The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Valens on November 26, 2019, 11:32:43 AM
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I'm 38, I live in Toronto and I make $130,000/year. It's more than I ever imagined I'd make but buying a house here is still impossible. I rent a 1000 sq. ft. apartment with all utilities included for $1700/month. Because of this I find condos unappealing since I'd be paying significantly more to not materially improve my living conditions. I must admit I'm a bit frustrated with the situation. But then I thought maybe my approach is wrong. So I had an idea and wondered if anybody had heard of anyone else doing something like this since it seems unconventional.
Basically, don't save for retirement, don't save for a down payment. Instead, keep a six month salary cushion in an easily accessible no-risk account for emergencies and then buy whatever you want within the constraints of not incurring debt. This way you have absolute liquidity and no risk that when you retire the money won't be there because the market tanked (I'm thinking of what happened to a lot of people in 2008). This does mean no retirement, but I'm ok with that. I also have no dependents so I don't need to leave an inheritance for anyone.
This way I can travel more, buy whatever fits my budget and have more fun in general (again with the caveat of not carrying any balances). I also don't have to expend any time or energy on investment strategies.
I know this is kinda out there in terms of conventional wisdom but the more I think about it the more appealing it seems.
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That sounds like a terrible way to live.
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That sounds like a terrible way to live.
Care to elaborate?
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So you're planning on dying within 6 months of retiring? Or at least having to adjust your lifestyle to fit within whatever state or public pension you might receive when the small sum of money runs out.
Considering the central thesis of this site is to disconnect "spending money" from "living a happy life", doubt you'll find many takers of the "$65K in checking = spend every other penny that comes in" philosophy.
Plus, you're getting used to a lifestyle that will be very difficult to maintain if you lose this cushy job in a few years. Again, hope you can find a new one before the savings runs out.
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I know this is kinda out there in terms of conventional wisdom but the more I think about it the more appealing it seems.
This is actually exactly how normal broke people live. So you'll have company.
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I know this is kinda out there in terms of conventional wisdom but the more I think about it the more appealing it seems.
This is actually exactly how normal broke people live. So you'll have company.
Normal broke people don't have 5 figure savings account balances. Living 3-6 months (less if a real emergency hits) from being a normal broke person is REVOLUTIONARY!
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It's pretty likely that someone making $130k/year will take longer than 6 months to find a job. That's especially true during a depression.
If you're in tech, you'll find it harder and harder to keep/get a good job past around 50.
Your boss or company could change and you could find yourself hating your job. Having 5-30 years in investments makes quitting so much easier.
Etc., etc., etc.
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Basically, don't save for retirement, don't save for a down payment. Instead, keep a six month salary cushion in an easily accessible no-risk account for emergencies and then buy whatever you want within the constraints of not incurring debt. This way you have absolute liquidity and no risk that when you retire the money won't be there because the market tanked (I'm thinking of what happened to a lot of people in 2008). This does mean no retirement, but I'm ok with that. I also have no dependents so I don't need to leave an inheritance for anyone.
This way I can travel more, buy whatever fits my budget and have more fun in general (again with the caveat of not carrying any balances). I also don't have to expend any time or energy on investment strategies.
You may have some misconceptions.
- You have to choose between having a liquid emergency fund and having retirement and investments
- Investing takes a lot of "strategies" and it could just go up in smoke
- Spending more will make me happier
Now travel and some other forms of fun might be things worth pursuing, but before we get to that, let's break down the three items above.
1. Liquidity No one here will disagree that it's a good idea to have some form of savings / emergency fund in a liquid vehicle so that you can access it. While money that you invest can still be considered liquid, we don't recommend investing with a short-term mindset, so interest-bearing savings accounts should work for this purpose. Given all that, you can still put money above and beyond this account into long-term investments.
2. Investing You don't need to expend time or energy, because it's really simple, and the work has already been done for you. Yes, you'll have to spend ten minutes opening an account if you haven't already, and it helps to connect your primary bank account to make it easy to transfer money, but even that is optional. (It just saves time later.) Beyond that, you can choose a total market index fund or life strategy/target retirement fund. This might take "time" but it's a one-time cost and you likely cannot go wrong with either. Investment Order (https://forum.mrmoneymustache.com/investor-alley/investment-order/) - at least read through this. If you stick to this simple "strategy", and you simply stick to long-term investing - that is, leave it alone - it won't go up in smoke. What happened in 2008 was that the market lost a lot of value, and people sold their investments after they lost value, reducing how much they had. If they had simply left it alone the value would have recovered and then a lot more. That's how long-term investing works. You leave it alone.
3. Spending You kind of have to figure this out for yourself. And we all have different ideas about what makes us happy. But the general idea if you're here is that you start to learn more about yourself. You learn what makes you happy, what gives you long-term satisfaction in life. Not just what's fun for a moment or two. You don't have to spend nothing on fun (or travel) to retire, but you can't spend everything. So you figure out which of those moments where your spending was actually worth it, and when it actually feels like a waste, or where a lower cost alternative might actually be more satisfying. Do this a little and before long it adds up and you not only save a lot of money that you could use for retirement, but you also find you're living a better life than before. That's the real idea here.
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This is clearly trolling. But entertaining at the same time.
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This is clearly trolling. But entertaining at the same time.
I surely hope so. Otherwise, it has to be the single dumbest post I've seen in the forum.
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So you're planning on dying within 6 months of retiring? Or at least having to adjust your lifestyle to fit within whatever state or public pension you might receive when the small sum of money runs out.
Considering the central thesis of this site is to disconnect "spending money" from "living a happy life", doubt you'll find many takers of the "$65K in checking = spend every other penny that comes in" philosophy.
Plus, you're getting used to a lifestyle that will be very difficult to maintain if you lose this cushy job in a few years. Again, hope you can find a new one before the savings runs out.
The idea is to not retire. I won't receive any kind of public pension (I don't pay into one). I wasn't aware of this site's philosophy, I asked this question elsewhere and it was recommended I seek advice here. While it's true that losing my job is a risk, that risk would be there regardless, so the issue is really is $65k enough of a cushion. Perhaps not, I'm not sure. I figured if I can't find another job before I burn through $65k I'm probably pretty boned anyway.
The central thrust of my thinking is that I want to maximize enjoyment of my income. I have no dependents and no family besides my father, who is financially secure, therefore any value in my estate when I die is worthless. Also, I can enjoy things more while I'm healthy than when I'm old and potentially infirmed. I've seen co-workers pass away shortly before or after retirement and it seems like such a waste.
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This is clearly trolling. But entertaining at the same time.
I surely hope so. Otherwise, it has to be the single dumbest post I've seen in the forum.
I'm not trolling. Whenever I run investment calculators and put in how much I could save per month I come away unimpressed, even when assuming a 10% annual return. I guess I just need to see a bigger number at the end to make the deferred gratification feel worthwhile.
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This is clearly trolling. But entertaining at the same time.
I surely hope so. Otherwise, it has to be the single dumbest post I've seen in the forum.
I'm not trolling. Whenever I run investment calculators and put in how much I could save per month I come away unimpressed, even when assuming a 10% annual return. I guess I just need to see a bigger number at the end to make the deferred gratification feel worthwhile.
How much do you think you could save? On a $130k salary I would expect quite a lot. Have you seen this blog post:
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
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Basically, don't save for retirement, don't save for a down payment. Instead, keep a six month salary cushion in an easily accessible no-risk account for emergencies and then buy whatever you want within the constraints of not incurring debt. This way you have absolute liquidity and no risk that when you retire the money won't be there because the market tanked (I'm thinking of what happened to a lot of people in 2008). This does mean no retirement, but I'm ok with that. I also have no dependents so I don't need to leave an inheritance for anyone.
This way I can travel more, buy whatever fits my budget and have more fun in general (again with the caveat of not carrying any balances). I also don't have to expend any time or energy on investment strategies.
You may have some misconceptions.
- You have to choose between having a liquid emergency fund and having retirement and investments
- Investing takes a lot of "strategies" and it could just go up in smoke
- Spending more will make me happier
Now travel and some other forms of fun might be things worth pursuing, but before we get to that, let's break down the three items above.
1. Liquidity No one here will disagree that it's a good idea to have some form of savings / emergency fund in a liquid vehicle so that you can access it. While money that you invest can still be considered liquid, we don't recommend investing with a short-term mindset, so interest-bearing savings accounts should work for this purpose. Given all that, you can still put money above and beyond this account into long-term investments.
2. Investing You don't need to expend time or energy, because it's really simple, and the work has already been done for you. Yes, you'll have to spend ten minutes opening an account if you haven't already, and it helps to connect your primary bank account to make it easy to transfer money, but even that is optional. (It just saves time later.) Beyond that, you can choose a total market index fund or life strategy/target retirement fund. This might take "time" but it's a one-time cost and you likely cannot go wrong with either. Investment Order (https://forum.mrmoneymustache.com/investor-alley/investment-order/) - at least read through this. If you stick to this simple "strategy", and you simply stick to long-term investing - that is, leave it alone - it won't go up in smoke. What happened in 2008 was that the market lost a lot of value, and people sold their investments after they lost value, reducing how much they had. If they had simply left it alone the value would have recovered and then a lot more. That's how long-term investing works. You leave it alone.
3. Spending You kind of have to figure this out for yourself. And we all have different ideas about what makes us happy. But the general idea if you're here is that you start to learn more about yourself. You learn what makes you happy, what gives you long-term satisfaction in life. Not just what's fun for a moment or two. You don't have to spend nothing on fun (or travel) to retire, but you can't spend everything. So you figure out which of those moments where your spending was actually worth it, and when it actually feels like a waste, or where a lower cost alternative might actually be more satisfying. Do this a little and before long it adds up and you not only save a lot of money that you could use for retirement, but you also find you're living a better life than before. That's the real idea here.
Thanks for the feedback. I'll take a look at the Investment Order link. If I were to invest, I'd be inclined towards passive funds, which sounds like what you're referring to. However, and my math might be off here so please correct me if I'm wrong, when I assume a 10% annual return and saving $2000 per month for 20 years I come back with $1.45 million. That would buy you a small house in Toronto today, and maybe nothing in 20 years.
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Ah yes - well it does sound like buying houses in Toronto is ridiculous and no one should do it.
Is there any other way to live your life, given your income, than to save up to buy a house in Toronto? Perhaps if you save some of your income and invest it, but then buy a house for a lot less in a different location where it makes sense? And if you save up enough, you don't need the same kind of job and income in the new location?
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Thanks for the feedback. I'll take a look at the Investment Order link. If I were to invest, I'd be inclined towards passive funds, which sounds like what you're referring to. However, and my math might be off here so please correct me if I'm wrong, when I assume a 10% annual return and saving $2000 per month for 20 years I come back with $1.45 million. That would buy you a small house in Toronto today, and maybe nothing in 20 years.
You are correct. $2k/month for 20 years at 10% is about $1.5 million. If you wanted a house then presumably some of the money you are not saving/investing would be going towards a mortgage which would be a separate investment towards home equity. Not many people wait until they have the full purchase price to buy a house.
$2k/month is very low for savings around here (especially in Canadian dollars). We're saving more than four times that amount (when converting for currency differences) though we do make about 70% more than you. $2k/month is only 18.5% of your gross income. You should be able to save at least double that.
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Ah yes - well it does sound like buying houses in Toronto is ridiculous and no one should do it.
Is there any other way to live your life, given your income, than to save up to buy a house in Toronto? Perhaps if you save some of your income and invest it, but then buy a house for a lot less in a different location where it makes sense? And if you save up enough, you don't need the same kind of job and income in the new location?
That is true, I don't have to buy a house in Toronto. Although, for myself, I think that rules out buying a house altogether as any places I'd like to live are comparable in cost to Toronto. But maybe no house at all is better.
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... I can't tell whether you're just trolling or not. The overall goal here is for maximum happiness. Turns out maximum happiness is not as expensive as everyone thinks it is.
You sound like you don't believe in the stock market. You sound stuck on the idea that you need to buy a house/condo in Toronto, which would be a bad investment (nearly impossible to buy too due to ultra inflated prices).
Write down a list of 25 things that make you happy. Sort it from cheapest to most expensive. Focus on the top 10 cheapest things that make you happy and you should be fine. You'll "accidentally" save 20-50% of your income, in which I hope you invest in cash flow producing assets (stocks), to which one day you produce so much passive cash that you could retire one day.
Even if you die with a bunch of money, which you make it sound like a "waste", what if you donated that money to something you believe in? Is it still a waste?
Don't complicate things.
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I also don't have to expend any time or energy on investment strategies.
Right, because it's so complicated *rolls eyes*
Spend a couple days reading these forums, then go 90/10 or 80/20 stocks/bonds with total stock market ETFs and call it good.
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Why do you hate the earth so much that you feel the desire to consume/burn your way through $130,000 worth of resources every year? Did a tree fall on your house in childhood, and now you want to decimate the rainforests in revenge? You know MMM is an environmentalism/reduced consumption blog, right?
Yeah, your plan is dogshit.
