set forth by my parents so I probably have been trained to do similar. From age 22-30, they worked a 9-5 job, went to night school 3 nights a week and once on Saturdays in order to better their salaries. By age 35, they owned their home. After that, they never had to deny themselves anything they wished. Today, they are in their early 60s, have been retired since age 52, and fly off to a varying vacation destinations 2-4 times a year.
Their cars are nice but not amazing - 2-5 years old and $30K-45K when bought new.

I agree that it's not a good idea to kill yourself for money but the more fiscal restraint you show early, the larger the benefits you'll experience later on. The questions we all have to ask ourselves is what opportunity cost can we accept and do we at least have an idea of where we want to be later in life and how much will it cost to get there?

[mart242]

We had almost paid off my mortgage until... we had a kid. Now, with the cost of daycare (1100$ a month) and the need for a new house, plus another kid on the horizon (so more daycare $), everything has changed.

We still managed to save quite a bit in the last 18 months to give a downpayment on the new house and put money aside for appliance, moving costs, blinds and all that. If all that money would be put on the current mortgage of my townhouse, we'd be with left with something like 5,000$ left on an original mortgage of 120,000$ 5 years ago. I guess that we did pretty good (got married, finished basement, fence, deck, kids stuff, 1 year of daycare, ...).

Now, we'll be back to a ~180 - 190k mortgage on a ~370k house in 8 months. :( :|

edit: We haven't traveled much in the last 5 years, beside getting married in jamaica. We don't eat out much or spend much $ going out. We've spend quite a bit on nice furniture, appliances and things like that though, but not on clothing. Heck, we get dressed at Costco. :lol:

[monomono]

Between 1999 and 2004, my wife and I travelled extensively, over twenty countries, over three months combined. We spent over $20k on this.

$1k per country? That's a deal ;)

[st7860]

maybe he had the cathay pacific all asia pass

[Bullseye]

maybe he had the cathay pacific all asia pass

No, it was four different trips.

[Bullseye]

Mart242 - you sound fairly financially secure, even with the bigger mortgage, so I have to ask...why put your kid(s) in daycare? Sounds you could afford to have one parent stay home.

[mart242]

Mart242 - you sound fairly financially secure, even with the bigger mortgage, so I have to ask...why put your kid(s) in daycare? Sounds you could afford to have one parent stay home.

Simple.
1st: I work in high tech in Ottawa and that sector couldn't be more unstable so a 2nd income is great in case of lay offs or period without jobs. I've been lucky so far and collected only 100$ of EI in the last 5 years (due to vacations that I had accumulated and were paid off, or small severance pay) but who knows what will happen. My wife's job, even though it pays only 50% of mine helped reduce stress and pay for the cool stuff. I also have no pension plan, RRSPs only so someone has to put money in there.

2nd: My wife is in telecom / high tech as well (technologist level). If she stops working for a few years, she'll never be able to get such a job back. She'd have to be a cashier at walmart or go back to school which she doesn't want to. She's not focused on her career at all but reality is she needs an income.

3rd: For my son (and other kid down the road): We have found a great day care. The amount of stuf he learns there is incredible. He is way more advanced than the other kids on my street that are with their stay at home mom or go to a home day care. We stimulate him at home a lot and he barely watches any tv, but the day care plays a big role too. My wife and I are originally from Montreal and would send him to daycare a few days a week anyways so that he learns to speak english without a french accent. Hell, my wife lost her job recently and her biggest worry was to have to pull him off the daycare because he'd miss all the cool stuff he does with his friends there! The amount of stuff he learns is unbelievable and he really enjoys it. In our case, we feel that it's the best choice. Mind you, he's there only between 8:30 and 16:45 every day. The day care is close to my office, which is ~5 minutes from home. I'd never drop him off at 7am and pick him up at 6pm like some parents do at some daycare (not at this one, it's 10 hours per day max).


I'm all for day care, as long as it's a good one that you trust and that you don't abuse it (ie: 10 hours a day at the daycare!). My wife spend a few days at the park with my son (after laid off) and was saying how the stay at home mom were bitching and talking together about how "selfish" the working mom were and how it's cruel to send a kid to day care.. well guess what missy, who's kid cries when you say know, doesn't share toys, barely talks and runs away when a kid approaches him? Not mine! (they are not all like this mind you..)

Oops. sorry for the long reply! I guess that the answer is not so simple after all! :lol:

[Bullseye]

Interesting take on daycare (even though I disagree), thanks for the detailed reply. I was just curious, as it would never occur to me to put my son in daycare unless I absolutely had to. Obviously you feel different.

[mart242]

Interesting take on daycare (even though I disagree), thanks for the detailed reply. I was just curious, as it would never occur to me to put my son in daycare unless I absolutely had to. Obviously you feel different.

We've got friends whos daughter goes to a home day care. The mom (our friend) asked questions like "what activities will the kids be doing today", "what did they eat", and other general questions that parents SHOULD ask. Well, the day care owner kicked her kid out of the daycare because she was asking too many questions. With a day care experience like that, yeah, I'd think of keeping my kids at home instead! I'd be too worried.


Out of curiosity, do you have a stable job? If I was pulling 100k in a super steady job (govt or something like that), things might be different. He'd be in daycare only part time.

[Bullseye]

There's definitely good daycares and bad daycares, for sure.

I actually run my own business, but it's only part time, I am a part time stay at home dad as well (boy is napping right now as I type). My wife is home with him when I'm not. It works out very well for us, but we realize we are fortunate to both have work in fields where the arrangement can be made very flexible (accounting and nursing). Another baby is on the way, so we'll be working even less then. Unless it's twins (which is a quite possible, we'll find out Monday), then we may have to keep working the same, as we'll need to buy a minivan!

