Quote:
Originally Posted by Jason14h
This is why it is so important for young people to start saving and making hard decisions with money and investing at a young age. Have some capital available when they are 25.
Going to our Avacado example, cutting out $10 in Starbucks and Avacado's a day and invsting/saving from the age of 18 until 25, at a RoR of 7% would yield $40K by age 25. Theres the house down payment.
The problem is people don't save, and then at 30 will have a very difficult time.
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Here's the problem with saving. When inflation is out of control, inflation outpaces the savings.
Also, as previously stated, the cost of living is far greater than it has been over the last 30-40 years. Saving is much harder than it used to be. The average young person does not spend $10 on coffee.
Also what investment besides real estate pay an average ROI of 7% per year guaranteed? The TSX has been flat for the last 2-3 years, while inflation has increased dramatically. Wonder if those low interest rates have anything to d with that?
Basically your advice is that if a young person was to:
1. forgo any small pleasantries
2 save all of their money, despite an abysmal job market and the need for post-graduate studies to get anywhere
3. invest it at a rate of return that will dramatically exceed historical averages and ignores present interest rates
4. enter the market at the exact right time
They just may be able to afford a hovel somewhere....after they graduate at the age of 25...work another 5 years to pay off student debt, begin the saving process, and then get a downpayment together.
You can't admit that's drastically different landscape than the one people faced 30 years ago?