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.