#FinancialAdvice #InvestingTips #MoneyManagement
Hey everyone! 💰🤔 So, I’m in my early 20s, living at home with minimal expenses, and bringing in some decent cash through content creation. But here’s the thing – all this money is just sitting in my chequing account. I did invest a bit in XEQT and it’s doing well, but I know I can do more with my money.
Here are a few thoughts on what I could potentially do with my money:
– Should I set aside a percentage of my income for regular investments like XEQT?
– What about opening other types of accounts to diversify my investments?
– Any specific advice on how to make the most of the money I’m earning?
I’d love to hear your suggestions and insights on how I can make my money work harder for me! Let’s start the conversation and help each other out. 💡💪
Max out your TFSA. Save an emergency fund. Even though you have no expenses now, they will eventually come so have about $20k in a high yield savings account. Do the 50-30-20 rule but since you’re young and have no expenses, let 50% be savings and investments then 30 and 20 for your needs and wants. Open a FHSA account and max it out. If you end up not using the money to purchase a home in 15 years, you can roll it over to your RRSP.
Start with your emergency fund base on your living expenses. I imagine you don’t have a lot of these. I’ll explain things in general though. These are things that you cannot avoid regardless if you lose your source of income. For example, groceries, rent, etc. since those are necessary to live. Netflix, gym membership, etc does not belong here since you can easily stop those when you lose your income/job. What I do is I multiply my living expenses by 3-12 and keep that amount on my chequing account. So for example if your living expenses is 1000, you can keep 3000 – 12000 on your bank account. In case you have a sudden need for it. If you accidentally spend this, just make up for it the next time you get paid.
Next, whatever remains I’ll suggest you invest on index funds in the long term QQQ and VOO. You decide the split. Total world VT is also good if you don’t want to put all your trust in the US. If you want the canadian equivalent, you can search around
Max out your TFSA, invest into stocks that pay dividends and cant go wrong with stocks in FAANG or the Big 5 banks.
Set up a tax-efficient strategy, consider RRSPs and mortgages don’t exist at 20
What my 19 year old has done maxed out First Time Home Buyers contribution set up by the Trudeau govt and now he is going to max out his TFSA contribution. My oldest has chosen to max out his RRSP contribution, he is 23.
Prozzies.
Honestly though, how do you guys make a 100k a year and still leach off your parents? Christ I was on my own at 15 working night shift at a YMCA.
What you should be doing with your money is moving out and paying them back.
!stepstrigger
Max out TFSA (ETF investing is my way, XEQT all the way)
Max out FHSA
Contribute to your RRSP
Open up a HISA (Wealthsimpe you could get minimum 4% right now)
In that order would be my suggestion. Passive and quite a conservative and easy approach.
Keep minimal money in your chequing account and constantly deposit everything into the HISA as you get payed.
listen to everyone here BUT some alternative mentions
if your 20 and havent gone to school – you could have your parents open up an RESP for you (check local requirements) – then have them deposit some of your money into it in case you ever want to do a degree or diploma later
Make sure you have your tax obligations set out if you havent already – if you are working for yourself, it will likely make sense to incorporate, and pay yourself just enough to max out your TFSA, RRSP and CPP (around 60-70k should do, then you can use your corporation to invest back into your business and diversify your revenue and shelter yourself from taxes.
I would personally max out registered accounts including the new fancy home buyer one, give yourself like $1000 of spending money and use the rest to grow the business or learn future skills for when your tastes change
(I worked for myself from age 18-25, and again from 29 to now – lots of lessons and oopsies learned because of laziness and lack of knowledge)
Take a couple months off and backpack around SE asia. Seriously do it.
I recommend start contributing to your TFSA until you max it out. I wish I’d done that sooner.