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MMM wrote a post specifically on how renting saves you money in HCOL cities such as Toronto. In fact, he used Toronto as his example and ran through the numbers using a $2000/month condo in downtown TO.
Another way to afford Toronto if you MUST buy is to househack. The market is softening and you may be able to get a 1 or 3 bedroom townhouse for around the same price as a downtown condo. Live in one bedroom and rent out the other(s) to help you cover the mortgage.
Finally, you have to remember that you don’t really need to spent $1.5 million to buy a $1.5M house. We have a $500k condo in Toronto that we put $70k of our own money towards. The renter paid it off for us. Also, with Toronto real estate appreciation, the $1M house you buy today will likely be worth a lot more in twenty years.
Also, how are you not contributing to a public pension? Do you (or your employer) not contribute to CPP? Is that even legal?
Finally, the biggest concern I would have if I were using your retirement strategy is the potential for job loss. I’d like to know that I have income coming in regardless of whether I’m employed.
In any case, saving $2k is pretty respectable for Canada. I’m guessing your tax rate is around 50% Since you’re probably not contributing to RRSP to reduce your taxable income. So your take home is what? ~65k per year or $5k per month? You could probably increase your savings rate by a bit.
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I'll bite and assume you are genuinely looking for advice...
It feels like the premise of this question is that spending your full salary (less whatever is in your emergency stash) will maximise your happiness.
That may be so in your situation. But those of us here have reached a different conclusion.
Many of us have realised that you can maximise happiness without spending every last dollar. Have a cable subscription, but rarely watch it? There's money I'm spending without maximising happiness. Have a set of golf clubs sitting in storage? There's money I'm spending without maximising happiness. Buying overpriced lunch in the city every day? There's money I'm spending without maximising happiness. Paying over the odds on an expensive phone plan? There's money I'm spending without maximising happiness. Paying more than the cost of the best possible deal on my car insurance? There's money I'm spending without maximising happiness.
The corollary to your theory is that working forever will also maximise your happiness.
That may be so in your situation, but those of us here have reached a different conclusion.
Many of us have realised that work can provide unbridled happiness and fulfilment. But it's not always the case - especially when you are working on someone else's terms. Finding yourself being laid off in a downturn? The more you have invested, the more options you have. Stuck in a toxic environment with a micro-managing boss? The more you have invested, the more options you have. Finding that the work you've done for the last 20 years is no longer thrilling you and you're looking for something completely different? The more you have invested, the more options you have. Wanting to go out on your own and start your own business? The more you have invested, the more options you have. Deciding that you'd rather be at the beach than in the office because, even though it's a Wednesday, it's a beautiful summer's day? The more you have invested, the more options you have.
Each decision you make is a trade-off.
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Eventually you're not going to be able to work anymore. My parents think they're going to be able to work until 70 even that I think is unrealistic. A lot of people barely make it to 62. How about you stache 100k in the stock market in addition to the 65k e-fund and I'll give you a free pass to spend however you want after that. Then come back and tell us how you're blowing 130k each year so we can make fun of you.
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Why do you hate the earth so much that you feel the desire to consume/burn your way through $130,000 worth of resources every year? Did a tree fall on your house in childhood, and now you want to decimate the rainforests in revenge? You know MMM is an environmentalism/reduced consumption blog, right?
Yeah, your plan is dogshit.
No, I did not know it was an environmentalism/reduced consumption blog. I just thought it was a financial advice blog.
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... I can't tell whether you're just trolling or not. The overall goal here is for maximum happiness. Turns out maximum happiness is not as expensive as everyone thinks it is.
You sound like you don't believe in the stock market. You sound stuck on the idea that you need to buy a house/condo in Toronto, which would be a bad investment (nearly impossible to buy too due to ultra inflated prices).
Write down a list of 25 things that make you happy. Sort it from cheapest to most expensive. Focus on the top 10 cheapest things that make you happy and you should be fine. You'll "accidentally" save 20-50% of your income, in which I hope you invest in cash flow producing assets (stocks), to which one day you produce so much passive cash that you could retire one day.
Even if you die with a bunch of money, which you make it sound like a "waste", what if you donated that money to something you believe in? Is it still a waste?
Don't complicate things.
I assure you I'm not trolling. I think the emphasis on buying a house is a bit misleading in my post. It's just what got me thinking about financial matters today. I believe in the stock market as much as anyone does, I guess. I think, fundamentally, my hang up is on the fact that even if I saved 50% of my income I wouldn't reach retirement age with a life changing amount of money. Especially if the plan is to leave the principal alone and live off the interest.
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MMM wrote a post specifically on how renting saves you money in HCOL cities such as Toronto. In fact, he used Toronto as his example and ran through the numbers using a $2000/month condo in downtown TO.
Another way to afford Toronto if you MUST buy is to househack. The market is softening and you may be able to get a 1 or 3 bedroom townhouse for around the same price as a downtown condo. Live in one bedroom and rent out the other(s) to help you cover the mortgage.
Finally, you have to remember that you don’t really need to spent $1.5 million to buy a $1.5M house. We have a $500k condo in Toronto that we put $70k of our own money towards. The renter paid it off for us. Also, with Toronto real estate appreciation, the $1M house you buy today will likely be worth a lot more in twenty years.
Also, how are you not contributing to a public pension? Do you (or your employer) not contribute to CPP? Is that even legal?
Finally, the biggest concern I would have if I were using your retirement strategy is the potential for job loss. I’d like to know that I have income coming in regardless of whether I’m employed.
In any case, saving $2k is pretty respectable for Canada. I’m guessing your tax rate is around 50% Since you’re probably not contributing to RRSP to reduce your taxable income. So your take home is what? ~65k per year or $5k per month? You could probably increase your savings rate by a bit.
I'll look for that post. In regards to CPP, I'm self-employed/incorporated and I take my income as dividends so as not to contribute to CPP.
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https://www.google.com/url?q=https://www.vanguard.com/retirementincomecalculator
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https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=000&cyearsv=24&cinterestratev=7&ccontributeamountv=5000&ciadditionat1=monthly&printit=0&x=69&y=17
If you save and invest half of your income, you'll have... a lot of money available to you by 62.
You don't live off the interest. That's not how this works.
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Eventually you're not going to be able to work anymore. My parents think they're going to be able to work until 70 even that I think is unrealistic. A lot of people barely make it to 62. How about you stache 100k in the stock market in addition to the 65k e-fund and I'll give you a free pass to spend however you want after that. Then come back and tell us how you're blowing 130k each year so we can make fun of you.
Not a bad plan, really, except for that last part. If there was a reasonably clear path to retiring with something like $20M then I'd understand the drive to save every penny. In a case like that I could convince myself to find a way to save even 70% of my income. The incentive just isn't strong enough with the numbers I have. The fear of being destitute when I'm old isn't enough motivation. I've been broke and I've been homeless, and while I'd never wish for those things to return, I need something more. I need more carrot, the stick isn't enough.
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https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=000&cyearsv=24&cinterestratev=7&ccontributeamountv=5000&ciadditionat1=monthly&printit=0&x=69&y=17
If you save and invest half of your income, you'll have... a lot of money available to you by 62.
You don't live off the interest. That's not how this works.
Better than I thought. When you say "You don't live off the interest" do you mean even once you retire you don't keep what you've accumulated in the bank and live off the annual return?
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let us know how you feel about this at 58.....or 68.....78?
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https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=000&cyearsv=24&cinterestratev=7&ccontributeamountv=5000&ciadditionat1=monthly&printit=0&x=69&y=17
If you save and invest half of your income, you'll have... a lot of money available to you by 62.
You don't live off the interest. That's not how this works.
Better than I thought. When you say "You don't live off the interest" do you mean even once you retire you don't keep what you've accumulated in the bank and live off the annual return?
No, you keep it invested and spend an inflation adjust amount (roughly) each year while your balance fluctuates up and down with the stock market (but more up than down). Time has shown that generally (95% of the time) you won't run out of money if you withdraw 4% per year, adjusted for inflation. See the Trinity study (https://en.wikipedia.org/wiki/Trinity_study).
More reading material:
https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/
https://forum.mrmoneymustache.com/investor-alley/stop-worrying-about-the-4-rule/
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
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https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=000&cyearsv=24&cinterestratev=7&ccontributeamountv=5000&ciadditionat1=monthly&printit=0&x=69&y=17
If you save and invest half of your income, you'll have... a lot of money available to you by 62.
You don't live off the interest. That's not how this works.
Better than I thought. When you say "You don't live off the interest" do you mean even once you retire you don't keep what you've accumulated in the bank and live off the annual return?
No, you keep it invested and spend an inflation adjust amount (roughly) each year while your balance fluctuates up and down with the stock market (but more up than down). Time has shown that generally (95% of the time) you won't run out of money if you withdraw 4% per year, adjusted for inflation. See the Trinity study (https://en.wikipedia.org/wiki/Trinity_study).
More reading material:
https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/
https://forum.mrmoneymustache.com/investor-alley/stop-worrying-about-the-4-rule/
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
I'll take a look. I remember someone telling me you should shift away from riskier assets like stocks as you approach retirement. Not so?
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This thread must be a fucking joke, no?
OP, if you aren't a blatant and ridiculous troll, then maybe spend some time actually reading the MMM forum, as you clearly haven't and I think it would really help you condense some of your thinking.
I will answer in earnest though that I intend to never retire, and it does give me a lot more financial flexibility long term. However, I would never, ever, ever depend on working in my senior years.
Also, if you are totally cool with completely and utterly fucking over your senior, tired, possibly very ill, future senior self...then...you're kind of an asshole and your future self deserves better.
Just imagine how brutal it will be for future you to adjust to poverty after a lifetime of rampant luxury consumption?
I feel bad for that poor beleaguered old soul who has to suffer the consequences of the indulgent, impatient, borderline insane decisions of a young high earner in Toronto who doesn't like the way compounding calculators make them feel at this point in time.
There's nothing wrong with never retiring, but there's something very very wrong with robbing yourself of the option. It's also anathema to the very MMM ethos.
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What you've described (spending all of my money each year, saving nothing for the future) is at the top of my list of most uncomfortable thought exercises & worst nightmares. Money gives me freedom & flexibility. It also gives me a helluva lo of security. While I can't predict the future, I do want to be prepared for it, and part of preparing for the future, IMO, is to understand the likelihood & desire of not wanting to work until you die huddled over your desk.
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Not a bad plan, really, except for that last part. If there was a reasonably clear path to retiring with something like $20M then I'd understand the drive to save every penny. In a case like that I could convince myself to find a way to save even 70% of my income. The incentive just isn't strong enough with the numbers I have. The fear of being destitute when I'm old isn't enough motivation. I've been broke and I've been homeless, and while I'd never wish for those things to return, I need something more. I need more carrot, the stick isn't enough.
What do you want 20 million dollars for? You need 10 million dollars to be in the top 1% of the usa.
https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/
20 million dollars is an obscene amount of money. Try posting in the bogleheads forum. In this forum retiring with 1.5 million would be enough. Bogleheads is for people with much higher net worth.
To me it sounds like you are bored and like the game of making money. Why not go for it? Have the goal of having 20 million saved in 20 years. You'll likely have to change careers to something that scales better.
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MMM wrote a post specifically on how renting saves you money in HCOL cities such as Toronto. In fact, he used Toronto as his example and ran through the numbers using a $2000/month condo in downtown TO.
Another way to afford Toronto if you MUST buy is to househack. The market is softening and you may be able to get a 1 or 3 bedroom townhouse for around the same price as a downtown condo. Live in one bedroom and rent out the other(s) to help you cover the mortgage.
Finally, you have to remember that you don’t really need to spent $1.5 million to buy a $1.5M house. We have a $500k condo in Toronto that we put $70k of our own money towards. The renter paid it off for us. Also, with Toronto real estate appreciation, the $1M house you buy today will likely be worth a lot more in twenty years.
Also, how are you not contributing to a public pension? Do you (or your employer) not contribute to CPP? Is that even legal?
Finally, the biggest concern I would have if I were using your retirement strategy is the potential for job loss. I’d like to know that I have income coming in regardless of whether I’m employed.
In any case, saving $2k is pretty respectable for Canada. I’m guessing your tax rate is around 50% Since you’re probably not contributing to RRSP to reduce your taxable income. So your take home is what? ~65k per year or $5k per month? You could probably increase your savings rate by a bit.
I'll look for that post. In regards to CPP, I'm self-employed/incorporated and I take my income as dividends so as not to contribute to CPP.
Found the post for you: https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ (https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/)
And I was wrong. The case he used was a $2300/month apartment.
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Pre-MMM, there was this guy Robert Kiyosaki (Rich Dad, Poor Dad). He was debunked for fabricating the lore of the books, but some of the points he made were pretty useful.
One thing that stuck with me when I read one book back in the day was (paraphrasing), 'I could work really hard to buy a Porsche, or I could work really hard, buy investment properties, and then get a new Porsche every three years for the rest of my life'.
The FI game hasn't changed over the years, even that there are flawed people that make money selling it; Buy investments and delay gratification until you reach FI.
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It kind of sounds like someone told you this is a good place to find information on retirement finances without actually having an in-depth discussion with you or understanding of what that is.
