[ShepherdsDog]

most people are all about short term gratification over long term fulfilment. And, as you pointed out, the more money most make, the more they usually spend... rather than save.

If you were comfortable living on 2 grand a month and suddenly you have 2500 a month for disposable income that means you should save(long term) at least 350 more a month. Put aside the other 150 a month and buy yourself something nice at the end of the year, like a new TV, trip, hobby material, furniture/appliance or computer. I usually set mine aside for Christmas gifts or mad money.

[Yogi]

In the vast majority of cases, it's 'wants vs needs' with 'wants' usually taking precedence. As Shep noted; 'Instant gratification'!
I've always been one to 'make due with' rather than always feeling the need to have 'the biggest, newest, shiniest,fanciest, etc. All of my family are fairly well travelled while I have been content with a few trips to the continental U.S.A. and around Western Canada. They are all still paying off mortgages. I'm not! Now, as they content themselves with a week or so in a warmer clime during the winter, I usually stay home all winter, warm & cozy, puttzing around, working on the house, sleeping in or just laying around reading/puter. not even plugging in a vehicle until I know that "In a few days I guess I should go into town and buy more groceries"! No, I'm not totally retired, but I do get to decide 'if and when' I will work, picking & choosing the jobs I want. Not bad for a middle age 'blue collar' worker,eh!

[andyt]

CDN_PATRIOT CDN_PATRIOT:

I dunno. I budget well, don't spend recklessly, and still can't save hardly anything. I do contribute a small amount from my paycheck to my RRSP, but an extra three months set aside in case of emergency? Yeah right. Maybe if taxes weren't so freaking high, I could save more. They way I'm going, there won't be no retirement.

-J.

You do realize that if you only have minimal RRSP's when you retire, they will actually work against you, right? You'll have to withdraw them as income and that will be deducted from any OAS you might receive. People with little private retirement savings are better off not contributing to RRSP's because they will just have to use that money instead of getting a govt subsidy. Of course you could feel morally good about it, but you won't be any further ahead than the guy who spends it all during his working days and sucks off the govt tit for retirement.

[Tricks]

Most people don't realise that putting even 100 bucks aside a month into a decently high interest investment is going to yield stupid numbers. Especially if they do it from my age. Assuming 10% return.
Year 1 1200 + 120 = 1320
Year 2 1320 + 1200 = 2520
2520 + 252 = 2772
Year 3 2772 + 1200 = 3972
3972 + 397 = 4369
year 4 4369 + 1200 = 5569
5569 + 556 = 6125
year 5 6125 + 1200 = 7325
7325 + 732 = 8057
Year 6 8057 + 1200 = 9257
9257 + 925 = 10182
year 7 10182 + 1200 = 11382
11382 + 1138 = 12520
year 8 12520 + 1200 = 13720
13720 + 1372 = 15092
year 9 15092 + 1200 = 16292
16292 + 1629 = 17291
year 10 17291 + 1200 = 18491
18491 + 1849 = 20340

Ten years, 12000 put in, 8000 made in interest. Putting these figures into a calculator and seeing 40 years down the line (1200 a year, 10% interest, monthly interest payments) it comes out to 632,407.96.

[ShepherdsDog]

I know a few 'retired' couples who have moved to some tropical locations to make their pensions go further. What is just getting by in canada will allow you to live quite comfortably in Malaysia, Thailand, Indonesia and several other SE asian locales....mind you, you have to put up with the chaos of living there.

[Regina]

Tricks Tricks:

Most people don't realise that putting even 100 bucks aside a month into a decently high interest investment is going to yield stupid numbers. Especially if they do it from my age. Assuming 10% return.


Ten years, 12000 put in, 8000 made in interest. Putting these figures into a calculator and seeing 40 years down the line (1200 a year, 10% interest, monthly interest payments) it comes out to 632,407.96.

Although it is still a great idea to do that, 10% may be a little on the high side considering the recent market history. There also % fees that could apply which will further reduce that number. Still a great idea though.

[Brenda]

High interest is also high risk.

[Lemmy]

ShepherdsDog ShepherdsDog:

most people are all about short term gratification over long term fulfilment. And, as you pointed out, the more money most make, the more they usually spend... rather than save.

