saving 10 lakhs
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Location: Toronto , ontario , ca
Posted on: 15-04-04 12:15:51
I am still waiting for some more reply and hopeful that many people are saving that amount else i would not have been hearing that loud and passionate shouts about positive attitute and positive things about canada.
I am just keeping my fingers crossed and waiting as this thread is just 1 day old.
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Sucess is not an accident it is a result of hardwork with intelligence.
I would say you are wrong on both counts as well a bit confused on what you exactly want to know – I will elaborate on that:
Quote:
Orginally posted by nishitno1
Any one who is already saving that amount of $ 30000 a year ; please remember my question is meant that at what earnings and after a decent lifestyle you can save the amount mentioned earlier.
For Chandresh
If you are earning that amount why shouldn't one opt for house as you get appreciation as compensation for the mortgage intrest and other heat ,hydro etc expenses.
It does not matter whether it is a rented or owned place. With 70k gross you would like to stay in a detached house which for a family of four would need atleast 3 bedrooms. On an average, it will cost you about 300k minimum to buy a decent house. With a down payment of 50 k, your loan will be 250k which at 4% interest will call for a mortgage of about 1,350 and other expenses (hydro, heat, taxes etc.) will be another 450 or so making it a total CASH OUTFLOW OF 1,800. Remember we are presently talking cashflow – and I had taken only 1500!!! This difference of $300 can be treated as your savings in the mortgage payment.
From appreciation point of view, there are two things:
1. It is neither guaranteed nor determined!
2. That is not to be considered as saving out of 70K and it is not reducing your cash flow. Yes it builds up your equity……but by savings did you mean revenue-expenses or did you mean equity growth by investments? So do not confuse the issue and be clear.
Quote:
I would also say 2 cars is needed but then i know Chandresh's son is almost my age so he is giving his perspective ; wheras the family in my mind is A couple middle aged with 2 Kids in thier 5-13 range .so That family can also do with just one car as well ;thats probably a small adjustment that we make.
On the second point, I am old but not that old to have son of your age!!!! He still does not have a driving license, and even if he had one, that is not what I am talking about. If I take my one car to office, and I am making 70 k, do you think it is a pure 9 to 5 job??? No way. So who does your groceries, who takes your children who cannot drive for their project work to friends’ place, who takes them to dance class/basketball game/library. Do you do it all by public transport?? Not if you are earning 70K. You get one more car for your spouse. This is NOT a samll adjustment you have to make in Canada, where public transport is taken only when you cannot afford private, or in circumstances where driving will take you longer than by subway! these do not count when you go for groceries and extra-curricular classes!!
And that is what I said, if you are doing it that way, you are not living the life you could, or perhaps should with that income! Then why did one come to Canada? If the idea was purely to save money and live in difficult conditions, then perhaps you MIGHT be able to save, about 20k or so.
Chandresh
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Chandresh
Advice is free – lessons I charge for!!
Hi all , interesting topic.
i kindof agree with all of you in bits and peices.
it is true that one should not expect to make middleeast type large cash savings from what one earns here, but then one utilizes the money earned to build on things of true value. like education , housing etc.
one question which we have to ask ourselves is ...is bank balance a true indication of a personal growth with time ?
i feel even with 60-70k income , if one spends smartly one can make money grow with time.
As for the question of renting Vs buying, buying is always a clear choice if one has 15 yrs at hand and stable source of income.
Consider this, a person i just came to know bought in 1989 a 200k house in markham ...last year he paid off his mortgage the and value of his house now is 650k...now every area does not show this type of growth but one has to make some good judgements .... taking into account inflations and the interest he paid over his mortgage ...he still has more than twice the value for his investment over time.
he is 45 yrs old and earns 70K, with about 20yrs of career ahead of him....he can buy another house/condo and payoff and let it grow and by the time he retires... he can sell it at appreciated value and retire.
this with only one member earning ...if both work then one can really save a good chunk and to top it off one can do all this by being a citizen of the land ...there are many people in middle east working for many years saving money alright but also keep worrying when they might just have to leave .
that is why i feel that the value of wealth built in canada/usa is far greater than what one saves in cash in middleeast/SEasia ....even tho the cash savings seem much less here
i agree with chandresh ...like any investment nothing is a guarantee and and there are many ifs ,,...but the key is to make a good judgement call earlyon and buy a property to start building value for yourself instead of wasting time and money in renting an apartment which will never be yours.
thats how i feel ...many may disagree.
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What can be imagined, can be achieved.
Quote:
Orginally posted by chandresh
That is when even after earning a good salary, you live lower middle class life. According to me, two cars will cost you a minimum of $1000 per month (lease, insurance and running cost), and house/apt rent with all related expenses minimum 1,500 per month.
!
i would tend to disagree.... lower middle class life after spending $1500 on apt rent ?... what size apt are we talking about ?
for 1500 you can get the best 1br or even 2 br apt in downtown toronto not even suburbs....
if you rent 3 br apt you might have to go higher than that for a good bldg or locality...but if you are at a stage of needing 3 br apt ...you might be better off buying a condo or a house ...because putting in 1500+ every month into someone else's pocket for rent ..., doesnt sound like the right thing to do.