OP, I hope you've read some of the stuff people have already linked to. I think you'd be well served by reading the blog before diving into the forums too much. You can do this by starting at the first post and going through them all in order, or by checking out the complete list of posts and clicking on the ones you think sound most interesting first. Both options are linked to on the main page (https://www.mrmoneymustache.com/).
I'll take a look. I remember someone telling me you should shift away from riskier assets like stocks as you approach retirement. Not so?
I've heard this as well. It's the kind of thing you hear at conventional retirement advice seminars, the type that employers sometimes offer to their employees.
You should definitely read the JL Collins stock series and/or get the book. Decide what level of risk you're comfortable with, and write down what you decide. I really liked this post (https://livingafi.com/2015/02/10/an-investment-policy-statement-update/) from LivingAFI on investment policy statements - it clarified a lot of things I hadn't really put together in my head and somehow made the whole thing feel more real to me somehow. I remember when I finally "got" the 4% rule, instead of just accepting that it was true but not really understanding how it would actually work when it came time to actually use the money - that was only this year, I'm not as quick as many on here. :)
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MMM wrote a post specifically on how renting saves you money in HCOL cities such as Toronto. In fact, he used Toronto as his example and ran through the numbers using a $2000/month condo in downtown TO.
Another way to afford Toronto if you MUST buy is to househack. The market is softening and you may be able to get a 1 or 3 bedroom townhouse for around the same price as a downtown condo. Live in one bedroom and rent out the other(s) to help you cover the mortgage.
Finally, you have to remember that you don’t really need to spent $1.5 million to buy a $1.5M house. We have a $500k condo in Toronto that we put $70k of our own money towards. The renter paid it off for us. Also, with Toronto real estate appreciation, the $1M house you buy today will likely be worth a lot more in twenty years.
Also, how are you not contributing to a public pension? Do you (or your employer) not contribute to CPP? Is that even legal?
Finally, the biggest concern I would have if I were using your retirement strategy is the potential for job loss. I’d like to know that I have income coming in regardless of whether I’m employed.
In any case, saving $2k is pretty respectable for Canada. I’m guessing your tax rate is around 50% Since you’re probably not contributing to RRSP to reduce your taxable income. So your take home is what? ~65k per year or $5k per month? You could probably increase your savings rate by a bit.
I'll look for that post. In regards to CPP, I'm self-employed/incorporated and I take my income as dividends so as not to contribute to CPP.
Found the post for you: https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ (https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/)
And I was wrong. The case he used was a $2300/month apartment.
Thanks! I read the article, the principles make sense but the situation in Toronto has changed a bit since 2015. A couple of years ago they expanded rent control to include properties built after ~1991. This caused a lot of people who were renting out their condos to cease doing so creating a rental shortage. Since then rents have shot up significantly which is why I'm kinda stuck in the apartment I'm in. That same 2 bed, 2 bath apartment would cost you about $3500 - $4000/month now. Not sure how the rent vs buy argument looks with the current situation of high rents and high prices but looking at padmapper definitely makes me feel better about my 2 bed, 2 bath apartment for $1700.
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MMM wrote a post specifically on how renting saves you money in HCOL cities such as Toronto. In fact, he used Toronto as his example and ran through the numbers using a $2000/month condo in downtown TO.
Another way to afford Toronto if you MUST buy is to househack. The market is softening and you may be able to get a 1 or 3 bedroom townhouse for around the same price as a downtown condo. Live in one bedroom and rent out the other(s) to help you cover the mortgage.
Finally, you have to remember that you don’t really need to spent $1.5 million to buy a $1.5M house. We have a $500k condo in Toronto that we put $70k of our own money towards. The renter paid it off for us. Also, with Toronto real estate appreciation, the $1M house you buy today will likely be worth a lot more in twenty years.
Also, how are you not contributing to a public pension? Do you (or your employer) not contribute to CPP? Is that even legal?
Finally, the biggest concern I would have if I were using your retirement strategy is the potential for job loss. I’d like to know that I have income coming in regardless of whether I’m employed.
In any case, saving $2k is pretty respectable for Canada. I’m guessing your tax rate is around 50% Since you’re probably not contributing to RRSP to reduce your taxable income. So your take home is what? ~65k per year or $5k per month? You could probably increase your savings rate by a bit.
I'll look for that post. In regards to CPP, I'm self-employed/incorporated and I take my income as dividends so as not to contribute to CPP.
Found the post for you: https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ (https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/)
And I was wrong. The case he used was a $2300/month apartment.
Thanks! I read the article, the principles make sense but the situation in Toronto has changed a bit since 2015. A couple of years ago they expanded rent control to include properties built after ~1991. This caused a lot of people who were renting out their condos to cease doing so creating a rental shortage. Since then rents have shot up significantly which is why I'm kinda stuck in the apartment I'm in. That same 2 bed, 2 bath apartment would cost you about $3500 - $4000/month now. Not sure how the rent vs buy argument looks with the current situation of high rents and high prices but looking at padmapper definitely makes me feel better about my 2 bed, 2 bath apartment for $1700.
Just curious why you would want to leave a 2 bed 2 bath apartment for $1700. If I were you, I would pretty much hunker down indefinitely.
Speaking as someone who pays not much less for a 1 bed 1 bath apartment, not in nearly as expensive a market.
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If you like earning and spending, then working to maintain that income is not a bad strategy. But what job can you continue doing at age 70? 80? 90?
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MMM wrote a post specifically on how renting saves you money in HCOL cities such as Toronto. In fact, he used Toronto as his example and ran through the numbers using a $2000/month condo in downtown TO.
Another way to afford Toronto if you MUST buy is to househack. The market is softening and you may be able to get a 1 or 3 bedroom townhouse for around the same price as a downtown condo. Live in one bedroom and rent out the other(s) to help you cover the mortgage.
Finally, you have to remember that you don’t really need to spent $1.5 million to buy a $1.5M house. We have a $500k condo in Toronto that we put $70k of our own money towards. The renter paid it off for us. Also, with Toronto real estate appreciation, the $1M house you buy today will likely be worth a lot more in twenty years.
Also, how are you not contributing to a public pension? Do you (or your employer) not contribute to CPP? Is that even legal?
Finally, the biggest concern I would have if I were using your retirement strategy is the potential for job loss. I’d like to know that I have income coming in regardless of whether I’m employed.
In any case, saving $2k is pretty respectable for Canada. I’m guessing your tax rate is around 50% Since you’re probably not contributing to RRSP to reduce your taxable income. So your take home is what? ~65k per year or $5k per month? You could probably increase your savings rate by a bit.
I'll look for that post. In regards to CPP, I'm self-employed/incorporated and I take my income as dividends so as not to contribute to CPP.
Found the post for you: https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ (https://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/)
And I was wrong. The case he used was a $2300/month apartment.
Thanks! I read the article, the principles make sense but the situation in Toronto has changed a bit since 2015. A couple of years ago they expanded rent control to include properties built after ~1991. This caused a lot of people who were renting out their condos to cease doing so creating a rental shortage. Since then rents have shot up significantly which is why I'm kinda stuck in the apartment I'm in. That same 2 bed, 2 bath apartment would cost you about $3500 - $4000/month now. Not sure how the rent vs buy argument looks with the current situation of high rents and high prices but looking at padmapper definitely makes me feel better about my 2 bed, 2 bath apartment for $1700.
Just curious why you would want to leave a 2 bed 2 bath apartment for $1700. If I were you, I would pretty much hunker down indefinitely.
Speaking as someone who pays not much less for a 1 bed 1 bath apartment, not in nearly as expensive a market.
Financially I don't. I don't want to rent a condo for double the price just for nicer floors and hardware. Especially since that $1700 includes utilities and parking. But I've been here for 10 years and I'm bored of the apartment and the neighborhood. And since I'm renting, there a limits to what I can do with the place. None of these are good enough reasons to move and pay double, which is why I looked into buying a house, leading to my frustration with the Toronto housing market and the original post in this thread.
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It kind of sounds like someone told you this is a good place to find information on retirement finances without actually having an in-depth discussion with you or understanding of what that is.
OP, I hope you've read some of the stuff people have already linked to. I think you'd be well served by reading the blog before diving into the forums too much. You can do this by starting at the first post and going through them all in order, or by checking out the complete list of posts and clicking on the ones you think sound most interesting first. Both options are linked to on the main page (https://www.mrmoneymustache.com/).
I'll take a look. I remember someone telling me you should shift away from riskier assets like stocks as you approach retirement. Not so?
I've heard this as well. It's the kind of thing you hear at conventional retirement advice seminars, the type that employers sometimes offer to their employees.
You should definitely read the JL Collins stock series and/or get the book. Decide what level of risk you're comfortable with, and write down what you decide. I really liked this post (https://livingafi.com/2015/02/10/an-investment-policy-statement-update/) from LivingAFI on investment policy statements - it clarified a lot of things I hadn't really put together in my head and somehow made the whole thing feel more real to me somehow. I remember when I finally "got" the 4% rule, instead of just accepting that it was true but not really understanding how it would actually work when it came time to actually use the money - that was only this year, I'm not as quick as many on here. :)
I posted this elsewhere and someone just replied with a link to this place, no real discussion. I've read a couple of the linked articles and I'll read some more of them today. I appreciate the advice that the people here are providing and I really did mean it when I said "Looking for feedback". I'll take a look at the LivingAFI investment policy statement and the JL Collins stock series.
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Financially I don't. I don't want to rent a condo for double the price just for nicer floors and hardware. Especially since that $1700 includes utilities and parking. But I've been here for 10 years and I'm bored of the apartment and the neighborhood. And since I'm renting, there a limits to what I can do with the place. None of these are good enough reasons to move and pay double, which is why I looked into buying a house, leading to my frustration with the Toronto housing market and the original post in this thread.
And if you were to buy, you would also get stuck somewhere and probably get bored. Buying and selling is extremely costly.
Regardless, I really, really don't understand what housing costs have to do with saving for retirement?
I get that the cost of housing has you not wanting to save for a house, but how does that lead to the logical conclusion of not saving at all?
If you aren't a troll, then my intuition from what you've posted is that you aren't very happy, and so the appeal of spending tons of money feels like it might make your life happier.
Kind of a "Fuck it! YOLO!" kind of sentiment.
It is frustrating to work really hard, make a lot of money, and still feel so limited or even trapped. I completely understand that.
However, if your angst is driving you towards thinking that not saving at all and leaving your future self with nothing is somehow a sane option...it's time to start looking at bigger pictures and more creative solutions.
Happy, mentally healthy people don't seriously contemplate not saving anything and leaving themselves with no options when they're older. That's a fundamentally self-destructive concept. There's a reason we all assumed you were a troll.
Perhaps I'll approach this from another direction. What are you hoping that spending all of your income will give you?
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In that case, welcome to MMM, dive on in and let us know what you think of it when you've done some reading. Enjoy!
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OP: You've asked a pretty heady question for your very first post, and then proceeded to hypothetically "answer" that question using logic that is anathema to this whole group.
Which is fine. (And somewhat comical.)
However, since your future happiness hinges on the actions you will take in answering your question, I highly recommend that you have a firm grasp of the options and their associated consequences. If you think the right answer might be "financial independence" (the ethos of most of us here), then I suggest you take your time and begin reading through the MMM blog. If you think financial independence is for losers, that's fine too, but I don't think you'll find the answers you are looking for on this site.
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Financially I don't. I don't want to rent a condo for double the price just for nicer floors and hardware. Especially since that $1700 includes utilities and parking. But I've been here for 10 years and I'm bored of the apartment and the neighborhood. And since I'm renting, there a limits to what I can do with the place. None of these are good enough reasons to move and pay double, which is why I looked into buying a house, leading to my frustration with the Toronto housing market and the original post in this thread.
And if you were to buy, you would also get stuck somewhere and probably get bored. Buying and selling is extremely costly.
Regardless, I really, really don't understand what housing costs have to do with saving for retirement?
I get that the cost of housing has you not wanting to save for a house, but how does that lead to the logical conclusion of not saving at all?
If you aren't a troll, then my intuition from what you've posted is that you aren't very happy, and so the appeal of spending tons of money feels like it might make your life happier.
Kind of a "Fuck it! YOLO!" kind of sentiment.
It is frustrating to work really hard, make a lot of money, and still feel so limited or even trapped. I completely understand that.
However, if your angst is driving you towards thinking that not saving at all and leaving your future self with nothing is somehow a sane option...it's time to start looking at bigger pictures and more creative solutions.
Happy, mentally healthy people don't seriously contemplate not saving anything and leaving themselves with no options when they're older. That's a fundamentally self-destructive concept. There's a reason we all assumed you were a troll.
Perhaps I'll approach this from another direction. What are you hoping that spending all of your income will give you?
Regarding housing costs and retirement it was more that I can't afford a house now on my income and when I looked at the result of saving $2000/month at 10% per year and only reaching ~$1.5M it was frustrating. Frustrating that even after 20 years of saving at that rate I couldn't buy a decent house (without a mortgage). That doesn't mean that saving for retirement is pointless, but at that point I just thought I'd explore turning the whole thing on it's head.