That's a perception, not reality. Marginal propensity to save increases as income increases. So, while people certainly spend more dollars as income goes up, the percentage of total income spent goes down and the percenctage of total income saved goes up. Mike Tyson is the only exception to the rule I'm aware of.

[Caelon]

Although the rates are high Tricks has the right idea. Using a more modest 6% If a person saved $100 per month from 25 to 35 years of age and stopped at the end of the ten years and investing $12000 they would have a little over $16,000, But if they leftr the money to just sit there until they were 65 they would have almost $100,000. Another person starting at 35 and investing $100 a month until they were 65 would invest $36,000 and would end up with $100,000 as well. If the first person did not stop at 35 they would have $200,000 at 65. To have the same money the second person would have had to invest $200 per month. It just shows the longer we procrastinate to save for our future the more money it takes.

[Yogi]

I have been doing the 'hundred dollars per month', from each account, for several years. Sure is nice to read the quarterlies!

For 'pissing around money', every night ALL my pocket change goes into a Texas mickey. That gets used for gas and repairs for go-karts, boats-fishing stuff etc.
Also, each spring I start out with $500-$1,000 'investment from self' and buy & sell from local ads. So far this year, I am 'up' 2 complete boat rigs, a flat deck trailer for hauling my quad & scooter- ( the quad is a 'freebie' from last year), a complete new 'campers set-up' (which I hope to divest myself of soon ), a truck camper, an older 5th wheel trailer which I now use to store gokarts and quad...

It really doesn't take much money, to make money!

[Brenda]

Lots of people can't afford that $100/mo. It's 4 days of food.

[Yogi]

Brenda Brenda:

Lots of people can't afford that $100/mo. It's 4 days of food.

I agree that for some folks, 'the money just isn't available, but for the most part people need to re-evaluate their life-style choices. Since you mentioned 'food' Brenda, next time you are at the supermarket, just take a look into other peeps shopping carts, and maybe yours as well. How much of their purchases are acually necessary? X's that x 4 weeks, how much $$$ could really be put into savings/investments?

[Tricks]

Regina Regina:

Tricks Tricks:

Most people don't realise that putting even 100 bucks aside a month into a decently high interest investment is going to yield stupid numbers. Especially if they do it from my age. Assuming 10% return.


Ten years, 12000 put in, 8000 made in interest. Putting these figures into a calculator and seeing 40 years down the line (1200 a year, 10% interest, monthly interest payments) it comes out to 632,407.96.

Although it is still a great idea to do that, 10% may be a little on the high side considering the recent market history. There also % fees that could apply which will further reduce that number. Still a great idea though.

The one I just went into (and keep in mind this is only one, most people would have several) Has 10% in the last year. That's not an outrageous percentage, and is considered moderate growth, at least according to RBC

[Tricks]

Yogi Yogi:

Brenda Brenda:

Lots of people can't afford that $100/mo. It's 4 days of food.

I agree that for some folks, 'the money just isn't available, but for the most part people need to re-evaluate their life-style choices. Since you mentioned 'food' Brenda, next time you are at the supermarket, just take a look into other peeps shopping carts, and maybe yours as well. How much of their purchases are acually necessary? X's that x 4 weeks, how much $$$ could really be put into savings/investments?

Agreed. You'll also find most people think they can't afford it, but if they were to deposit that first before doing anything else (pay yourself first) they wouldn't miss it.

[Brenda]

Tricks Tricks:

Yogi Yogi:

Brenda Brenda:

Lots of people can't afford that $100/mo. It's 4 days of food.

I agree that for some folks, 'the money just isn't available, but for the most part people need to re-evaluate their life-style choices. Since you mentioned 'food' Brenda, next time you are at the supermarket, just take a look into other peeps shopping carts, and maybe yours as well. How much of their purchases are acually necessary? X's that x 4 weeks, how much $$$ could really be put into savings/investments?

Agreed. You'll also find most people think they can't afford it, but if they were to deposit that first before doing anything else (pay yourself first) they wouldn't miss it.

All my purchases are necessary. Healthy food choices, household needs that do not give the kids a rash...

I'm sorry Tricks, but I pay my family first. What is left at the end of the month will go into a savings account. But a roof over their heads and making sure we won't get cold, dark or hungry is priority #1.