[slothy@cutey]

Hey Dude,

Okay, I think we're reaching the part where we start to repeat ourselves. I think you make valid points... but I'm still sensing you're not getting what I'm saying. You can't carry my example of going to Europe vs. investing money as an isolated road to financial freedom and happiness. Obviously, if you went to Europe, fell in love, got happily married, than you could easily argue that winning the lottery isn't important to you any more if you hadn't gone and blew that money on that trip. Granted. But what I'm saying is look at the bigger picture. EVERYONE wants to feel like they have money and the security that comes with the feeling that have some form (listen carefully) ANY form of financial security/stability. This isn't a matter of perspective, value, perception, choice, etc. Afterall, you can't go to Europe if you don't have money. Maybe not everyone aspires to be a millionaire... but ask ANYONE if they like the feeling of being worried because they have no money and you'll see just what a consensus there is for what I term financial stability/security.

You choose how you spend it ... yes.. those are value judgments, but the basic need is innate. Money is the vehicle to happiness. It isn't happiness itself (well for some I guess it is.. but that's not what I'm referring to). If you fall in love with a girl and get married, does money play a factor? Well even if you both like to live like starving artists, no problem, but you gotta eat? You gotta have clothes? You gotta have shelter? It's money that will get you there. If you don't have the money, you starve, you're homeless, you're naked! I mean don't tell me financial security isn't a value for everyone here. You MUST look at the broader picture in terms of a lifetime. If my point is lost on you, read "Chookman's" post right below yours. I think he makes the point even better that I have.

It's been a spirited discussion. I respect your arguments. In some ways I think we are on the same page, but in others we seem to diverge quite a bit...



You continue, I think without realizing it, to make my point for me. Obviously you value saving money and investing in appreciating assets more than anything else. That's great, and it makes you happy as obviously your financial security is very important to you. Many people do not value financial security, as you call it, as much as you do. What you are doing is painting everyone with the same brush, your own brush. Just like there are unhappy people saddled with huge debt because they are perpetual spenders, there are people who are 'financially secure' who are totally unhappy also. Financial security doesn't equal happiness, and it's definitely not all about net return.

Like I said before, I agree with you up to a point; fiscal responsibility is important, but how important depends on the individual. I'll go back to what I wrote before, it's all about personal balance. You wrote that:
So if I take a 3 month, $5,000 trip to Europe where I had the time of my life, met so many new people and friends and learned things that I never ever could have learned here that I would have been happier putting that $5000 + the $10k I would have earned working into a mutual fund? Wow it would be great to look at my RRSP statement now and see that I have $20k more in the bank, but I wouldn't ever ever trade that experience in for anything. It's not clear cut that more net worth equals a better life. I'm glad that that mindset works for you and you're happy.

Just to give some perspective, I'm an under 30 professional who has savings for a decent property, but I choose not to spend it right now because I don't want the lifestyle of a homeowner yet. Sure, it might be somewhat detrimental to my net worth, but I enjoy the life I'm living and that is worth some cost to me. I enjoy travelling and doing things with my friends and family that cost money, and that's okay. I have 0 debt, but I don't blindly plow all of my money into savings, as I want to be able to remember my youth when (or if) I get old as that enjoyable part of my life before my health turned on me and all the net worth around couldn't fix that.

I guess what you have to ask yourself would be 'if I died today or I lived to be 100, would I have major regrets about what I'm doing now?'. If the answer for you is yes, then you need to change what you're doing. If it's no, then you're doing okay.

[st7860]

then we may have to keep working the same, as we'll need to buy a minivan!

The honda odessey has one of the best milages among minivans but it pales in comparison to a 7 passenger toyota hybrid highlander. similar price too(about $45,000)

[Bullseye]

Slothy - I think the point is that it isn't black and white, there is a middle ground. To me, you're too far to the 'saving' end, others I know are too far on the 'spend now' side. I prefer to take the middle route, enjoy some of my money now, and save some of it for later. Sure, I'd prefer total financial security earlier rather than later, but if the cost of that means I can't do lots of enjoyable things now, then it isn't worth it to me.

I think I save a reasonable amount for future, I will never be rich, but I also don't think that forgoing most of my pleasures now will bring me more happiness later, which seems to be the point you are making.

I think if I'd have not taken those trips and used the money more 'wisely', in a financial sense, I would be forever feeling like I'd missed out on doing something really fun, at a time of your life than you can never get back.

[Bullseye]

The honda odessey has one of the best milages among minivans but it pales in comparison to a 7 passenger toyota hybrid highlander. similar price too(about $45,000)

The Highlander has a hard-to-get-to bench, though, no good for babies in car seats. I've looked at it.

Sienna would be my top choice, and it won't be new, either, probably buy something five years old or so. New would mean one of us returning to full time work to pay for it!

Odessey is nice, but used ones go for a fair bit more than Sienna's of comparable level, and the Sienna is as good or better in reliability, most likely.

[manixc]

I worked an average of 90 to 100 hours a week, or about 14 hours a day, seven days a week. It wasn't unusual to work 22 hours straight, go home, sleep for two or three hours, get up, shower, and work another 12-hour shift. I once worked 99 days in a row, took two days off, and then worked another 60 days.


stop reading after this.

[TheDude79]

Slothy - I think the point is that it isn't black and white, there is a middle ground. To me, you're too far to the 'saving' end, others I know are too far on the 'spend now' side. I prefer to take the middle route, enjoy some of my money now, and save some of it for later. Sure, I'd prefer total financial security earlier rather than later, but if the cost of that means I can't do lots of enjoyable things now, then it isn't worth it to me.

I think I save a reasonable amount for future, I will never be rich, but I also don't think that forgoing most of my pleasures now will bring me more happiness later, which seems to be the point you are making.

I think if I'd have not taken those trips and used the money more 'wisely', in a financial sense, I would be forever feeling like I'd missed out on doing something really fun, at a time of your life than you can never get back.
Couldn't have said that better myself. Thanks Bullseye.