In regards to your intuition you're pretty close to the mark. I feel trapped and bored. My job is easy and comfortable but there's nowhere to go from here. I could try something else in regards to career, although I don't know what that would be, and maybe that would lead to significantly more money, but it could just as easily result in the same or less and almost certainly require significant effort.
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Going back to your original post:
- Buying a house in Toronto is nearly impossible
- You want to enjoy what life has to offer, and maintain flexibility
- You have a healthy income
Given these things... what are your goals? I would suggest, for example, that travel is something that you value and want to do a lot of. What are some of the best options to do a lot of travel?
- Forget buying a house in Toronto, since it's a waste of money for what you get, and greatly reduces your flexibility
- Minimize spending on things that you value less than travel
- Save a healthy chunk of your high income and invest it so that it adds to your available resources
- Learn how to travel inexpensively so you can get a lot of traveling for your money
- With enough savings and investment, you can work less in time and have even more freedom to travel
How does approaching things with the end goal in mind help your mindset in looking for the best tactics to use to accomplish that goal?
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OP: You've asked a pretty heady question for your very first post, and then proceeded to hypothetically "answer" that question using logic that is anathema to this whole group.
Which is fine. (And somewhat comical.)
However, since your future happiness hinges on the actions you will take in answering your question, I highly recommend that you have a firm grasp of the options and their associated consequences. If you think the right answer might be "financial independence" (the ethos of most of us here), then I suggest you take your time and begin reading through the MMM blog. If you think financial independence is for losers, that's fine too, but I don't think you'll find the answers you are looking for on this site.
It is funny, but also a testament to the people here that they've been genuine and helpful. In regards to financial independence, I certainly don't think it's for losers, but I struggle with being excited to save a significant portion of my income just to maintain my lifestyle in the future. So I think we agree that financial independence is good, but maybe differ on what that means or how to get there.
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I noticed that you didn't answer the most important question in @Malkynn's post, so I'll repeat it in the hopes that you can think about it more.
What are you hoping to gain that spending all your money will give you?
Or, to put it another way, What do you plan to spend that money on that you think will make you happy? Why do you think those things will bring you happiness, or make you no longer feel bored and trapped?
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IMHO saving means to provide your future self with options.
I know lots of formerly ambitious people who have lost their earning power due to job troubles, health or other issues. Some had savings, they could wait it out, get sufficient time for treatment, move to lcol areas or do whatever was needed.
As they were used to not spend all they made it was not difficult for them to cut back.
The spenders were between a rock and a hard place.
You do not need to save for a house.
But you should save to have options at least to have FYmoney. 6 month is not enough.
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Going back to your original post:
- Buying a house in Toronto is nearly impossible
- You want to enjoy what life has to offer, and maintain flexibility
- You have a healthy income
Given these things... what are your goals? I would suggest, for example, that travel is something that you value and want to do a lot of. What are some of the best options to do a lot of travel?
- Forget buying a house in Toronto, since it's a waste of money for what you get, and greatly reduces your flexibility
- Minimize spending on things that you value less than travel
- Save a healthy chunk of your high income and invest it so that it adds to your available resources
- Learn how to travel inexpensively so you can get a lot of traveling for your money
- With enough savings and investment, you can work less in time and have even more freedom to travel
How does approaching things with the end goal in mind help your mindset in looking for the best tactics to use to accomplish that goal?
It certainly reframes things in a more appealing light. Something to reflect on while I read the linked articles and MMM posts today.
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So I think we agree that financial independence is good, but maybe differ on what that means or how to get there.
I think you're right, in that we may differ on what financial independence means. For most of us here, it is having enough money to never have to need to earn more money. If your plan involves working for the rest of your life, then you will always face the possibility of losing your job and then having to worry about providing for future you.
There's nothing inherently wrong with spending almost everything you have, except you should understand that this approach takes away options from future you, in order that present you can spend your way to happiness.
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I noticed that you didn't answer the most important question in @Malkynn's post, so I'll repeat it in the hopes that you can think about it more.
What are you hoping to gain that spending all your money will give you?
Or, to put it another way, What do you plan to spend that money on that you think will make you happy? Why do you think those things will bring you happiness, or make you no longer feel bored and trapped?
I didn't answer because I don't really have an answer. The best answer I can give right now is to buy enough distractions to not have time to think about it. I'm good at figuring out what I don't want, less so what I do.
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I noticed that you didn't answer the most important question in @Malkynn's post, so I'll repeat it in the hopes that you can think about it more.
What are you hoping to gain that spending all your money will give you?
Or, to put it another way, What do you plan to spend that money on that you think will make you happy? Why do you think those things will bring you happiness, or make you no longer feel bored and trapped?
I didn't answer because I don't really have an answer. The best answer I can give right now is to buy enough distractions to not have time to think about it. I'm good at figuring out what I don't want, less so what I do.
Again, happy, mentally healthy people don't try to buy distraction from their lives. This is a great option for ending up with a lot of regrets.
You're bored, you aren't happy where you live, you don't love your work, so your answer is to double down on having to live this way forever?
How the fuck does that make any sense?
You do realize that having no mortgage and no dependents that you have every freedom in the world to live however you want to, right?
Trying to spend your way out of malaise simply doesn't work. That's the entire reason this whole community exists.
Spending gets fuuuuuucking boooooooring after awhile, and worse, it leads to hedonic adaptation where you become no longer tolerant of a lower level of spending.
So, you become addicted to spending, but it fails to bring you any level of satisfaction.
Super fun.
If you truly look at the entirety of your life and future and the best option you can think of is to spend everything you earn on consumerism because you can't possibly fathom living a satisfying life overall, so you would rather be stuck in your not-interesting job indefinitely because you can't think of anything better to do...
Well shit.
That's a problem dude.
That's a HUGE problem.
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I noticed that you didn't answer the most important question in @Malkynn's post, so I'll repeat it in the hopes that you can think about it more.
What are you hoping to gain that spending all your money will give you?
Or, to put it another way, What do you plan to spend that money on that you think will make you happy? Why do you think those things will bring you happiness, or make you no longer feel bored and trapped?
I didn't answer because I don't really have an answer. The best answer I can give right now is to buy enough distractions to not have time to think about it. I'm good at figuring out what I don't want, less so what I do.
It seems a bit premature to be deciding if you want to be able to retire when you're 80, when you don't even know what would make current-you happy, don't you think? I'd set aside the choice to never retire, and focus your attention on learning about the needs of current-you. To be clear, that doesn't mean distracting yourself so you don't notice how unhappy you are, that means careful introspection and exploration of options.
Do you have any hobbies that you like to spend time on? Do you cook? Hike? Read? Paint? Do you have friends you could build deeper connections with? Do you know and like your neighbors, to build more community feeling? Any extended family to keep in touch with?
It sounds like your job doesn't bring any deep fulfillment, so why assume you'll want to do it forever?
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Sheesh @Malkynn I guess this is Face Punch Culture 101?
Maybe this person is here to start trouble and mock our ideas. That's not the sense I get, and despite some harsh criticism of his/her naive ideas about how to find happiness in life and how to manage money, they've stuck it out and are trying to learn from us. Hopefully they learn from past mistakes, our guidance, and all the literature we have access to on how to better extract life satisfaction from what this planet has to offer.
In my opinion, hopefully they don't learn our less palatable methods of attacking people for knowing less than we do.
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Again, happy, mentally healthy people don't try to buy distraction from their lives. This is a great option for ending up with a lot of regrets.
You're bored, you aren't happy where you live, you don't love your work, so your answer is to double down on having to live this way forever?
How the fuck does that make any sense?
You do realize that having no mortgage and no dependents that you have every freedom in the world to live however you want to, right?
Trying to spend your way out of malaise simply doesn't work. That's the entire reason this whole community exists.
Spending gets fuuuuuucking boooooooring after awhile, and worse, it leads to hedonic adaptation where you become no longer tolerant of a lower level of spending.
So, you become addicted to spending, but it fails to bring you any level of satisfaction.
Super fun.
If you truly look at the entirety of your life and future and the best option you can think of is to spend everything you earn on consumerism because you can't possibly fathom living a satisfying life overall, so you would rather be stuck in your not-interesting job indefinitely because you can't think of anything better to do...
Well shit.
That's a problem dude.
That's a HUGE problem.
Yes, it is. But it's a nut I haven't been able to crack for 15 years. Everything you've said is true, but the problem has been intractable for me for so long. I'm not sure what the answer is to what would lead to happiness, fulfillment or whatever you want to call it, which is probably why I'm doubling down on distraction.
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It seems a bit premature to be deciding if you want to be able to retire when you're 80, when you don't even know what would make current-you happy, don't you think? I'd set aside the choice to never retire, and focus your attention on learning about the needs of current-you. To be clear, that doesn't mean distracting yourself so you don't notice how unhappy you are, that means careful introspection and exploration of options.
Do you have any hobbies that you like to spend time on? Do you cook? Hike? Read? Paint? Do you have friends you could build deeper connections with? Do you know and like your neighbors, to build more community feeling? Any extended family to keep in touch with?
It sounds like your job doesn't bring any deep fulfillment, so why assume you'll want to do it forever?
It's something I've struggled to answer for a long time and I still don't have an answer. I have hobbies, great and loyal friends, a fantastic girlfriend even. But I guess those aren't the things I'm looking for, which isn't to say I'd ever want to lose them.
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Alright, let's try another tack. The point here is to get you thinking about how you spend your time and which things aren't working.
What do you imagine spending money on to distract yourself?
- Going out to eat? Would it be more fun to learn a new recipe and surprise your GF, or cook with her, or host a potluck dinner party with friends instead?
- Going to the movies? Would it be more fun to host a movie viewing at home with your GF or friends, using netflix or a library dvd?
- Going to concerts or stage shows? Join a local community theater group, or a choir.
- Going on vacation to fancy places? Try deep dives into places closer to home and learn about the history and culture of your own country, or go abroad and stay in smaller towns and really learn about the people and culture instead of staying in fancy hotels or resorts.
The other thing I think you should consider is speaking to a therapist. I'm of the opinion that just about everyone can benefit from therapy, not only people with diagnosed conditions. Your mental health is clearly suffering, so why not get some help? You may have something in your mindset preventing you from seeing solutions.
Either way, the problem you have isn't a money problem, so spending money won't fix it. You need to find the real causes of your unhappiness if you ever want to be happy. Deciding not to retire is only going to guarantee that you wind up 80 years old, poor, and still unhappy because you still won't know what you want in life.
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Sheesh @Malkynn I guess this is Face Punch Culture 101?
Maybe this person is here to start trouble and mock our ideas. That's not the sense I get, and despite some harsh criticism of his/her naive ideas about how to find happiness in life and how to manage money, they've stuck it out and are trying to learn from us. Hopefully they learn from past mistakes, our guidance, and all the literature we have access to on how to better extract life satisfaction from what this planet has to offer.
In my opinion, hopefully they don't learn our less palatable methods of attacking people for knowing less than we do.
I see this person's current emotional and psychological state as deeply alarming, and it's my personal style to be incredibly direct. This is how I speak to the people I love as well, and for some reason, they don't tend to slap me, and usually thank me for verbally shaking them a little.
In my own, odd way, this is me being genuinely caring in the only effective way I know how to be.
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Again, happy, mentally healthy people don't try to buy distraction from their lives. This is a great option for ending up with a lot of regrets.
You're bored, you aren't happy where you live, you don't love your work, so your answer is to double down on having to live this way forever?
How the fuck does that make any sense?
You do realize that having no mortgage and no dependents that you have every freedom in the world to live however you want to, right?
Trying to spend your way out of malaise simply doesn't work. That's the entire reason this whole community exists.
Spending gets fuuuuuucking boooooooring after awhile, and worse, it leads to hedonic adaptation where you become no longer tolerant of a lower level of spending.
So, you become addicted to spending, but it fails to bring you any level of satisfaction.
Super fun.
If you truly look at the entirety of your life and future and the best option you can think of is to spend everything you earn on consumerism because you can't possibly fathom living a satisfying life overall, so you would rather be stuck in your not-interesting job indefinitely because you can't think of anything better to do...
Well shit.
That's a problem dude.
That's a HUGE problem.
Yes, it is. But it's a nut I haven't been able to crack for 15 years. Everything you've said is true, but the problem has been intractable for me for so long. I'm not sure what the answer is to what would lead to happiness, fulfillment or whatever you want to call it, which is probably why I'm doubling down on distraction.
Have you considered a sabbatical? Is that at all a possibility?
Omg, you have so many options, I think you need to seriously consider blowing up your life a bit and trying something radically different.
I used to feel trapped in a very high paying job that was making me miserable, and I didn't have the housing problem you have, but virtually all of my income was going towards my massive student debt, so I do understand *deeply* the feeling of making a lot of money and not getting a lot from it.
A medical crisis forced me out of my job, forced me to take a massive pay cut, and forced me to re examine how to live my best life, and it legit was the best thing that could have ever happened to me.
