2 weeks Ago
iStockPhoto / Getty Images Name, age: Terry, 49 Annual income: $133,200 Debt: $0 Savings: $3,000 in savings account, $204,000 in tax-free saving account (TFSA), $1.5-million in registered retirement savings plan (RRSP), $28,000 in first home savings account (FHSA), $974,000 in taxable investment accounts What she does: Software consultant Where she lives: Vancouver Top financial concern : “Living for today and not hoarding wealth. People worry about running out of money, but they do that at the sacrifice of living for the present day.
” Terry and her partner, who have been together since university, have always been good savers. Even so, they realized quickly that home ownership in Vancouver, where real estate prices are among the highest in the country, would be a challenge. “In the first five years of our career, we found the rate we could save couldn’t keep up with real estate prices,” says Terry.
“So we just kept saving.” By their early 30s, they had grown to like the renter lifestyle, with its lack of home maintenance and yard work. They committed to being lifelong renters and focused on growing their money in other ways, and to a lifestyle that felt increasingly affordable as they moved up in their careers.
“Our salaries kept increasing while our living costs stayed fairly stable,” says Terry, whose two-bedroom condo in downtown Vancouver costs about $3,300 monthly in rent. She says being renters and not having children has allowed them to focus more on their careers. Without the need for the stability required to pay a mortgage, they had more flexibility to change jobs and less fear of what would happen if it didn’t work out.
Moving jobs frequently helped both of them increase their salaries faster than if they’d stayed with one company, Terry believes. Now, both are well-paid technology workers in their late 40s. Terry’s partner brings in about $20,000 a month and the couple is sitting on multiple millions in savings and investments.
About seven years ago, a financial adviser told them they’d likely hit $5-million by age 58 and that would be plenty for the rest of their lives. Terry thinks they might hit it early. Their financial comfort has her thinking about starting a new chapter: She has several hobbies and interests that she’s considered making into her new career.
She plans to avoid looking for a new contract when her current one ends. “I am conscious that I might be aging out of technology,” she adds. She and her partner have created wills that will give away their remaining money when they die, but Terry is also conscious of trying to live more in the moment now that she knows she can.
“Some people save, save, save and wait until they can retire at a traditional age, but by then maybe they are not in good health, or their social circle may have diminished,” she says. “We want to find the balance.” Their typical monthly expenses: Terry’s investments and savings: $3,500 $250 to savings account $583 to TFSA $2,000 to RRSP $667 to FHSA.
“Additional tax-deferred contribution room since our RRSPs are maxed out every year.” Servicing debt: $0 Household and transportation for both: $4,110 $3,312 to rent $105 to renter’s insurance $125 to utilities $112 on gasoline $113 on car insurance $137 on car repairs $49 on transit $107 on cell phone $50 on internet Food and drink for both: $2,253 $596 on groceries $1,369 at restaurants $288 on alcohol Miscellaneous: $9,607 $2,653 to income tax and Canada Pension Plan $219 on going out. “Concerts, movies, shows” $28 on streaming services $17 on Spotify $710 on clothes $239 on cycling.
“New bike” $148 on gym membership $713 on cats. “Senior cats (10+ years of age). They are on special diets.
Last year, they each had two vet checkups and they each had dental cleanings and dental extractions.” $253 on hobbies. “Books, games, musical instruments, electronics, software” $82 on haircuts $28 on cosmetics $261 on personal services.
“Spa, facials, massage therapy, physio” $166 on dentist $94 on dentist $2,600 on travel. “Business-class flights, hotels, food, all inclusives, shopping” $43 on donations $581 on gifts $135 on life insurance $213 on long-term disability insurance $125 on critical-illness insurance $299 on accountant and other professional fees This profile is a snapshot in time of this person’s finances. Some details may be changed to protect their privacy.
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