Slothy, I understand your point, but I don't totally agree with it. Not everyone worries about money in the same manner you do, and not everyone wants to wait until they're 50 to start enjoying life to the fullest. I'll say it again, it's all about the balance that works for the individual/family, and everyone is different in that respect.

To counter Chookman's example, my parents both turned 60 this year, my dad just retired and my mom continues to work because she wants to, not for financial necessity. They didn't save like misers, we took trips and did fun things all the time that cost money when I was young. They own 3 properties outright and are totally debt free with good retirement funds set up, and as such they are 'financially secure'. My mom stayed at home with the kids until we were about 9 years old, and my dad made a decent (but not fantastic) salary during his career. There's more than one way to skin the 'financial security' cat. :lol:

[slothy@cutey]

I think I save a reasonable amount for future, I will never be rich, but I also don't think that forgoing most of my pleasures now will bring me more happiness later, which seems to be the point you are making.


That's precisely the point I'm making. Read Chookman's post on this page or the previous.

I'm not too much on the "save" side as you suggest. I have to deal with the reality of my income. I enjoy little indulgences here and there but they are within a reasonable means. Saving money doesn't make me as happy as knowing that I'm feeling financially secure that building for my future. I don't want to die with thousands and thousands of dollars surplus or debt. But I don't want to spend my 40's, 50, 60's, and beyond worried and living paycheque to paycheque. All worldly travels won't mean much to anyone if their in economic trouble at the mid-later stages in life.

Having a home paid off was a huge load off our backs. Now my wife and I can do a few more things we couldn't do before with the comfort of knowing we have a $600k valued home paid off. But we're also aware that building for the future never stops... so you have to keep showing restraint (not deprivation), just restraint... I still stand behind that philospohy.

I guess if I get hit by a bus tomorrow, than you and TheDude would be right, but I'm banking on the probability that I may likely be around well into my 60's 70's... At least now I'll have a house to cash out on if need be...

[slothy@cutey]

We agree, agree more, than disagree.. :cheesygri

Congrats to your parent on making the balance work. They've accomplished a lot and now in their golden age have a lot to show for it.

With respect to my argument, I'm not advocating extreme measures. But I do think what your parents achieved is substantially more difficult than you make it sound. For the majority who are living their youth in this generation, it will be extrememly difficult to tread the balance successfully. I would favour more restraint as more "insurance" further down the road. But for those who don't, the risk is greater that they will not achieve the successful lifestyle balance and financial security your parents have. I hope I'm wrong.. well no actually... I hope I'm right.. since I'm workin' hard trying to save my $$$... :cheesygri :cheesygri

Good discussion all the same...


Couldn't have said that better myself. Thanks Bullseye.

Slothy, I understand your point, but I don't totally agree with it. Not everyone worries about money in the same manner you do, and not everyone wants to wait until they're 50 to start enjoying life to the fullest. I'll say it again, it's all about the balance that works for the individual/family, and everyone is different in that respect.

To counter Chookman's example, my parents both turned 60 this year, my dad just retired and my mom continues to work because she wants to, not for financial necessity. They didn't save like misers, we took trips and did fun things all the time that cost money when I was young. They own 3 properties outright and are totally debt free with good retirement funds set up, and as such they are 'financially secure'. My mom stayed at home with the kids until we were about 9 years old, and my dad made a decent (but not fantastic) salary during his career. There's more than one way to skin the 'financial security' cat. :lol:

[Chookman]

Here's an interesting article that talks about some of the things discussed here.

http://www.macleans.ca/topstories/finance/article.jsp?content=20060213_121482_121482

[Asun]

Why didn't he put his after-tax savings into the market? It'll certainly beat the mortgage rate in the year 2002-2005, even considering the tax on the capital gain. The equity in the house will continue to build since house price is going up regardless.

[Chookman]

Why didn't he put his after-tax savings into the market? It'll certainly beat the mortgage rate in the year 2002-2005, even considering the tax on the capital gain. The equity in the house will continue to build since house price is going up regardless.

Hindsight is 20-20. No one knew for sure what the market would do. I could say the exact opposite for someone who did the same thing from 1999-2002 and questioned why he'd invest in a sinking market when real estate was beginning to rise.

[st7860]

. No one knew for sure what the market would do..

*cough* lets see there's a guy who's corporations share's go for about $85,000EACH on the stock market. *cough* . he's pretty good in his predictions.

[grant]

*cough* lets see there's a guy who's corporations share's go for about $85,000EACH on the stock market. *cough* . he's pretty good in his predictions.
If you are talking about Warren Buffet, he's made most of his fortune buying depressed/undervalued companies and improving them. He did NOT make his fortune by just sitting back in his chair buying stocks he hoped would rise on their own.

Saying he's "pretty good in his predictions" is like saying a farmer is lucky that his corn grows tall after he's spent a season plowing, planting, and watering it.

[YauYin]

well said and well done!


In my opinion, all debt is bad. Some debt is just worse than other debt. I wouldn't be surprised if someone in the lending business coined the term "good debt".

However, I'm in the same frame of mind as slothy@cutey. I paid off my home in 1065 days. I look at it this way. I withheld a few "wants" for three years in order to get a "bonus" of $150000 in the form of interest payments into my pockets over the next 20 years. Essentually, I can now take a $7500 vacation each year for the next 20 years and break even with the guy next door who never takes a vacation and just makes his monthly mortgage payment.

3 years of living frugal traded for 20 years of increased net worth plus the stress-free living of no debt load and going to work knowing that I don't need to be there is worth it to me.