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What can be imagined, can be achieved.
Quote:
i would tend to disagree.... lower middle class life after spending $1500 on apt rent ?... what size apt are we talking about ?
for 1500 you can get the best 1br or even 2 br apt in downtown toronto not even suburbs....
if you rent 3 br apt you might have to go higher than that for a good bldg or locality...but if you are at a stage of needing 3 br apt ...you might be better off buying a condo or a house ...because putting in 1500+ every month into someone else's pocket for rent ..., doesnt sound like the right thing to do.
Well each has his perspective of lower middle class perhaps. When I came to Canada and saw the apartments which rent for about 1000-1200 per month, I almost decided to leave the country immediately - because the peple told me that these are some of the best apartments - and I was used to living in much better apartments in Singapore/Indonesia.
I consider my self as a middle middle class (not a higher middle class), and I live in an apartment which rents for 2,200 per month and I have to pay another 50 bucks for an additional car park and 30 for cable! By the way, remember as per Ontario rules, a family of 4 with even 1 child over 12 (if both children are of different sexes) has to live in a minimum of 3 bedroom apartment.
If it were a house, it would mean a house for 1200 and other expenses of about 300.
And if were living in an apartment of 1500 per month, I would not think of buying a house or apartment, since after paying $500 in maintenance, and 250 in property taxes, it would leave only 750 for me for my mortgage, which is not enough!
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Chandresh
Advice is free – lessons I charge for!!
Location: Toronto , ontario , ca
Posted on: 15-04-04 17:23:40
As always i am really by chandresh's perspective and i agree with him tha deceptive but still a indicator.h might be one needs 2 cars in this country .
tough i am to an extent dissatisfied with his ans on investment ; there are factors like inflation and appreciation over previous years on the value of land which might be deceptive at times but still a indicator.
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Sucess is not an accident it is a result of hardwork with intelligence.
OK...here are the facts...a salary of C$70K gives you an average net home take income of approx C$3300 pm after deduction of taxes, CPP, and EI. The living costs would depend a lot on where you live. In smaller places like Hamilton/Windsor/London, C$900 to a $1200 could get you a fairly decent 2br apartment and that includes utilites. Buying a house is not always the best choice unless you are in a position to make a decent downpayment(at least 25%). Getting a house with 5% DP is not wise. The interest component is substantial and paying a lower rent at an apartment you could save this interest to build capital. Unlike what has been the norm in India, the real estate prices here have been both up and down. And of course remember, your house is an immovable asset with no fluidity. It is only a concept in the mind that you own the house and cannot therefore be compared to capital. And you also pay property tax when u own a home and that is not a small amount either + hydro +heat. On top of all this, it is suggested that you put away at least C$2000 per year towards maintenance and upkeep. Repair costs here are pretty steep. The minimum that you shell out for a call to any skilled worker e.g plumber, electrician, furnace, painter, mason...whatever, will be C$60+ and then you will be charged by the hour plus parts. So unless you are one of those who is at least somehwat inclined to be all these rolled into one and ready to do the dirty your hands, you'd be better advised to stay away from buying homes. While it is nice to own a home since it is also something nice to write home about, remember it is a big liability too. One leakage in the basement and and you could possibly come under a couple of thousand dollars! And don't forget the lawn mowing and snow shoveling! Trust me...while lawn moving is not too bad, though it does get quite taxing when it looks like the grass grows right behind you as you mow, snow shovelling is detestable, especially when the municipal snow plough piles up all that snow on the side of the road blocking your driveway. One solution to this is of course to send your wife to the gym and keep her in shape to give you a helping hand, else have lots of kids and give each of them a shovel for their birthdays!
Coming back to expenses, after paying for the rent, you pay for lots of other things. Let's talk of a few and see how it all adds up:
Phone: C$100 to 150 depending on many relatives you and your wife have to call back home.
Internet: C$50(I am rounding off please)...assuming you do not want to spend hours gawking at your blank monitor screen surfing with a dial up connection.
Car Insurance: $100 to $200 depending on whether your car carries you or you carry the car.
TV: $100 again depending on whether you want to watch the weather forecast or are looking for movies too.
Gas: $150 to $300 depending on how far from home you work and where else you go in your spare time.
Tuition fees: $200 ..put this money away even if your kid is not going to college/university. He/she will and they will need it. Although it is looks like a saving at this time perhaps, but actually it is only a deferred expense.
Car maintenance : C$10 to C$100 pm depending on whether your car is a car or a set of components stuck and screwed together to look like one.
Khana pina: $500 - $700 depending on how much you like to entertain and get entertained.
Ok I think it is time to add up unless I have missed something important:
The total come to approx. C$2500 considering a rent of $1000. If you have a house that asks for a mortgage + taxes, I think the total will be more like C$3000. That leaves you with approx C$300 pm. Times 12 that is C$3600. I will be generous and round it to C$4000. And that in INR is more close to 1 lakh than 10 lakhs....and even if you save that, one trip to India with the family, what with the gifts and all, don't be surprised if you start reading the flyers encouraging you take the famous LOC( Line of Credit)....
Makes sense??
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wisernow
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