Investing

Candian Median family net worth was $300k!?

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  • Jan 24th, 2018 1:28 pm
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Apr 21, 2004
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This is almost like saying buying a brand new spanking $50k car (or any depreciating asset) means net worth erosion of $50k over 10 years. :(

I am most likely not going with a model 3 Tesla but don't want to yank a $1k deposit any time soon.
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Feb 1, 2012
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alanbrenton wrote:
Jan 11th, 2018 11:25 am
This is almost like saying buying a brand new spanking $50k car (or any depreciating asset) means net worth erosion of $50k over 10 years. :(

I am most likely not going with a model 3 Tesla but don't want to yank a $1k deposit any time soon.
It's worse than that. $50k compounded over 10 years at 5% will grow to $81k.

$1 compounded at 5% over 30 years will grow to $4.32.

So every dollar a young person fritters away on lattes, expensive drinks, designer clothes and video games takes away more than $4 of long term wealth.

Not to say you should not spend now. It's a balance between current spending, future spending and how long you want to or can work to achieve your goals. But when you go to spend money when young consider that it takes away $4 of retirement spending power and think if whatever you are buying is really worth it.
Invest your time actively and your money passively.
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Deepwater wrote:
Jan 11th, 2018 12:20 pm
It's worse than that. $50k compounded over 10 years at 5% will grow to $81k.

$1 compounded at 5% over 30 years will grow to $4.32.

So every dollar a young person fritters away on lattes, expensive drinks, designer clothes and video games takes away more than $4 of long term wealth.

Not to say you should not spend now. It's a balance between current spending, future spending and how long you want to or can work to achieve your goals. But when you go to spend money when young consider that it takes away $4 of retirement spending power and think if whatever you are buying is really worth it.
I don't think you should have this mentality. Thinking like this every time you spend a dollar pretty much means you'll be staying in your room all day. How are you going to explain to your date/girlfriend/wife that every dollar you spend will take away $4 of retirement spending power. Unless you're going to be able to find a women with the same ideology, you're going to be alone forever.
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Apr 9, 2012
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blitzforce wrote:
Jan 11th, 2018 1:33 pm
I don't think you should have this mentality. Thinking like this every time you spend a dollar pretty much means you'll be staying in your room all day. How are you going to explain to your date/girlfriend/wife that every dollar you spend will take away $4 of retirement spending power. Unless you're going to be able to find a women with the same ideology, you're going to be alone forever.
Exactly! You just need to allocate to spending and allocate to saving (investing). You spend money and get enjoyment out of it. Can't just save save and save.

I spend on a lot things but yet have a good net worth. It's about a happy medium.
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Feb 26, 2017
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blitzforce wrote:
Jan 11th, 2018 1:33 pm
I don't think you should have this mentality. Thinking like this every time you spend a dollar pretty much means you'll be staying in your room all day. How are you going to explain to your date/girlfriend/wife that every dollar you spend will take away $4 of retirement spending power. Unless you're going to be able to find a women with the same ideology, you're going to be alone forever.
I'm putting a big priority on doing a vacation ever year (I could save more but to me having the vacation is a better use of my funds). On the other hand I used to get a Tim Horton's coffee every day and about 2 years ago I started brewing my own coffee. I don't miss the coffee but unless I'm broke I'll probably keep doing the vacation. I think it depends on how much enjoyment you get out of what your purchasing (for some people it may be the coffee).
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Feb 22, 2011
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Did anyone even read the article? I love how everyone just thinks it's all real estate because they can't come to terms with the fact they're poor;

"All in all, Canadians held $12 trillion in assets at the end of 2016, with family homes making up a third of that value."
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Mar 24, 2008
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300k per family does not sound very high even if you exclude real estate (this statistic doesn't). Unless you are a low income earner, if you consider balance in accounts such as RRSPs, TFSAs, RESPs, GICs and add to that vehicles and other crap people own, it's quite easy to get to this level. This is a median net worth for a family and not an individual, not sure why some posters think it's unrealistic.
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rjg4235 wrote:
Jan 11th, 2018 2:21 pm
Did anyone even read the article? I love how everyone just thinks it's all real estate because they can't come to terms with the fact they're poor;
"All in all, Canadians held $12 trillion in assets at the end of 2016, with family homes making up a third of that value."
And another $1.5T or so of that is held as residential mortgages, so between home ownership and mortgage financing of other home owners, residential real estate is pretty close to around half of the assets of Canadians.
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Oct 21, 2014
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N8Magic wrote:
Jan 10th, 2018 1:20 pm
Real estate.

I'm willing to bet a large number of Canadians would have a negative net worth without it.
What difference does it make? The forced savings aspect of re is a fine way to build wealth.
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Gungnir wrote:
Jan 11th, 2018 4:26 pm
What difference does it make? The forced savings aspect of re is a fine way to build wealth.
When did I say it was a bad way to build wealth? But on the same token, you don't want to have all your eggs in one basket.
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Gungnir wrote:
Jan 11th, 2018 4:26 pm
What difference does it make? The forced savings aspect of re is a fine way to build wealth.
The fellow you quoted will probably also suggest that real estate tycoons would not have become billionaires had they not touched r/e

or business tycoons would not have been multi-millionaires if they didn't start, build or buy their current businesses. Or that I would be female if I lost my D!CK :)


At least for now, the interest component of the mortgage payment for majority of Canadians is a pittance compared to cash outflow related to renting. For those who bought residences properties in 2017 (proven short-term peak), they would have the household financial wherewithal anyway to afford over $1m properties so gross household income must be at least $150k. This is no NINJA type of mortgage underwriting that was experienced in the States prior to the subprime crisis.
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Dec 11, 2008
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Median eh, I don't know. What is the median house price in Canada?

For us, we are 35 yrs old and our net worth is already over $1M. Having said that, we plowed most of our savings to pay down the mortgage so it will be gone before renewal. If we did not update the value to the latest price, we'd be closer to $800k.
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burnt69 wrote:
Jan 11th, 2018 3:29 pm
And another $1.5T or so of that is held as residential mortgages, so between home ownership and mortgage financing of other home owners, residential real estate is pretty close to around half of the assets of Canadians.
A mortgage is a liability and doesn't count as part of net worth.

Net worth = Assets (what you own) minus (-) Liabilities (what you owe).
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ksgill wrote:
Jan 11th, 2018 5:09 pm
A mortgage is a liability and doesn't count as part of net worth.
A mortgage is an asset in the hands of the saver that funded it. Which certainly does count as an asset in the hands of the many Canadians that make mortgage-backed loans, directly or indirectly through a financial intermediary, pension or mutual fund.
This is no NINJA type of mortgage underwriting that was experienced in the States prior to the subprime crisis.
(proven short-term peak)
Do you really believe that?? :lol: Neither seem to be true statements to me.
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burnt69 wrote:
Jan 11th, 2018 5:10 pm
A mortgage is an asset in the hands of the saver that funded it. Which certainly does count as an asset in the hands of the many Canadians that make mortgage-backed loans, directly or indirectly through a financial intermediary, pension or mutual fund.




Do you really believe that?? :lol: Neither seem to be true statements to me.
Borrowers definitely have jobs but not sure how much they are truly making.

How can it not have been a short-term peak? By saying so, I'm not precluding it could have been a medium or long-term peak in the future, right? It's almost impossible to refute this statement so not sure what's ticking your OCDness! :)

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