[BlueMax]

Need to earn more money in order to save it. :(

If/when a better-paying job is landed in the future, I'll be doing myself the favour of paying off debt as fast as possible, as well as purchasing land/home as soon as possible - renting is like throwing money away and I HATE it! :mad:

I hate living hand-to-mouth, but I've got the debt of education to pay for - in a field I cannot get into. (IT/networking - classification is now too old and I still don't have experience 5+ years later - I'd say that $15,000 student loan was largely a waste.) It'll be a beautiful, beautiful day when I'm finally debt free! I don't consider a mortgage so much of a "debt" because you have to pay for a home one way or the other - but paying for a lesser-expensive modest home and getting it paid off sooner is just the smart thing to do.

I can't believe people with $100k+ jobs who waste it all on Hummers and million-dollar-houses they can't afford. Sheesh... live sensibly and retire early! Have the money to follow your dreams! I hate showoffs.... even if they ARE stupidly digging themselves into a hole. :mad:

[BlueMax]

The honda odessey has one of the best milages among minivans but it pales in comparison to a 7 passenger toyota hybrid highlander. similar price too(about $45,000)

In a thread about frugality you mention a $45,000 van as a "good deal"?? Sheesh.... family vehicles can be easily had brand new from a half or a third of that! If you spend a tad more in gas, it'll still be vastly less money than the cost of the vehicle itself!

[weedb0y]

I wonder if he has any friends/family left with 100hr work weeks?

Having no social life with friends and family including wife can have serious impact later on in life. But none the less, good tips on saving money early to enjoy life later.

[st7860]

In a thread about frugality you mention a $45,000 van as a "good deal"?? Sheesh.... family vehicles can be easily had brand new from a half or a third of that! !

the 7 passenger hybrid higherland with 4x4 costs around the same as a similar toyota or honda SUV or mini van, about $45,000 to $50,000, ALL of which use a lot more gas than the hybrid highlander.

a Dodge Caravan , starts at around $30,000, so its cheaper, but eats MORE THAN A LOT more gas.

[Chookman]

*cough* lets see there's a guy who's corporations share's go for about $85,000EACH on the stock market. *cough* . he's pretty good in his predictions.


Ok, point well taken. I guess I shouldn't have used "no one" just to be sure someone wouldn't jump out of the woodwork and take it literally. Maybe I should have said "the average investor".

After having watched the movie Wall Street, sometimes I wonder if these big guys have the power to move the market just by dropping a hint, pumping up a stock and watching others chase their tails after them. All the while, they have an alternate plan and make a killing off it.

[Tesla]

ok well I'm only 20 turning 21 in sept. Myself and my gf(I'm gonna ask her to marry me) are planning on doing somthing like that. First of all if you think we are crazy well we rather kill ourselfs working in the short run and enjoy the rewards in the long run this vise visa. Also I have been working straight out of high school. Yes I am getting a trade and yes I'm doing my college part time and my work is paying for my college. I drive a Tercel no need for anything else. My gf how ever drive a 2005 Coolora(sp?) that she gets very cheap for working for toyota part time during her school year and full time summer. We have had trips been to a few different places. I still however save 90% if my money. I also network extrememly well so I can get cheaper vactions, cheaper services whatever. Her and I are both Health freaks and both work out at least once a day. We are gonna buy a house and pay it off rather quicky then when shes done school she has 5 years left shes going for a Surgen. We will reward ourselfs with all the long term benefits when our friends are up to there heads in debts. So far I am debtfree and with some investments and side projects of mine I've aqquired quite a nice sum of money which I can use whatever. But ya you have to think what would u rather have 4 years of slavely for the rest of ur life of freedom or 40 years of salvery for 4 years of freedom? yes I know this is a rather long ramble with no real point

[BlueMax]

the 7 passenger hybrid higherland with 4x4 costs around the same as a similar toyota or honda SUV or mini van, about $45,000 to $50,000, ALL of which use a lot more gas than the hybrid highlander.

a Dodge Caravan , starts at around $30,000, so its cheaper, but eats MORE THAN A LOT more gas.

I'm not a car guy so I don't know the specs and mileage of everything out there right now. I'd have to do some comparisons.... I'd only consider such a large vehicle if I had double the kids I do now. (A distinct possibility.) ;)

One thing's for sure.... unless you have more than 2 kids, a 7-passenger vehicle is very likely overkill and a big waste of money when you can get a nice station wagon for well under $20k.

[st7860]

I'm not a car guy so I don't know the specs and mileage of everything out there right now. I'd have to do some comparisons.... I'd only consider such a large vehicle if I had double the kids I do now. (A distinct possibility.) ;)

One thing's for sure.... unless you have more than 2 kids, a 7-passenger vehicle is very likely overkill and a big waste of money when you can get a nice station wagon for well under $20k.

i'm not a car guy either. and I only mentioned the 7 passenger thingy because someone (Not you, the other one) would probably complain that a 5 passenger vehicle isn't large enough.

then, the toyota prius at $32,000 is a good car. it is bigger than a corolla, nearly as big as a camry. or save about $7,000 if you get it from the USA

[BlueMax]

ok well I'm only 20 turning 21 in sept. Myself and my gf(I'm gonna ask her to marry me) are planning on doing somthing like that. First of all if you think we are crazy well we rather kill ourselfs working in the short run and enjoy the rewards in the long run this vise visa. Also I have been working straight out of high school. Yes I am getting a trade and yes I'm doing my college part time and my work is paying for my college. I drive a Tercel no need for anything else. My gf how ever drive a 2005 Coolora(sp?) that she gets very cheap for working for toyota part time during her school year and full time summer. We have had trips been to a few different places. I still however save 90% if my money. I also network extrememly well so I can get cheaper vactions, cheaper services whatever. Her and I are both Health freaks and both work out at least once a day. We are gonna buy a house and pay it off rather quicky then when shes done school she has 5 years left shes going for a Surgen. We will reward ourselfs with all the long term benefits when our friends are up to there heads in debts. So far I am debtfree and with some investments and side projects of mine I've aqquired quite a nice sum of money which I can use whatever. But ya you have to think what would u rather have 4 years of slavely for the rest of ur life of freedom or 40 years of salvery for 4 years of freedom? yes I know this is a rather long ramble with no real point

You'll be happy to know that many successful people have had the same level of spelling and grammar as you. ;) HOW? I haven't a clue.... but they did it.