Funnily enough, my health emergency actually turned out to be a diagnosis of a rare genetic disorder that is not treatable, and my health has actually gotten worse, and my career as I know it has been COMPLETELY destroyed, and you know what? I'm pretty cool with it.
Why???
Because I know that I have soooo many options, because my spending is so low that I can do whatever work I want to and still have plenty to live well, because truthfully, I was starting to get bored and I'm excited to have an opportunity to change gears without feeling the pressure to maintain my previous income level.
I might focus on my side hustles, I might get another degree, I'm not sure yet. In fact, my biggest stress right now is that I have too many great options and I have to pick, which will close some doors for now.
My options are severely limited by a serious and debilitating disease with no cure and I'm more excited about my options and my future than you are. That's not right.
Maybe you need the conceptual equivalent of a doctor telling you that your career is dead. I don't know what that would be, but it's time for you to start thinking way outside the box in the opposite direction of what you are thinking right now.
You've tried for 15 years to find happiness on your current path.
...maybe consider a very very different path?
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I see this person's current emotional and psychological state as deeply alarming, and it's my personal style to be incredibly direct. This is how I speak to the people I love as well, and for some reason, they don't tend to slap me, and usually thank me for verbally shaking them a little.
In my own, odd way, this is me being genuinely caring in the only effective way I know how to be.
It's all good Malkynn, I appreciate your directness. The only thing that has made me uncomfortable are my own posts which have been perhaps a bit too open/revealing.
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I see this person's current emotional and psychological state as deeply alarming, and it's my personal style to be incredibly direct. This is how I speak to the people I love as well, and for some reason, they don't tend to slap me, and usually thank me for verbally shaking them a little.
In my own, odd way, this is me being genuinely caring in the only effective way I know how to be.
It's all good Malkynn, I appreciate your directness. The only thing that has made me uncomfortable are my own posts which have been perhaps a bit too open/revealing.
Yeah, that's a common reaction when sharing, but remember, you only have a brief posting history and haven't shared any real info. Right now, you're still completely anonymous.
Give it some time and get whatever value you can from this thread. If after the emotional dust settles you feel regret about what you've shared, then you can just ghost this account. No big deal.
I don't think you've shared anything too much, this place has its best value when people are willing to be kind of raw.
I guarantee you're not the only one here feeling the way you do.
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It seems to me like it might be time to put financial questions on the back burner. Sure, that means you lose some time in the market, and some time maximizing your savings. But the bet motivator to do those things and stick with them is to know why you are doing them. Without that, any changes you make are unlikely to last.
So addressing who you are, who you want to be, and the kinds of things that will move you in that direction is going to be key.
What's important to me--truly important?
What makes you happy--not distracted, but happy?
What makes you content?
What does a life well-lived look like to you?
What about your current life makes you unhappy or dissatisfied?
If you could create a bucket list with 5 items and they would be assured (in that you'd be given the opportunity--not guarantee you'll summit Everest if that's on the list, but you'll get there and be giving a spot on a climb), for your entire life, what would those be? Twenty items?
I'd start with questions like that.
Also, you said that you didn't realize this is an environmental or minimalism blog. It's not, but it's also not not. The thing is that these things are all tied. Buying fewer things is good for your finances, the planet, and your overstuffed junk drawer. Likewise, it's not a philosophical blog, but it's not not. Because philosophy can help use define for ourselves a good, rewarding life, and it can also help us understand why we spend and in doing so, how to spend less. Think like hedonistic adaptation come in to play here.
I started a post a while back entitled something like, "what if money does my happiness", which on the surface in anathema to MMM. But what I said is that careful, thoughtful spending and making some expensive choices--mostly precisely where we decided to live after an international move--actually did contribute to my quality of life, in meaningful ways and ways that I feel are aligned with my values.
There are plenty of people here who spend a lot of money. $100k+. None of this is really about just spending less. It's about spending--and not spending--thoughtfully. If a great cup of coffee really makes someone feel good, in the ways they find important, then money spent on good beans and a fancy machine is probably "worth it", even if they could get by with a $.11 cup of instant.
I'm sitting at a coffee shop right now, drinking a $3 London Fog. I walked here. When I arrived, they started my drink without me having to tell them what I wanted, because the know my drink. It's a locally-owned, non-chain place. I can see and smell them roasting their own beans right now. I tip well because the staff is great, and I suspect they really appreciate that tip. I come here to write in support of my dream and goal to become a published novelist?
All of that is money that is 100% unnecessary. But this--being a part of a community, supporting a local business, having a sense of familiarity (which warms my socially anxious, cold, dark heart), working toward a long-held dream? It's exactly the life I want. And every penny spent here is a well-considered, thoroughly-examined decision.
Once you figure out the life stuff, a lot of the money stuff falls in to place. Because you realize you don't care about cars, so you buy a 5 yo modest car and drive it until the wheels fall off. (Or whatever line item makes sense for you.)
It's not always a comfortable path. But it is so, so worth it and frankly, I think the money and the chance to retire isn't at or maybe even near the top of the list of benefits.
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Have you considered a sabbatical? Is that at all a possibility?
Omg, you have so many options, I think you need to seriously consider blowing up your life a bit and trying something radically different.
I used to feel trapped in a very high paying job that was making me miserable, and I didn't have the housing problem you have, but virtually all of my income was going towards my massive student debt, so I do understand *deeply* the feeling of making a lot of money and not getting a lot from it.
A medical crisis forced me out of my job, forced me to take a massive pay cut, and forced me to re examine how to live my best life, and it legit was the best thing that could have ever happened to me.
Funnily enough, my health emergency actually turned out to be a diagnosis of a rare genetic disorder that is not treatable, and my health has actually gotten worse, and my career as I know it has been COMPLETELY destroyed, and you know what? I'm pretty cool with it.
Why???
Because I know that I have soooo many options, because my spending is so low that I can do whatever work I want to and still have plenty to live well, because truthfully, I was starting to get bored and I'm excited to have an opportunity to change gears without feeling the pressure to maintain my previous income level.
I might focus on my side hustles, I might get another degree, I'm not sure yet. In fact, my biggest stress right now is that I have too many great options and I have to pick, which will close some doors for now.
My options are severely limited by a serious and debilitating disease with no cure and I'm more excited about my options and my future than you are. That's not right.
Maybe you need the conceptual equivalent of a doctor telling you that your career is dead. I don't know what that would be, but it's time for you to start thinking way outside the box in the opposite direction of what you are thinking right now.
You've tried for 15 years to find happiness on your current path.
...maybe consider a very very different path?
I'm sorry to hear about your condition, I doubt I could even conceive what that must be like.
I've done a sabbatical. A couple of years ago, when I hadn't had a vacation in 8 years, I took a year off and spent some of that time travelling. I met my girlfriend and we spent the rest of that year mostly in bars. We've since limited that activity since it isn't sustainable. Then I got my current gig which is the same thing I was doing before but pays better.
I'm open to blowing up my life and going in a new direction, but it's the same problem as before, which is "what direction?" I know you can't answer that for me. There's a quote by Schwarzenegger that I always come back to: "I still remember that first visit to the bodybuilding gym. I had never seen anyone lifting weights before. Those guys were huge and brutal... And there it was before me - my life, the answer I'd been seeking. It clicked. It was something I suddenly just seemed to reach out and find, as if I'd been crossing a suspended bridge and finally stepped off onto solid ground."
Now, I'm not about to attempt a bodybuilding career but I'd definitely like to get off this bridge.
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OP, I'm in a somewhat similar boat. Live in a HCOL area and can't buy where I currently live and have a high SR so I opt to rent. I will likely retire in an extreme HCOL area so I'm resigning myself to being a lifetime renter. I actually don't mind renting but sometimes pine for home ownership for lifestyle reasons (multi-pet household for example). But not being able to own a home comfortably seems to make you to give up and spend away. Whereas, I don't feel that way--I want to save so I can pay my rent when I no longer work.
Also in the same boat of not knowing what I want to be or do that will truly make me up happy. And I'm lot older than you....Again, though, spending my money isn't the first solution that comes to mind for this problem.
However, I am not the most MMMer out there and will not scrimp and save every penny to an inch of my life so I can shave off a year or two of work. Long story, there's some medium...I just know that not saving at all would stress me out much more and make me unhappier.
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+1 to Villanelle's suggestions, and to everything Malkynn says.
You may benefit from reading the book "Your Money or Your Life" by Vicki Robin and Joe Dominguez. Focus on the mindfulness and personal values, rather than the investing strategies and savings tips. This is not a problem about money, but about determining your priorities. It sounds like you use money as a crutch to avoid thinking about difficult things. You need to decouple those things in order to find a path to happiness and develop a healthier relationship with money as well.
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I'm sorry to hear about your condition, I doubt I could even conceive what that must be like.
I've done a sabbatical. A couple of years ago, when I hadn't had a vacation in 8 years, I took a year off and spent some of that time travelling. I met my girlfriend and we spent the rest of that year mostly in bars. We've since limited that activity since it isn't sustainable. Then I got my current gig which is the same thing I was doing before but pays better.
I'm open to blowing up my life and going in a new direction, but it's the same problem as before, which is "what direction?" I know you can't answer that for me. There's a quote by Schwarzenegger that I always come back to: "I still remember that first visit to the bodybuilding gym. I had never seen anyone lifting weights before. Those guys were huge and brutal... And there it was before me - my life, the answer I'd been seeking. It clicked. It was something I suddenly just seemed to reach out and find, as if I'd been crossing a suspended bridge and finally stepped off onto solid ground."
Now, I'm not about to attempt a bodybuilding career but I'd definitely like to get off this bridge.
Oh, I'm fine, my life is pretty awesome.
I would have been utterly miserable had this illness not knocked me off of my highly lucrative path, and I would have gotten sucked into the consumerist spending compensations that the rest of my miserable, high-earning colleagues get into just to try and feel like all the bullshit is worth it.
Where I'm incredibly lucky is that I'm tremendously easily inspired to do new things. I get that Schwarzenegger vibe pretty much every few months. I have a small backlog of jobs I'm dying to try.
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snip...
Now, I'm not about to attempt a bodybuilding career but I'd definitely like to get off this bridge.
I am the last person who would recommend starting a bodybuilding career but have you ever tried lifting weights? I'm talking about something like powerlifting or Olympic lifting where there is a skill component and a strength component. For me, it is incredibly rewarding to be able to see progress in skill development over time. And they say that it's good for your brain to learn a new physical skill.
Also, if I am physically tired out, I start to really appreciate a "boring" desk job if only for the recovery time.
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I recommend the books Quitter by jon acuff and "it's not always depression "
Not everyone has a moment where everything clicks. Also you can have lots of clicks too. Schwarzenegger (and society) make it sound like we're supposed to build up to this one moment of clarity and then be happy doing that one thing for the next 40 years. Did Schwarzenegger have this moment of clarity when he decided to become an actor? When he went into politics? He probably wanted to try different things, and you can too. Schwarzenegger isn't a professional body builder anymore. And I bet he's glad he saved some money.
I don't know what kind of savings you have currently but say you had 1 million right now you could retire and you wouldn't have to worry about having a direction. Don't you want that option for future you? That's what savings and financial independence gives you: options.
Oh and you know how Schwarzenegger made his first million? Real estate investing. He only made 75k for his first movie so he likely had that 1st million to fall back on.
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I recommend the books Quitter by jon acuff and "it's not always depression "
Not everyone has a moment where everything clicks. Also you can have lots of clicks too. Schwarzenegger (and society) make it sound like we're supposed to build up to this one moment of clarity and then be happy doing that one thing for the next 40 years. Did Schwarzenegger have this moment of clarity when he decided to become an actor? When he went into politics? He probably wanted to try different things, and you can too. Schwarzenegger isn't a professional body builder anymore. And I bet he's glad he saved some money.
I don't know what kind of savings you have currently but say you had 1 million right now you could retire and you wouldn't have to worry about having a direction. Don't you want that option for future you? That's what savings and financial independence gives you: options.
Bingo. I get clicks all the time, but I don't want to do anything for 40 years.
Even Schwarzenegger didn't do competitive body building for 40 years, he's had wild career swings along the way.
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snip...
Now, I'm not about to attempt a bodybuilding career but I'd definitely like to get off this bridge.
I am the last person who would recommend starting a bodybuilding career but have you ever tried lifting weights? I'm talking about something like powerlifting or Olympic lifting where there is a skill component and a strength component. For me, it is incredibly rewarding to be able to see progress in skill development over time. And they say that it's good for your brain to learn a new physical skill.
Also, if I am physically tired out, I start to really appreciate a "boring" desk job if only for the recovery time.
I train five days per week, although for me it's bodybuilding over powerlifting or Olympic.
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You guys have given me a lot to think about. I've read through the linked articles and I'm sure there are plenty more MMM posts that will be helpful. For now I will focus on retiring the last of my debt and building up my e-fund a bit more. Then I should be able to sock away ~$4000/month without much trouble. In the meantime I can figure out what kind of investment vehicle(s) to use.
Thanks for taking the time to respond, it is much appreciated.
