Trevor Abes: Writer

Tag: financial goals

Young Canadian Investor #24 — What Are Your Major Life Goals?

As a youngin’, you may have not extended your life far enough into the future to think about stuff you’d want to buy then you need to save for now. You’re already familiar with what’s on most people’s lists.

  • A house
  • A university degree
  • A car
  • Starting a business

You could also buy yourself the ability to start a family, retire at 50 years old, or live in a different country every six months. The dream is yours and there are no limitations on it beyond the confines of your imagination.

The point of this post is simply to get a ballpark number in your head so you know what you’re aiming for.

  • According to Zoocasa, the average house price in Toronto was $1022138 as of June 2020.
  • A university degree will run you anywhere from a few thousand to $15000 per year depending on where your passion lies. There’s a list of University of Toronto tuition fees here on page 10.
  • A new car will run you, say, $20000, with a decent used one costing you half that or less depending on what it’s been through.
  • You could start a business for no money if you have the skills and a free way to share them. But if you need things like a physical location, inventory, or a paid marketing campaign, the number could easily reach tens of thousands of dollars.
  • When it comes to raising a family, you’re looking at about a quarter million per kid for the first 18 years.
  • If you want to retire at 50, suppose you’re going to live until you’re 100 to be conservative and multiply your current income by 50. If you multiply 50 by $20000 you get one million dollars.
  • Last but not least, country-hopping every six months in on a whole other level of living your best life. You could probably reduce expenses to the cost of travel and renting a place to live with the right logistical prowess.

Ok, so now that you’ve put numbers on your goals, how can you help yourself reach them?

Number one is maximizing your human capital, or your ability to learn new skills and thus increase your potential earning power. As a young person, you have the time to learn, consolidate your passions with educational credentials, and set yourself up for a financially stable rest of your life.

Number two is investing for the long term in a portfolio of stocks and bonds, which will grow your money for you on its own, without you having to work for it, and basically act as an additional source of income. The world of investments can be a scary place to make sense of, but it certainly does not have to be. If you’ve been looking for a nudge to get yourself started and saving for the major goals in your life, check out my new investing guide for young Canadians.

I’m also available to teach you 1-on-1 over Zoom if you prefer.

Feel free to start this Young Canadian Investor series from #1 and see if it has anything to offer you.

Feel free to drop any questions in the comments!

Disclaimer: This article is meant for general education purposes only. It does not constitute financial advice as I am unaware of your personal situation. Consult with a professional who abides by a fiduciary standard before making any investment decisions.

 

Young Canadian Investor #19 — The Cons of Financial Independence

For the purposes of this article, I’ll say you reach financial independence when you have enough money and/or investments to cover your expenses without ever having to work again.

It’s an important goal for a lot of 9-5ers who work decently-paying jobs that don’t mesh with how they’d like to spend their time. Maybe they want to be with family 24/7, maybe they want to travel all the time, maybe they want to write short stories all day and submit them to literary journals. It’s whatever makes you feel like you’re living the life you want, with the caveat that you should be realistic and thoroughly assess how close you can get to it. Here’s why.

  1.  Financial independence can become an overwhelming, all-or-nothing proposition. One where you give up a disposable income and with it any prospect of having fun for its own sake so long as you can save more money. And maybe you’re genuinely interested in travelling down this frugal road, exchanging nights out for pasta and cheap wine at home because you know that in 5-10 years you’ll have saved enough to free yourself from the daily grind. You should know, though, that there’s no point in saving half or more of your income if you’ll have to do it for decades to reach financial independence. In this case, there’s something to be said for investing less and living a little now instead of waiting until you’re 50.
  2. You need to have a clear sense of what to do with your hard-earned independence. Once you hit your magic number and have enough to support yourself forever more, how are you going to spend your time? It’s easy to get caught up the the thrill of the journey without giving due consideration to what you need to do to look back proudly on your life. Would you paint a new canvas every day? Dive into research projects that’ve been on the backburner for too long? Would you open up a coffee shop, source all your ingredients in ethical ways, and serve your community in a way you can be proud of? Your answer can change, and often, you just need to get a handle on what gets you out of bed in the morning.
  3. It’s not impossible to be fulfilled while holding down a 9-to-5. This entails finding a job you don’t hate or merely tolerate, one where you still have energy at the end of the day to go out, see people, and live a well-rounded life. There is nothing wrong with working for the next 40 years so long as it adds value to your waking hours, so long as it gives you a sense of purpose that makes you feel alive. Under this scenario, investing your money is still a must, but you can feel free to put less of your paycheck away knowing you’re comfortable working into old age. What would this ideal job be for you?

In the end, financial independence is a lifestyle choice, one that mostly appeals to people who value the freedom to do as they please day to day. If you’ve been searching for a short book to help you invest your money so you can get closer to tasting that freedom, my new effort is for you. It’s called Nine Steps to Successful Investing: A Guide for Young Canadians. In no more than an afternoon, it’ll give you the tools you need to invest prudently in the world’s stock and bond markets through index funds and fulfill your long-term financial goals.

I’m also available to teach you 1-on-1 over Zoom if you prefer.

Feel free to drop your questions in the comments!

Disclaimer: This article is meant for general education purposes only. It does not constitute financial advice as I am unaware of your personal situation. Consult with a professional who abides by a fiduciary standard before making any investment decisions.

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