[coolspot]

then, the toyota prius at $32,000 is a good car. it is bigger than a corolla, nearly as big as a camry. or save about $7,000 if you get it from the USA

Check ou the Toyota Yaris too - its HUGE inside. It's "girlie" car but for <25K for the RS model - it's a great buy.

[st7860]

Check ou the Toyota Yaris too - its HUGE inside. It's "girlie" car but for <25K for the RS model - it's a great buy.

yes! and the crash performance is good too

http://www.youtube.com/watch?v=8EQRc6yXDxM

[vm_fan]

If you are talking about Warren Buffet, he's made most of his fortune buying depressed/undervalued companies and improving them. He did NOT make his fortune by just sitting back in his chair buying stocks he hoped would rise on their own.

Saying he's "pretty good in his predictions" is like saying a farmer is lucky that his corn grows tall after he's spent a season plowing, planting, and watering it.

I thought he made most of his fortune from the royalties for Margaritaville. :lol:

[Frankie3s]

Yeah, being in a coma for three years will do that to ya. I save $2,500 a month so I never have to see this place ever again.

I agree, living at home can be hell sometimes and it was a releif to leave. Interesting enough, you get treated better by your parents when you don't live with them. They actually want you to stay when you visit!

If all else fails, you could try contacting the Menendez brothers....

[Hubster]

I thought he made most of his fortune from the royalties for Margaritaville. :lol:

:D :D :D :D

How it got there I haven't a clue! :confused:

[st7860]

I thought he made most of his fortune from the royalties for Margaritaville. :lol:

http://en.wikipedia.org/wiki/Warren_Buffett
Warren Edward Buffett (born August 30, 1930) is an American stock investor, businessman and philanthropist. Nicknamed the "Oracle of Omaha" or the "Sage of Omaha", Buffett has amassed an enormous fortune from astute investments, particularly through his company Berkshire Hathaway, in which he holds a greater than 38% stake. With an estimated current net worth of around US$42 billion[2], he is ranked by Forbes as the second-richest person in the world, behind only Microsoft chairman Bill Gates. In June 2006, he made the commitment to give away 85% of his fortune, most of which would be going to the Bill and Melinda Gates Foundation.[3] Buffett's donation was the largest act of charitable giving in United States history.[4]

Despite his immense wealth, Buffett is famous for his unpretentious and frugal lifestyle. He continues to live in the same house in Omaha he bought in 1958 for $31,500,[5] although he also owns a summer house in Laguna Beach, California. His annual salary from Berkshire Hathaway of $100,000[1] is small by the standards of senior executive remuneration in the United States.[6]

[Tesla]

yes I realize my spelling and grammer are very poor. I excelled in the math and Technology departments and english and all that has always been my weak point . I could make fun of you but that would be pointless and not sinking down to your level

[TrevorK]

I don't see why this isn't possible and why some see it as outrageous, especially for dual income earners.

I have only 40K left on my mortgage, and I've had my house for 1.5 years. That's with only having my income (Two jobs). My plan is to have it paid off in 3 years, but I think I'll come in under that figure by 6 months or so. I still eat out 3-5 times / week and buy useless stuff (Like that wetsaw I still haven't used) all the time.


Once this is done, I'll be 25 and ready to start spending the money I put towards my mortgage on having more fun than I do now. Then count in the money my GF (Which will end up being my wife) will make when she's done school in a year, and we'll be able to do pretty much whatever we want in terms of trips, toys and cars.

[mart242]

Once this is done, I'll be 25 and ready to start spending the money I put towards my mortgage on having more fun than I do now. Then count in the money my GF (Which will end up being my wife) will make when she's done school in a year, and we'll be able to do pretty much whatever we want in terms of trips, toys and cars.

Then you'll have kids, will buy a bigger house and have to start everything over. ;)

[rc51]

I don't see why this isn't possible and why some see it as outrageous, especially for dual income earners.

I have only 40K left on my mortgage, and I've had my house for 1.5 years. That's with only having my income (Two jobs). My plan is to have it paid off in 3 years, but I think I'll come in under that figure by 6 months or so. I still eat out 3-5 times / week and buy useless stuff (Like that wetsaw I still haven't used) all the time.


Once this is done, I'll be 25 and ready to start spending the money I put towards my mortgage on having more fun than I do now. Then count in the money my GF (Which will end up being my wife) will make when she's done school in a year, and we'll be able to do pretty much whatever we want in terms of trips, toys and cars.

A couple things will/can change this...work, moving to a different city or country, kids and school. Heck I think my wife has spent more on post secondary education than some people spend on a home. Her latest is an $80,000 EMBA, thankfully her company is covering that..and she still wants to do Law after that.

It all boils down to what you want..I was going on that track, wanted to get into a home by 21 or so..we had 2 solid incomes..not great, but solid as in stable, and thought we'd be mortgage free by late 20's....but divorce changed that. My 2nd wife was more interseted in investing in her education in her 20's and now 30's...she was wise..I think her education will pay off pay far more than paying of a house early..and not so much in just saving money ..but more so in life experiences and exposure. Actually its paying off already...

[TrevorK]

It all boils down to what you want..I was going on that track, wanted to get into a home by 21 or so..we had 2 solid incomes..not great, but solid as in stable, and thought we'd be mortgage free by late 20's....but divorce changed that.

That's why I plan to have the house paid off before marraige, as it will then be considered mine completely (As it would be something I brought into the marraige, not something that was acquired during). Too many horror stories about people losing their homes...