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I recommend the books Quitter by jon acuff and "it's not always depression "
Not everyone has a moment where everything clicks. Also you can have lots of clicks too. Schwarzenegger (and society) make it sound like we're supposed to build up to this one moment of clarity and then be happy doing that one thing for the next 40 years. Did Schwarzenegger have this moment of clarity when he decided to become an actor? When he went into politics? He probably wanted to try different things, and you can too. Schwarzenegger isn't a professional body builder anymore. And I bet he's glad he saved some money.
I don't know what kind of savings you have currently but say you had 1 million right now you could retire and you wouldn't have to worry about having a direction. Don't you want that option for future you? That's what savings and financial independence gives you: options.
Bingo. I get clicks all the time, but I don't want to do anything for 40 years.
Even Schwarzenegger didn't do competitive body building for 40 years, he's had wild career swings along the way.
And just as a contrast, I'm not sure I've ever, in my 44 rotations around this planet had a click in the way that Schwarzenegger described.
I think it's important to recognize that some people will never get that. Sure, plenty of people do, but it's not a realistic expectation for everyone so to wait for it is highly unwise.
I just have things that I like. And people that I adore, and over time, bouncing around around among those things, I've found some things that make me content and satisfied and happy. And that make me feel challenged and interested. But never once was there a "Eureka!" moment. It was more like wearing jeans. You try on a pair, they don't work, you don't buy them. And sometimes, even the ones you buy end up being a mistake; after you have them on for an hour, the ass is saggy and the are slipping off your hips. And maybe it's the pair that are slightly uncomfortable and unattractive at first, but 15 minutes in, when they are warmed up and relaxed, they are perfection.
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I can say that old age comes faster than you expect. We balanced some travel with our need to save. Now at 65 very grateful for pensions and our savings. Enjoy things in the present but save for the future.
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Thanks for the feedback. I'll take a look at the Investment Order link. If I were to invest, I'd be inclined towards passive funds, which sounds like what you're referring to. However, and my math might be off here so please correct me if I'm wrong, when I assume a 10% annual return and saving $2000 per month for 20 years I come back with $1.45 million. That would buy you a small house in Toronto today, and maybe nothing in 20 years.
$2k a month is a pittance of a contribution if you're making $130k pa, and your housing is $1,700 a month all utilities included. You pay something like $2k per month in taxes.
You have another $5k/month unaccounted for.
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Thanks for the feedback. I'll take a look at the Investment Order link. If I were to invest, I'd be inclined towards passive funds, which sounds like what you're referring to. However, and my math might be off here so please correct me if I'm wrong, when I assume a 10% annual return and saving $2000 per month for 20 years I come back with $1.45 million. That would buy you a small house in Toronto today, and maybe nothing in 20 years.
$2k a month is a pittance of a contribution if you're making $130k pa, and your housing is $1,700 a month all utilities included. You pay something like $2k per month in taxes.
You have another $5k/month unaccounted for.
Exactly. I recently saw an add from a pension fund that showed a picture of a grown up man (40-50) and the message that he saved 4.000 euros a year!
Maybe such a message makes an impression on normal people, but DH and I save about 20 times that much in a year (when working full time), so I wasn't impressed at all.
I am pretty sure you could even save up for a Toronto house if you used your full saving capabilities. Still, buying a house there might not be the best financial choice. But in your case, I would build up a good amount of stash to be able to do something completely different from what you are doing now: move, very different job for any kind of pay, retirement.
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Thanks for the feedback. I'll take a look at the Investment Order link. If I were to invest, I'd be inclined towards passive funds, which sounds like what you're referring to. However, and my math might be off here so please correct me if I'm wrong, when I assume a 10% annual return and saving $2000 per month for 20 years I come back with $1.45 million. That would buy you a small house in Toronto today, and maybe nothing in 20 years.
$2k a month is a pittance of a contribution if you're making $130k pa, and your housing is $1,700 a month all utilities included. You pay something like $2k per month in taxes.
You have another $5k/month unaccounted for.
Actually, it’s pretty normal for Toronto. Assume 50% effective tax rate, so take home is around $5k per month. $1700 for rent and $2000 savings. You’re left with $1300 to spend. $1000 for gas and car insurance (insurance and gas are very expensive in the Greater Toronto Area) and you’re left with $300 for food and other stuff. If you’re spending like a normal person.
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You guys have given me a lot to think about. I've read through the linked articles and I'm sure there are plenty more MMM posts that will be helpful. For now I will focus on retiring the last of my debt and building up my e-fund a bit more. Then I should be able to sock away ~$4000/month without much trouble. In the meantime I can figure out what kind of investment vehicle(s) to use.
Thanks for taking the time to respond, it is much appreciated.
Can I just say: good on you for staying in the conversation and being open to what people have been saying? It's not all that common, and I think it's a great indicator for you to find a way through your questions to an answer that works for you. Good luck.
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Thanks for the feedback. I'll take a look at the Investment Order link. If I were to invest, I'd be inclined towards passive funds, which sounds like what you're referring to. However, and my math might be off here so please correct me if I'm wrong, when I assume a 10% annual return and saving $2000 per month for 20 years I come back with $1.45 million. That would buy you a small house in Toronto today, and maybe nothing in 20 years.
$2k a month is a pittance of a contribution if you're making $130k pa, and your housing is $1,700 a month all utilities included. You pay something like $2k per month in taxes.
You have another $5k/month unaccounted for.
Actually, it’s pretty normal for Toronto. Assume 50% effective tax rate, so take home is around $5k per month. $1700 for rent and $2000 savings. You’re left with $1300 to spend. $1000 for gas and car insurance (insurance and gas are very expensive in the Greater Toronto Area) and you’re left with $300 for food and other stuff. If you’re spending like a normal person.
Am I missing something in the effective tax rate?
Total income tax on 130K assuming no RRSP savings is 40K, so take home of 90K. If that 2K/mo is going into RRSPs, then the total income tax is only 30K.
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Actually, it’s pretty normal for Toronto. Assume 50% effective tax rate, so take home is around $5k per month.
Detail where that's coming from, as the Canadian income tax tables I found had OP around $2k in taxes.
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Have you considered a sabbatical? Is that at all a possibility?
Omg, you have so many options, I think you need to seriously consider blowing up your life a bit and trying something radically different.
I used to feel trapped in a very high paying job that was making me miserable, and I didn't have the housing problem you have, but virtually all of my income was going towards my massive student debt, so I do understand *deeply* the feeling of making a lot of money and not getting a lot from it.
A medical crisis forced me out of my job, forced me to take a massive pay cut, and forced me to re examine how to live my best life, and it legit was the best thing that could have ever happened to me.
Funnily enough, my health emergency actually turned out to be a diagnosis of a rare genetic disorder that is not treatable, and my health has actually gotten worse, and my career as I know it has been COMPLETELY destroyed, and you know what? I'm pretty cool with it.
Why???
Because I know that I have soooo many options, because my spending is so low that I can do whatever work I want to and still have plenty to live well, because truthfully, I was starting to get bored and I'm excited to have an opportunity to change gears without feeling the pressure to maintain my previous income level.
I might focus on my side hustles, I might get another degree, I'm not sure yet. In fact, my biggest stress right now is that I have too many great options and I have to pick, which will close some doors for now.
My options are severely limited by a serious and debilitating disease with no cure and I'm more excited about my options and my future than you are. That's not right.
Maybe you need the conceptual equivalent of a doctor telling you that your career is dead. I don't know what that would be, but it's time for you to start thinking way outside the box in the opposite direction of what you are thinking right now.
You've tried for 15 years to find happiness on your current path.
...maybe consider a very very different path?
I'm sorry to hear about your condition, I doubt I could even conceive what that must be like.
I've done a sabbatical. A couple of years ago, when I hadn't had a vacation in 8 years, I took a year off and spent some of that time travelling. I met my girlfriend and we spent the rest of that year mostly in bars. We've since limited that activity since it isn't sustainable. Then I got my current gig which is the same thing I was doing before but pays better.
I'm open to blowing up my life and going in a new direction, but it's the same problem as before, which is "what direction?" I know you can't answer that for me. There's a quote by Schwarzenegger that I always come back to: "I still remember that first visit to the bodybuilding gym. I had never seen anyone lifting weights before. Those guys were huge and brutal... And there it was before me - my life, the answer I'd been seeking. It clicked. It was something I suddenly just seemed to reach out and find, as if I'd been crossing a suspended bridge and finally stepped off onto solid ground."
Now, I'm not about to attempt a bodybuilding career but I'd definitely like to get off this bridge.
As wonderful as that may have been for him - I wouldn't spend my life waiting for a similar epiphany. I don't think most of us are gifted with either that level of passion for something, and consequently - aren't gifted with that level of clarity.
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$1000 for gas and car insurance (insurance and gas are very expensive in the Greater Toronto Area)
Are you sure? Last time I looked the insurance was 200-250/month and gas couldn't be 750/month. I don't own a car so I don't know what I'm talking about, but for 12k/year you could perpetually rent a car.
V
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Actually, it’s pretty normal for Toronto. Assume 50% effective tax rate, so take home is around $5k per month.
Detail where that's coming from, as the Canadian income tax tables I found had OP around $2k in taxes.
Does your table include both federal and provincial taxes?
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Actually, it’s pretty normal for Toronto. Assume 50% effective tax rate, so take home is around $5k per month.
Detail where that's coming from, as the Canadian income tax tables I found had OP around $2k in taxes.
Does your table include both federal and provincial taxes?
Okay, that takes it to around 29%. Still far short of the 50% you're claiming. And I didn't even get into various deductions.
Your turn, bub. Back up the claim or back off.
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Actually, it’s pretty normal for Toronto. Assume 50% effective tax rate, so take home is around $5k per month.
Detail where that's coming from, as the Canadian income tax tables I found had OP around $2k in taxes.
Does your table include both federal and provincial taxes?
Okay, that takes it to around 29%. Still far short of the 50% you're claiming. And I didn't even get into various deductions.
Your turn, bub. Back up the claim or back off.
Whoa la, why the aggression?
Although, as I posted above, 50% effective be tax rate seems way, way off, speaking as an Ontarian who has had years making almost exactly 130K.
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I second the recommendation to read "Your Money or Your Life" (but ignore the investment advice). It's a really great book because it has step-by-step instructions on how to examine your life, through your spending of money and time, to determine what is really meaningful for you and what truly adds value to your life.
We cut out whole spending categories and changed part of our lifestyle. (Goodbye cable! Took the 12-year-old six months to notice we didn't have it anymore)
I started saying "No" to a lot of things and focusing my time on the things that made me happier.
My husband and I also set short-term and long-term financial goals for ourselves. They are along these lines
- retire in X year with $Y
- Save $Z for college educations for the kids by 2024
- Pay off credit cards each month
- take a minimum of 1 large vacation each year
- H gets $X/year for his car hobby
Plus, the big goal: Don't be miserable.
Big decisions get evaluated in part on how they impact our goals. At one point, H quit his job and went back to school for 3 years. It set our retirement goal back a bit, but it satisfied the "don't be miserable" goal. He now has a totally different career he likes better...and the 3 years he was a part-time stay-at-home dad made an immeasurable impact on our son. Without a big bucket of savings, we wouldn't have been able to do that.
I walked away from a job with a great pension and took a lower salary because the old job was soul-sucking boredom. At some point I may transition to part-time work.
Over Thanksgiving my brother-in-law told us about a personal situation he's in right now. He has a plan to handle it, but we were able to write a check to relieve one of his worries. It felt good to know that even though we are still 8-9 years from retirement, we have the money to make a difference to people we care about.
To me, money is security and freedom (and vacations). What does it mean to you?
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MMM wrote a post specifically on how renting saves you money in HCOL cities such as Toronto. In fact, he used Toronto as his example and ran through the numbers using a $2000/month condo in downtown TO.
Another way to afford Toronto if you MUST buy is to househack. The market is softening and you may be able to get a 1 or 3 bedroom townhouse for around the same price as a downtown condo. Live in one bedroom and rent out the other(s) to help you cover the mortgage.
Finally, you have to remember that you don’t really need to spent $1.5 million to buy a $1.5M house. We have a $500k condo in Toronto that we put $70k of our own money towards. The renter paid it off for us. Also, with Toronto real estate appreciation, the $1M house you buy today will likely be worth a lot more in twenty years.
Also, how are you not contributing to a public pension? Do you (or your employer) not contribute to CPP? Is that even legal?
Finally, the biggest concern I would have if I were using your retirement strategy is the potential for job loss. I’d like to know that I have income coming in regardless of whether I’m employed.
In any case, saving $2k is pretty respectable for Canada. I’m guessing your tax rate is around 50% Since you’re probably not contributing to RRSP to reduce your taxable income. So your take home is what? ~65k per year or $5k per month? You could probably increase your savings rate by a bit.
I'll look for that post. In regards to CPP, I'm self-employed/incorporated and I take my income as dividends so as not to contribute to CPP.
Jesus, this makes your plan even worse: you won't even have CPP when you stop working/are unable to work any longer! I guess there's always welfare after you blow through your three to six months savings in, well, three to six months.
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@Valens last active 3 days ago. Will they come back?!
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@Valens last active 3 days ago. Will they come back?!