[konfusion666]

That's why I plan to have the house paid off before marraige, as it will then be considered mine completely (As it would be something I brought into the marraige, not something that was acquired during). Too many horror stories about people losing their homes...

Ha, covering your ass eh?

Well... I'd probably do the same.

[EchoAngel911]

at some point, people just start calling you cheap



I think this guy worked hard, sacrificed a lot (the biggest being the temptation to just stop and join the debt-heavy buy buy buy mentality of the rest of society). So many of my friends are ALWAYS going out to eat for lunch or dinner or drinks. They shop. They go on trips. And then they whine about how they can't make ends meets.. yada yada yada...

You want to know the secret to living with financial security and leap frogging all the schleps out there on the GO trains to work day-in-day-out yet no better than before...

I'll tell you the secret. It worked in my life and it will work for you. Don't just dismiss or immediately get all cynical that it's overly simplistic. It works if you follow this strategy to a tee...

Here goes... 11 words:

"It's not how much you earn... it's how much you save".

Not everyone will save 80% of their take-home... BUT success is on your side if you examine EVERYTHING you spend money on and start to view EVERY purchase with a "save" mentality.

There are some easy guidelines to get this done:

1) No cable, satellite, etc. If you're in major urban areas (GVA, GTA, etc. you can get like 12-15 channels with rabbit ears. A Buck Or Two sells Chateau brand for $2 and the adapter for $1. Reception isn't as bad as you may thing. Best of all... Free TV... In Toronto and area I get: CBC, CTV, TVO, CTS, FOX, ABC (fuzzier), Global, CHCH, CityTV, PBS, French channels, CFMT, OMNI 1 and OMNI 2, etc.)
2) Use dial-up. Ween yourself off of high-speed and you'll save $$$
3) NEVER EAT OUT! What you say? Why should I deprive myself? Well, if you treat #3 as gospel, you'll eventually break that rule here and there... BUT if you permit yourself to eat out once a week or more, human nature is such that you'll find you're not making any headway at all on this one and you'll be back to your old ways. No excuses. My wife and I would make a huge deal out of "treating" ourselves to a pick-up special at Pizza Nova for $8.99 once every 6-8 weeks. And that's it. If you deprive yourself of eating out, you'd be surprised how much you look forward to Pizza Nove Pick Up Special Day. You feel good that you've saved $$$ and still enjoy a splurge. We try to cook at home for the rest of the time.
4) If you're a homeowner paying utility bills, convert your bulbs to low energy light and ALWAYS turn lights, radio, and TV off whenever you're not in a room.
5) If you must shop for essentials and clothes, be creative and follow these subset guidelines...


1 - Always shop for clothes out of season - best delas to be had
2 - Never pay full price for ANYTHING. If it's not on sale, wait for it, or find an equivalent sale item
3 - Always try to shop where you get loyalty points or rewards
4 - CLEARANCE is NOT an excuse to buy something you don't need
5 - Plan your shopping. NEVER leave the store with something you didn't intend on buying
6 - Set a budget for your shopping trip. Be as specific as possible.
7 - If you need a haircut, try and wait it out as long as you hold out... if you need new boots, do the same... delaying you shopping trip will save you $$$


6) Open a PC ACCOUNT (pres choice.). And USE IT for primary banking. If you don't know why, search other threads for the reasons. PC basically prints money for you. No service fees, free account cheques, PC points, and the best feature of all .. FREE usage of any CIBC bank machine. CLOSE your bank accounts.

7) FOLLOW THIS ONE ONLY IF YOU HAVE SELF CONTROL WITH CREDIT CARDS. Phase out your credit cards and replace them with cards that give you extras (ie. PC points, Sears club, Air Miles, etc)... BUt only NO ANNUAL FEE cards. When you DO spend money, you might as well be banking points to redeem for necessary expeneses later. PM me and I'll list the things I've received on points. It'll inspire you.

- If you don't have self control with credit cards. STOP USING THEM. The ONLY purpose of a credit card for 99% of people should be to bank points and pay in lieu of cash. If you can't pay your FULL BALANCE each month, the credit card company owns you. Do everything possible to pay it off IN FULL.

8) Cut your cell phone off. Switch to Pay As You Go (for emergencies keep a card handy.. but don't activate it). If you must have a cellphone. Do the cheapest plan and stick to your allowed minutes.

9) Use RFD for freebies... NOT deals. The deals here are AMAZING. But if you have a fixed income like 99% of us, you'll easily talk yourself into believing you need the new Linksys WIreless G router with Speedbooster for $29.99!... blah blah blah... The freebies section has provided free dishwashing detergents, shampoos, pet food, handbags, safety equipment, cream samples, cleaners, tee shirts, baby formula, etc. Search the freebies and ye shall receive...

10) Stop with the Tim Hortons, Starbucks, muffins, candy bars, vending machine pops, etc. You're throwing your money down a toilet. Do I enjoy the occasional drive-thru Timmy's? You betcha... but I make it last. I recall the last time I had it and make sure it's infrequent. I break the pattern. I break the habit. I enjoy the odd coffee and save a lot of $$$. If it's routine, habit, etc... you're wasting your money and worse... you don't even feel like it's a REAL treat.

11) Save CASH. Get a nice box, jar, or whatever. I have an old high school pencil case that I use for bills and a metal decorative tin for change. I try to add to it at least once a week. When I get to say $100 in bills. I rubber band it and start again. When I hit a milestone number/goal, I use it to pay off essential bills/expenses and start all over again. The trick here is the visual need to see the cash piling up. It doesn't have to be a lot (in most cases it isn't at all), BUT you're not dumping it in your change tray in your car and spending it on coffee. You're counting it up, rolling it up - if it's change, and watching it grow. There is NO better motivator than watching yourself save up your money!