Betting they decided ERE forums would be more receptive to the idea than here.
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@Valens last active 3 days ago. Will they come back?!
Betting they decided ERE forums would be more receptive to the idea than here.
Well I think you all have given him/her/them a lot to ponder and think about and hopefully begin working on.
It can be life altering to have invisible hands come through your computer screen and shake you into thinking more about the future.
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I can see where the OP's head is at.
Hard to see grinding for 30 years unhappily to end up with a mere 1.5M, which wouldn't cover (at 4%) the spending you were doing. Where's the appeal?
That being said, once you embrace the idea that spending doesn't equate to happiness, you can see an endpoint carrot: FIRE.
When being sent here, OP had no idea what we were about. That's gotta be disorienting.
You guys have given me a lot to think about. I've read through the linked articles and I'm sure there are plenty more MMM posts that will be helpful. For now I will focus on retiring the last of my debt and building up my e-fund a bit more. Then I should be able to sock away ~$4000/month without much trouble. In the meantime I can figure out what kind of investment vehicle(s) to use.
Thanks for taking the time to respond, it is much appreciated.
Good work. Keep reading, keep learning.
At some point, you may decide it's worth decoupling your time from having to earn money, work for a half dozen or a dozen years to reach financial independence, then do whatever you want all day. You may not have the crossed bridge idea yet, and maybe never will... but I can bet your current work certainly isn't it. FI gives you options.
Good luck!
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Well it's been a while. The world sure took a dump since I last posted here. I've been lucky enough that my income has not been disrupted. That said, I've made some progress but find myself becoming frustrated again.
The progress: I've paid off all my debt (except my car loan but I'm not upside down on it and it's only 2% interest) and I've increased my emergency fund to $30000 and put $10000 in the market.
The frustration: Now that I'm building up savings I'm trying to think of things to do with it. ie. What am I saving for? The problem is whenever I run the numbers for saving $4200/month and assuming an aggressive 8% average return per year it still doesn't get me anywhere. After 10 years I'd have ~$780K and even then I can't really touch it. And that would be 10 years of aggressive saving where I can't take more than a weekend getaway. I've thought about buying a property outside the GTA and renting it or buying a property abroad and using it for airbnb and a vacation home but again it will take years to save up enough for a down payment and even then the purchase essentially wipes me out, leaving me in a precarious position should anything go wrong. Is the only option open to me just to save enough that hopefully when I can't work anymore I can live off the return? It's not very motivating.
I know there are options other than real estate but I keep coming back to it because I don't like where I live. I looked at moving to another apartment but the cost is high. I pay about $1800/month all-in now, but to move to a similar sized apartment in a better area would cost ~$3600/month. Paying double doesn't seem worth it not just because of the direct cost but also the opportunity cost of having $1800/month less to save or spend.
Just saving money and working is boring. I need something to do with my money that can earn a good return and act as some kind of project. Just parking my money in the market isn't motivating. But interesting projects seem to always require capital far in excess of my means.
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Sure, just saving money is boring. A lot of people get to a point where they've made everything automated and paid off all debts and there's nothing left to "do."
Only you can answer what it is you are saving for. It is up to you to decide what brings meaning to your life.
This particular website is about the idea of "enough." You're not going to get much sympathy here about "only" having 780k ten years from now.
It sounds like its important to you to be able to spend your full salary each year and unless you can save a few million to keep your current lifestyle it's not worth it.
I personally can't relate to that but my advice is to seek a line of work that pays more, like sales, so that you can earn more, spend the same, and save more.
I just think you would like a forum like bogleheads better than this one.
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You really only have two choices here if you want to continue on in the life you are leading: either learn to live happily on the amount of money you are making, or make more money.
It doesn't sound like you're particularly sold on being able to be happy living a frugal life, at least not in the way you are living now, so the alternative of figuring out how to make more money might be a better way to go.
Either way, you don't sound very happy with your life or it's trajectory, so it's time to start actively looking at ways to significantly change it. I would really start thinking outside the box and looking at what you actually need in order to be happy, because this obviously isn't it.
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This particular website is about the idea of "enough." You're not going to get much sympathy here about "only" having 780k ten years from now.
It sounds like its important to you to be able to spend your full salary each year and unless you can save a few million to keep your current lifestyle it's not worth it.
No, I don't need to spend my full salary each year. My point is that if I were to save $4200/month for 10 years, during that time all I'd be able to do (at my current income) is one or two weekend getaways per year. Everything else would go to expenses. I like being smart/efficient with my money but I definitely have some limits around quality of life. I have no interest in buying a new car every 4 years or anything like that but I'd like to go out for a nice meal once a week with friends and have a couple weeks vacation somewhere every year. As for "only" 780k, it represents a lot of work just to maintain the status quo. Hardly motivating.
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You really only have two choices here if you want to continue on in the life you are leading: either learn to live happily on the amount of money you are making, or make more money.
It doesn't sound like you're particularly sold on being able to be happy living a frugal life, at least not in the way you are living now, so the alternative of figuring out how to make more money might be a better way to go.
Either way, you don't sound very happy with your life or it's trajectory, so it's time to start actively looking at ways to significantly change it. I would really start thinking outside the box and looking at what you actually need in order to be happy, because this obviously isn't it.
I don't necessarily have a problem with the amount I make. It's more an issue of time, age and opportunity cost. If I was 20, then 10 years and 780k looks more attractive. I can put that money into something, have some left over and have lots of time to build up savings again. But if I save up 780k over 10 years now, and then put it towards something, I won't have time to rebuild savings. If whatever I invest that money into loses money then I'm screwed.
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This particular website is about the idea of "enough." You're not going to get much sympathy here about "only" having 780k ten years from now.
It sounds like its important to you to be able to spend your full salary each year and unless you can save a few million to keep your current lifestyle it's not worth it.
No, I don't need to spend my full salary each year. My point is that if I were to save $4200/month for 10 years, during that time all I'd be able to do (at my current income) is one or two weekend getaways per year. Everything else would go to expenses. I like being smart/efficient with my money but I definitely have some limits around quality of life. I have no interest in buying a new car every 4 years or anything like that but I'd like to go out for a nice meal once a week with friends and have a couple weeks vacation somewhere every year. As for "only" 780k, it represents a lot of work just to maintain the status quo. Hardly motivating.
Well, you could always change your expenses. They're not set in stone. Case in point: As a couple, we earn substantially less than you, save more than you, and also travel to about five or six countries a year, and do four or five weekend getaways on top of that. There's no such thing as fixed expenses. If you axe everything from your spending that you don't care about, you can funnel tons of money into what you do care about, and also save like crazy and retire early.
Honestly, as far as quality of life goes, your sounds pretty bad by my standards. Having to work indefinitely and only getting to travel 2 weeks a year or less sounds like my personal hell. In terms of sacrifice, I don't think there's a much bigger sacrifice a person can make than working 40+ years when there's so much fun stuff you could be doing instead, unless you absolutely love your job.
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You are one layoff away from a disaster.
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Well, you could always change your expenses. They're not set in stone. Case in point: As a couple, we earn substantially less than you, save more than you, and also travel to about five or six countries a year, and do four or five weekend getaways on top of that. There's no such thing as fixed expenses. If you axe everything from your spending that you don't care about, you can funnel tons of money into what you do care about, and also save like crazy and retire early.
Honestly, as far as quality of life goes, your sounds pretty bad by my standards. Having to work indefinitely and only getting to travel 2 weeks a year or less sounds like my personal hell. In terms of sacrifice, I don't think there's a much bigger sacrifice a person can make than working 40+ years when there's so much fun stuff you could be doing instead, unless you absolutely love your job.
I'd love to hear more about your expense cutting strategy. My expenses tally ~$4000/month.
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Well, you could always change your expenses. They're not set in stone. Case in point: As a couple, we earn substantially less than you, save more than you, and also travel to about five or six countries a year, and do four or five weekend getaways on top of that. There's no such thing as fixed expenses. If you axe everything from your spending that you don't care about, you can funnel tons of money into what you do care about, and also save like crazy and retire early.
Honestly, as far as quality of life goes, your sounds pretty bad by my standards. Having to work indefinitely and only getting to travel 2 weeks a year or less sounds like my personal hell. In terms of sacrifice, I don't think there's a much bigger sacrifice a person can make than working 40+ years when there's so much fun stuff you could be doing instead, unless you absolutely love your job.
I'd love to hear more about your expense cutting strategy. My expenses tally ~$4000/month.
Y'oughta post in the Case Studies section of the forum. My thought after reading this thread is that maybe you should move outside of the HCOL city you're in.
Kudos for 1) hanging in there through this discussion- we tend to be a very passionate crew about these subjects, 2) actually starting to read the links posted (they're all excellent), and 3) paying off your debt!
As others have mentioned, it certainly is possible to change the expense:earning ratio. Many discussions have been had on this forum to find the "optimal" ratio of those two things for a given person. But more importantly, I wanted to echo @Malcat- it sounds like you have a more serious issue than finances here, and that's how to make yourself happy. I don't mean that in a condescending or patronizing way, but I think you'd get more bang-for-your-buck (no pun intended) by orienting yourself better in that domain.
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Well, you could always change your expenses. They're not set in stone. Case in point: As a couple, we earn substantially less than you, save more than you, and also travel to about five or six countries a year, and do four or five weekend getaways on top of that. There's no such thing as fixed expenses. If you axe everything from your spending that you don't care about, you can funnel tons of money into what you do care about, and also save like crazy and retire early.
Honestly, as far as quality of life goes, your sounds pretty bad by my standards. Having to work indefinitely and only getting to travel 2 weeks a year or less sounds like my personal hell. In terms of sacrifice, I don't think there's a much bigger sacrifice a person can make than working 40+ years when there's so much fun stuff you could be doing instead, unless you absolutely love your job.
I'd love to hear more about your expense cutting strategy. My expenses tally ~$4000/month.
That's about double what we spend, except we support two people versus one. What's the breakdown?
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Try doing a case study. If you want to save 50k a year and pay 21k a year a rent, surely on a salary of 130k a year you can spend 4800 a year on dinners out (100 a meal per week) and a $2k vacation a year. That's 78k. My Canadian tax calculator says you should be taking home 90k a year.
Nobody is telling you not to spend money on things that make you happy.
Have you thought about where you would like to be in 10 years? You know how you were saying that if you had saved a lot of money ten years ago then it would have been worth it?
10 years from now you'll be kicking yourself for not saving more money when it was easier. 48 years old is still plenty of time to recover from a risky venture if that's what you want to do.
I am 37 now. When I started saving 5 years ago I could have said to myself "self, I will only save 200k in 5 years. So I'm not going to bother." I am sure glad I didn't tell myself that! Today I would much rather have 200k than less that, or zero.
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If you stay around here, you may discover this is a forum about "how to live a good life" rather than finances. What are your hopes and dreams, your values, pleasures and sorrows? And how does effective management of your time , intelligence, energy and emotion enable a fulfilling life.
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You really only have two choices here if you want to continue on in the life you are leading: either learn to live happily on the amount of money you are making, or make more money.
It doesn't sound like you're particularly sold on being able to be happy living a frugal life, at least not in the way you are living now, so the alternative of figuring out how to make more money might be a better way to go.
Either way, you don't sound very happy with your life or it's trajectory, so it's time to start actively looking at ways to significantly change it. I would really start thinking outside the box and looking at what you actually need in order to be happy, because this obviously isn't it.
I don't necessarily have a problem with the amount I make. It's more an issue of time, age and opportunity cost. If I was 20, then 10 years and 780k looks more attractive. I can put that money into something, have some left over and have lots of time to build up savings again. But if I save up 780k over 10 years now, and then put it towards something, I won't have time to rebuild savings. If whatever I invest that money into loses money then I'm screwed.
That literally translates to you not making enough money to support the kind of spend you would like and the retirement timeline you would like.
However you slice it, your income, expenses, and timeline to retirement aren't working for you. Something has to change in order for you to feel like you aren't wasting away your time and energy.
That's no way to live, and I see no rational reason to do so.
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That's about double what we spend, except we support two people versus one. What's the breakdown?
Rent: 1800
Car: 865
Groceries: 600
Internet: 120
Cell phone: 145
Insurance: 220
Gym: 65
Gas: 50
Apple Music: 10
Amazon Prime: 10
Grooming: 100
Of those I could get rid of Amazon Prime and reduce grooming by 40%. But I don't think $50/month will make a material difference.
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You really only have two choices here if you want to continue on in the life you are leading: either learn to live happily on the amount of money you are making, or make more money.
It doesn't sound like you're particularly sold on being able to be happy living a frugal life, at least not in the way you are living now, so the alternative of figuring out how to make more money might be a better way to go.
Either way, you don't sound very happy with your life or it's trajectory, so it's time to start actively looking at ways to significantly change it. I would really start thinking outside the box and looking at what you actually need in order to be happy, because this obviously isn't it.
I don't necessarily have a problem with the amount I make. It's more an issue of time, age and opportunity cost. If I was 20, then 10 years and 780k looks more attractive. I can put that money into something, have some left over and have lots of time to build up savings again. But if I save up 780k over 10 years now, and then put it towards something, I won't have time to rebuild savings. If whatever I invest that money into loses money then I'm screwed.