12) The guidelines aren't important. It's the mentality that's key. You can add to my list... take away from my list... disagree with my list... makes no difference. 95% of people reading this will fail here and won't be able to save a dime. They'll continue to eat out, to say life is too short and spend, spend, spend. A lot of my friends are like that... but I'm under 30, own my own large home, and am debt-free. The trade-off... I don't go on grand vacations out of country... I live modestly because I live by the mantra... "It's not how much you make... it's how much you save". I won't humiliate myself by telling you what I make. If any of you reading this following what I already know... you would smoke me in terms of what you could save for yourself.

And you know what... I'm happier. Never underestimate how happy one can feel when they have control over their financial present and future. No vacations to the cayman islands, or a night downtown eating and drinking, or a brand new 52" Plasma, or new clothes will EVER make you feel as good as living debt-free. Newspaper had an article that said people worry more about money than about their children. I can believe it. I know almost no one can have it both ways... but I'll take living modestly for control over my life and finances ANY DAY...

Good luck to you!

[glacier76]

That's why I plan to have the house paid off before marraige, as it will then be considered mine completely (As it would be something I brought into the marraige, not something that was acquired during). Too many horror stories about people losing their homes...

Not true. If this is gonna be a home for the two of you where you raise your kids and the whole works, then this will be considered a family asset. At the very least, your spouse would be entitled to their share of the increase in value from their moving in to the separation.


In Ontario, if you are a man,

I'm pretty sure the law applies to women as well. Even in Ontario.

[slothy@cutey]

at some point, people just start calling you cheap

People can call me whatever they like. But I'm the one whose laughin'... I've got a nice house that I don't have to worry about mortgage payments on... a new addition to the family on the way... without the financial stresses and hardships most people are forced to endure... Call it what you will, but that's not too bad of a trade-off for a little restraint and careful money management strategy.

[slothy@cutey]

That's why I plan to have the house paid off before marraige, as it will then be considered mine completely (As it would be something I brought into the marraige, not something that was acquired during). Too many horror stories about people losing their homes...


Besides the fact that it's not likely your home will be treated as "yours" after marriage in the eyes of the law... You have a pretty cynical view of marriage. I view marriage as a committment where I hold nothing back. It's not just two people joining together, it's everything they bring into their new family for the greater good of the new entity: the family! Your wife would be entitled to half your house on moral prinicipals as well as legal ones. Chances are, she'll be helping with the cooking, cleaning, decorating, maintenance, etc. of the house that will make it a more enjoyable place for both of you to live. And I think that's a greater thing than being alone in a 100% "your" house. Good luck all the same!

[TrevorK]

Besides the fact that it's not likely your home will be treated as "yours" after marriage in the eyes of the law... You have a pretty cynical view of marriage. I view marriage as a committment where I hold nothing back. It's not just two people joining together, it's everything they bring into their new family for the greater good of the new entity: the family! Your wife would be entitled to half your house on moral prinicipals as well as legal ones. Chances are, she'll be helping with the cooking, cleaning, decorating, maintenance, etc. of the house that will make it a more enjoyable place for both of you to live. And I think that's a greater thing than being alone in a 100% "your" house. Good luck all the same!

And I think that you have a pretty ignorant view of marraige, and humans in general.

It's two different opinions, and it only hurts your credibility when you reply trying to seem like you're high and mighty.

[TrevorK]

Not true. If this is gonna be a home for the two of you where you raise your kids and the whole works, then this will be considered a family asset. At the very least, your spouse would be entitled to their share of the increase in value from their moving in to the separation.

Any of the lawyers I've asked here assure me that whatever I bring into the marraige (Property, investments, etc...) is mine to bring out of marraige.

Anything that is gained during the marraige, or grows because of both parties in the marraige, would have the value gained during the marraige split. So that would include investments, housing, etc.... that both parties contribute to. I guess I should have specified that better.


I've done a search of the Family Law Act in Alberta, but I can not find anything that relates to property distribution. Perhaps you can point me to a link?

[st7860]

Regardless of the bring-in bring-out thing, if your spouse is/was/will be a stay at home spouse for most of the marriage then expect to be nailed in family court if you divorce. stay at home spouses can still contribute to the 'family' in many ways that the court might take into consideration.

[st7860]

hint:

some US banks such as Bank of America(near the border areas such as Blaine ,WA and Buffalo NY accept Canadian Customers. All you need is a Drivers licence and maybe a birth certificate, you just sign a paper saying you're not a US resident blah blah blah and you can open a checking account that comes with a Visa Debit Card that will be mailed to your Canadian Address. Some of the US banks will not do Equifax/TUC credit checks. Some of them only check CheckSystems(a US system that checks to see if you have ever bounced a check) but do not do the traditional credit check.

in other words, if you pick a bank that doesn't do credit checks, the Canadian Credit Bureaus will NOT know(nor will anyone else know) that you have a US bank account. use your imagination.

hint: Bank of America has a no fee agreement with soctiabank so you can withdraw your money at Scotiabank ATM's in Canada at no charge.

[slothy@cutey]

And I think that you have a pretty ignorant view of marraige, and humans in general.

It's two different opinions, and it only hurts your credibility when you reply trying to seem like you're high and mighty.


I'm not sure on what grounds you're accusing me of being "high and mighty". Wouldn't you prefer a positive view to marriage over a cynical one? Maybe not. But I entered my marriage wanting the best for my family as a whole. I guess you don't value the same things. I doubt it's "hurting my credibility". I've been blessed with a marriage of over 5 years built on joint committments and sharing all of our possessions. I was the major stakeholder in my home and assets prior to marriage, but I would never claim any more or less ownership over our combined family assets and neither would my spouse. We just don't view it in those terms. If you have any doubt with respect to the above in your personal situation, then maybe marriage isn't the best thing for you?

I may be ignorant. But I'll take what you call ignorant over a partner who is trying to shelter their assets away from their life partner ANY DAY!

I feel sorry for you. I obviously touched a nerve...