That literally translates to you not making enough money to support the kind of spend you would like and the retirement timeline you would like.
However you slice it, your income, expenses, and timeline to retirement aren't working for you. Something has to change in order for you to feel like you aren't wasting away your time and energy.
That's no way to live, and I see no rational reason to do so.
Very much stuck in the rat race, so to speak. Doing everything "right" but still looking down the pipeline at nothing exciting.
Valens: I second the idea of posting in the "case studies". Maximizing your $ is quite fun in some scenarios, at least once you gamify it.
I also second the idea of trying to delve into the mental rut. Perhaps psychologist isn't out of the picture just to have someone help you find some more meaning. I have been in the "what's the point" mental state with stable career and good friends and it really throws off more than you think. When you have no goal to look forward to or serenity with the present then spending money feels like the best answer to hold you over.
Humans as creatures aren't actually very good at predicting our own happiness. For a podcast, I like to recommend "the happiness lab" to get some of the science on it. The first season gave me some great insight on things I previously hadn't put much into. Volunteering, for instance, almost universally has a huge return on overall contentment for people. Toss in some readings on Stoicism that influenced MMM and you have a recipe for a very different lifestyle full of serenity without having to distract your way through it. Then all that $ you are saving is for stability of your current state of living rather than some far off goal.
It's much less risky than working every day hoping it will get better. Methinks you know this, which is the scratch you were trying to itch by the original post.
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That's about double what we spend, except we support two people versus one. What's the breakdown?
Rent: 1800
Car: 865
Groceries: 600
Internet: 120
Cell phone: 145
Insurance: 220
Gym: 65
Gas: 50
Apple Music: 10
Amazon Prime: 10
Grooming: 100
Of those I could get rid of Amazon Prime and reduce grooming by 40%. But I don't think $50/month will make a material difference.
May want to do a separate post in the "case studies" forum; that way you have a separate thread to reference.
FYI, that car payment is throwing yourself to the wolves! I'll save further comments for the separate thread!
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That's about double what we spend, except we support two people versus one. What's the breakdown?
Rent: 1800
Car: 865
Groceries: 600
Internet: 120
Cell phone: 145
Insurance: 220
Gym: 65
Gas: 50
Apple Music: 10
Amazon Prime: 10
Grooming: 100
Of those I could get rid of Amazon Prime and reduce grooming by 40%. But I don't think $50/month will make a material difference.
Interesting that the $50/month expense would be the one you'd look at when you have over $1000 in car expenses, eat three people's worth of food, and also pay a shitload of rent. Those would be the obvious things to work on.
I thought you liked to go out to restaurants with friends every week? Does that fit into groceries?
Here's our averages from 2019 for comparison, for two people.
$846 - Rent + insurance on a cheap studio apartment in a walkable area close to work
$814 - Travel, we went to Vietnam, Japan, Vegas, New York, plus weekend getaways
$323 - Food, 80% groceries
$96 - Bills, two phones plus internet
$329 - Misc spending, mostly entertainment/hobbies, cat stuff, and dental work, plus a little bit of public transit and personal care
Total = $2,408, for a lifestyle that's totally in line with us.
Have you ever thought about not necessarily reducing your spending, but just shifting it around so more of it went towards stuff you really like, and less went towards stuff you're less crazy about? Like, if you could rent a place a few hundred cheaper, and funnel that saved money into some pretty epic trips instead? At least you'd get to do the stuff you want to do, even if you're working until old age.
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Very much stuck in the rat race, so to speak. Doing everything "right" but still looking down the pipeline at nothing exciting.
Valens: I second the idea of posting in the "case studies". Maximizing your $ is quite fun in some scenarios, at least once you gamify it.
I also second the idea of trying to delve into the mental rut. Perhaps psychologist isn't out of the picture just to have someone help you find some more meaning. I have been in the "what's the point" mental state with stable career and good friends and it really throws off more than you think. When you have no goal to look forward to or serenity with the present then spending money feels like the best answer to hold you over.
Humans as creatures aren't actually very good at predicting our own happiness. For a podcast, I like to recommend "the happiness lab" to get some of the science on it. The first season gave me some great insight on things I previously hadn't put much into. Volunteering, for instance, almost universally has a huge return on overall contentment for people. Toss in some readings on Stoicism that influenced MMM and you have a recipe for a very different lifestyle full of serenity without having to distract your way through it. Then all that $ you are saving is for stability of your current state of living rather than some far off goal.
It's much less risky than working every day hoping it will get better. Methinks you know this, which is the scratch you were trying to itch by the original post.
I'll take a look at the case studies section. As for happiness, I've been trying to figure out what would make me happy for years. Right before covid hit I decided to just try doing things even if they didn't seem interesting. Unfortunately that got cut short. However one thing I did try was volunteering. I had high hopes for it being a fulfilling experience, but I didn't enjoy it. My girlfriend (who came with me), loved it but I didn't get anything out of it. I thought I'd get some kind of emotional high out of helping people out but I felt nothing. I do feel good when helping out a friend, so the only thing I could figure is I need to know the people I'm helping?
Anyway, figuring out happiness still eludes me. The only thing I can think of is location. The problem with where I live now is, although convenient, it's boring. There's no local dive bar or coffee shop to be a regular in, no sidewalk patio to sit and people watch on. I like to be surrounded by people in a downtown environment. Kinda vague, but it's the best I got at the moment.
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Oh my god that car! It sounds like you know what will make you happy. Say you got rid of the car and spent a few hundred more on an apartment in a walkable area, you would still come out way ahead. And be happier.
I don't enjoy volunteering either honestly. It's still a good thing to find out though, whether or not you enjoy it.
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That's about double what we spend, except we support two people versus one. What's the breakdown?
Rent: 1800
Car: 865
Groceries: 600
Internet: 120
Cell phone: 145
Insurance: 220
Gym: 65
Gas: 50
Apple Music: 10
Amazon Prime: 10
Grooming: 100
Of those I could get rid of Amazon Prime and reduce grooming by 40%. But I don't think $50/month will make a material difference.
To me the items bolded above scream TO BE CUT BY 70-100%. I'll let others tackle the car, but that's obviously your biggest money suck machine.
Our family of three spent <$300/month on groceries pre-pandemic and we're up to ~$400/month now, and that's adding additional meals we didn't cook before plus more meat than usual (one of our vices). There are some great threads here and entire websites dedicated to enjoying healthy yet frugal food.
Internet may or may not be within your realm of control but seems absurdly high to me, especially considering you live in a city. There has GOT to be a better option- is there a lower speed that would satisfy your need to stream video/music and respond to email, etc? We don't get more than 45 Mbps and it works just fine for our household. Another idea is to negotiate a lower per-month bill with your ISP? I have an annual chat with customer service and it saves me $10/month, or $120/year. Takes about 10 minutes. Not a bad hourly rate.
Cell phone- that's outrageous. You have got to find a better plan and/or provider than that. Period. See forums on this topic for ideas.
Gym- you can buy a *really* nice set of weights if you put money into that. There are also plenty of free outdoor workout options. It's my understanding that this is one of your hobbies, so if you feel like you need to keep it, I guess that's OK, but find a way to negotiate that lower. Most gyms will offer a discount if you ask and/or decide to look elsewhere. IMHO if I was the kind to pay for a gym, I'd cap it at a solid $40/month.
And finally, grooming.... Yikes yikes yikes yikes. Yikes. What in lawd's name do you spend that much money on for your body? If it's anything cleansing related I have two words: BAR SOAP. If it's hair (more probable)... I understand guys like to get their hair cut more frequently than ladies like me but holy shit that's just way too much money. Many of us here just get a nice buzzer for like $30 and have their SO's help via a once-a-month buzz/trim. You are spending $1000 (ok, whatever that is in canadian $) a year on literally something that either grows back or can be cleaned with soap.
$1000 saved a year is a week-long getaway (or several if you're frugal about it).
$100/month is equal to something like $18,000 if you contributed that into an index fund and let it grow for ten years.
$100/month is enough to feed eight starving kids / buy six malaria nets / choose-your-own-impoverished-nation-analogy.
To me, it just seems like the epitome of consumer culture to spend that kind of money without much thought and care on something so frivolous as making a body look/smell/feel marginally different. Please do consider doing something that will benefit either yourself or others to a greater extent either now or in the future. Maybe I'm missing something but this one *really* blew my mind.
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I'll take a look at the case studies section. As for happiness, I've been trying to figure out what would make me happy for years. Right before covid hit I decided to just try doing things even if they didn't seem interesting. Unfortunately that got cut short. However one thing I did try was volunteering. I had high hopes for it being a fulfilling experience, but I didn't enjoy it. My girlfriend (who came with me), loved it but I didn't get anything out of it. I thought I'd get some kind of emotional high out of helping people out but I felt nothing. I do feel good when helping out a friend, so the only thing I could figure is I need to know the people I'm helping?
While this gets more into philosophy, you probably won't get lasting luck chasing a happy high. It's not really sustainable (and desirable, really). The goalpost is more attainable if you can be content and find life meaningful.I was using the volunteering thing a bit of an example; it's not that there is a proscribed way for any one person to act. It's varies from person to person (so I hate to tell you what to do). You seem to be yearning to find community in a local scene that you cannot in your current living situation. You may find more luck selling the expensive car, buying an econobox (or no car at all) and spending the $800 a month toward a location that achieves that goal? Maybe have a 2 year and a 5 year plan for where you want to be.
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Happiness is obviously unique to the individual. For me, there are three parts to living a happy life.
1. Absence of things that lead to unhappiness. I don't like commuting, so I plan to be able to walk to work. I ax sucky people from my life. Working weird hours or having toxic coworkers or whatever sucks. I basically just cut out the stuff I don't like from my life.
2. Big happiness boosters. The stuff I love doing the most. Epic travel. Pursuing my hobbies and interests. Quality time with family and friends. Basically, while I don't do this stuff every day, I make sure it happens frequently enough.
3. Day to day stuff. I have a project I call "Four Things a Day", where I shoot to do small things every day in four areas that are important to me. I have a notebook and write them down every day. It keeps my priorities right in front of my face on a daily basis, and has been absolutely invaluable. I've been doing this project for over a year now, and it is really amazing - I totally recommend it. Right now these four things are:
- FIRE - Anything that moves me closer to retirement. Going to work counts. Doing a bunch of meal prep on the weekend counts. Finding a way to save money on something counts. Figuring out how to fix something rather than spend money counts.
- Health - Generally exercise, but doing physio also counts if I need it, or going to the dentist, or whatever. Anything related to maintaining or improving my health.
- Learning - Normally online language courses (Duolingo). Project work counts if I'm doing something new, like following a sewing tutorial or working on a new cooking technique. I did some beginner HTML classes as well. I'd count watching a documentary as well, though I rarely do.
- Home - I like to live in a clean and minimalist home, so this one is on my list to make sure chores don't pile up. I also count things here that are involved with keeping the household running smoothly and efficiently.
So that's my personal formula for happiness.
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Geez, where to start?
1. That car payment is outrageous, you won’t have that forever (you may want to rethink doing something like that again)
2. I think your food is high because you’re a bodybuilder (not sure it will always be that high)
3. As you now know, a large part of the site’s philosophy is around managing your expenses and consumer tendencies in a reasonable way so you get to live, enjoy life, while setting yourself up for freedom on your terms as quickly as possible. If your goal is to work until retirement age, keep doing what you’re doing. If you want to retire before or just want to feel more financially secure, change.
4. Your issues though seem to be beyond money, you’re bored with life. A good job, too,city, girlfriend, great health and body aren’t enough for you right now. You want more but have no idea what more you want or how to get it.
5. My solution? Shake shit up. The world is insane right now, and might be for 5 more years, that’s good, there’s time. So here’s what you do: reduce your expenses, save as much as you can and then quit your job and move overseas. Go to Thailand or South America or wander through Europe. Visit the town Schwarzenegger was born in. Whatever. Get yourself out of your comfort zone and challenge yourself. You want adventure? Live an adventurous life. There’s plenty of remote work you can do to sustain yourself. You’ll be fine and worst case, return to Canada and find some boring job and keep working until retirement like you were going to. Or, open yourself up to world changing in ways you could never expect.
6. There’s only so much we can help you with. Reduce your expenses, your stache will cover more. There’s little value in writing posts where you feel defeated and powerless when you have ever at fingertips to create whatever life you want. You’re smart enough and clever enough to figure this out, so put in the work and reap what you sow.
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Posted in Case Studies here: https://forum.mrmoneymustache.com/case-studies/case-study-valens/
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I clicked on this thread thinking I would find a like minded FI but not particularly in to RE enthusiast.
Instead I found a completely antithetical concept being pushed. Or rather, the same concept most people employ (living paycheck to paycheck) either from being unwise or being hard up.
I hate to pile on, but $130k (even in fake canadian dollars) is a lot of money -- plenty to have very nice things and still work toward FI.
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Because of the virus my adult son moved in and for 3 of us are spending between 550-600 on groceries.