[konfusion666]

in other words, if you pick a bank that doesn't do credit checks, the Canadian Credit Bureaus will NOT know(nor will anyone else know) that you have a US bank account. use your imagination.

unless you open those American accounts under an assumed name, if you get investigated you can be found out.

[BlueMax]

I'm not sure on what grounds you're accusing me of being "high and mighty". Wouldn't you prefer a positive view to marriage over a cynical one? Maybe not. But I entered my marriage wanting the best for my family as a whole. I guess you don't value the same things. I doubt it's "hurting my credibility". I've been blessed with a marriage of over 5 years built on joint committments and sharing all of our possessions. I was the major stakeholder in my home and assets prior to marriage, but I would never claim any more or less ownership over our combined family assets and neither would my spouse. We just don't view it in those terms. If you have any doubt with respect to the above in your personal situation, then maybe marriage isn't the best thing for you?

I may be ignorant. But I'll take what you call ignorant over a partner who is trying to shelter their assets away from their life partner ANY DAY!

I feel sorry for you. I obviously touched a nerve...

Hear, hear! All too many people consider marriage a "temporary agreement" that they share for a little while, until the magic wears off and they want to screw someone else - or things get a little difficult so they go scurrying off like roaches when you turn on the light. If people actually acknowledged their faults and corrected them and tried to make life BETTER for their families, we wouldn't have this problem.

Feminists have done their job all too well. Now marriage is seen as a cash-grab move, or a restriction of freedoms rather than the pleasure of family unity.

I only feel sorry for these guys holding their possessions tight, screaming, "MINE! MINE! MINE!" Not good for married life. Stay single then if you don't want to share.

[Krox]

In Ontario if you are living with your significant other the house can still be considered a matrimonial home and owned by both parties.

A friend of mine owned his house when his g/f moved in. When they later decided the buy a new house his g/f had to sign the sales agreement even though my friend owned the house (only his name on the title). THe reason was they were considered common-law and the house was a matrimonial home. This meant the g/f had a right to live there and the house couldn't be sold from underneath her.

[Chookman]

Any of the lawyers I've asked here assure me that whatever I bring into the marraige (Property, investments, etc...) is mine to bring out of marraige.

Anything that is gained during the marraige, or grows because of both parties in the marraige, would have the value gained during the marraige split. So that would include investments, housing, etc.... that both parties contribute to. I guess I should have specified that better.

I am not a lawyer, but I've heard that in areas where the law allows you to keep what you entered marriage with, it also becomes jointly owned once changes have been made to it. So if you do ANY renovation to your home during marriage, no matter how minor, your spouse is entitled to a share of it.

[fireguy9]

I am not a lawyer, but I've heard that in areas where the law allows you to keep what you entered marriage with, it also becomes jointly owned once changes have been made to it. So if you do ANY renovation to your home during marriage, no matter how minor, your spouse is entitled to a share of it.


new law came into effect last yr ,,,,, what you have prior to marriage stays yours if the marriage fails!!!!

and if you already owned a home,,,,, the split would be only the gain in equity from time of marriage,,,,,,

[st7860]

to sum it up: if you are so worried about sharing your house, then don't live in with someone. there are lots of other ways to get some.

[module]

Second that.


Im with both of you on that one :p

[Neil]

maybe one of the people here experienced in such matters can explain the difference between GOOD DEBT and BAD DEBT to the noobs.

There is such a thing as good debt.

Good debt could be a loan taken out for an appreciating asset, a loan that helps you get something of value that would be otherwise unattainable, or a loan taken out that improves your cash flow situation.

Example 1

Julie is a nurse renting a small apartment across town from the hospital where she works. Rent is $695 and the property company increases it at least twice every year. She has a stressful 20 minute drive to work, and her car has been broken into twice in the apartment lot.

Julie had always vowed never to be in debt, however she gets a $115,000 mortgage on a cute condo 2 blocks from the hospital. It's her dream place and she can finally decorate it how she likes and have her family and friends visit all the time. Payments are $636/month plus $75 in fees, and taxes are abated til 2009. It's $16 more per month than the apartment, but now she can walk to work saving about $85 in fuel and $50 in parking. Her car is safe in the garage and she isn't tearing it up by commuting.

Three years into this, she owes $107,000 but the condo has a market value of $155,000, creating $48,000 of tax-free equity.

Nothing wrong with that debt is there?

Example 2

Leroy knew the value of saving and investing, but the problem was he had almost no capital to work with. He had a few 5-10 year goals like buying a house, or taking a few years off to study and travel, either of which meant building a good sized account fairly quickly.

At the institution where he works, he qualifies for around $10,000k of subsidized borrowing for every year worked. Starting three years ago, he borrowed $10,000 each year and invested in fairly aggressive mutual funds. Leroy knew these could go up or down, but as a very young person he knew he could recover or restart if things went too far wrong.

With subsidized borrowing rates and keeping his payments close to interest-only, he still owes $28,000 at an average rate of about 4%.

But his leveraged mutual fund account did 20%, 35% and 5% each year respectively, and now sits at $42,000.

By paying near interest-only instead of the regular or accelerated payments recommended by the lender, Leroy freed up around $500 per month that he also put into monthly mutual fund purchases, and that account sits at just over $25,000.

In three years Leroy has built a $67,000 investment account using good debt. Selling funds to pay this debt off would still leave him with $39,000, not including taxes or the slight tax breaks earned from borrowing cost deductions.

Example 3

Suzie was earning $26,000 per year, near the maximum level for her position. She borrowed $12,000 that allowed her to take upgrade courses full-time for a year. Returning to work, she now makes $32,000 because of the higher certification. Even after taxes, her raise covers the student loan payment and leaves her with three hundred extra per month. Her new certification has the opportunity to bid into a lot of new and different jobs and locations, and has a much higher pay range she can advance into. Without the student loan, Suzie would never have been able to make this move.