I thought that a follow up post to the Gross Income and Savings Rate poll was needed as the poll generated a lot of buzz.  The poll asked what reader gross incomes were and their savings rate relative to that income.  With over 1200 readers participating in the poll, there was a lot of data to interpret which regular reader DAvid was happy to oblige.

The table below shows the income ranges along with the savings rate for that income range.  It turns out that MDJ readers make above average income with higher savings rates. What I found most interesting about the table was that the group with income between $101k – $130k saved the least and that a large portion of the respondants reporting savings of between 11%-20%.

Savings 0-5% 6-10% 11-20% 21-30% 31%+  Total  % of Total
35k – 55k 28.49% 17.74% 20.43% 11.83% 21.51% 186 15.50%
56k – 75k 12.50% 21.59% 26.14% 25.00% 14.77% 176 14.67%
76k – 100k 14.17% 15.38% 28.74% 23.48% 18.22% 247 20.58%
101k – 130k 35.39% 20.58% 10.70% 18.52% 14.81% 243 20.25%
131k – 180k 7.73% 13.40% 37.11% 19.59% 22.16% 194 16.17%
181k – 250k 5.38% 12.90% 30.11% 21.51% 30.11% 93 7.75%
251k+ 0.00% 14.75% 21.31% 13.11% 50.82% 61 5.08%

Here are some more observations from DAvid in comparison of the average Canadian family and MDJ readers:

16% of Canadian family incomes are below $35,000
0% of MDJ incomes are below $35,000

34% of Canadian family incomes are below $55,000
Only 15.5% of MDJ incomes are below $55,000
This showed an interesting disparity in savings — some, as many would expect, saving little, but an astounding 21.5% claiming to save OVER 30% of income.

About 16% of Canadian family incomes are between $35,000 – $55,000
About 15.5% of MDJ incomes are between $35,000 – $55,000 (may include some less than $35,000)

About 16% of Canadian family incomes are between $55,000 – $75,000
About 14.7% of MDJ incomes are between $55,000 – $75,000

50% of Canadian Families earn less than $75,000 annually
30% of MDJ readers earn less than $75,000 annually

About 17% of Canadian family incomes are between $75,000 – $100,000
About 20.6% of MDJ incomes are between $75,000 – $100,000

33% of Canadian Families earn more than $100,000 annually
47% of MDJ readers earn more than $100,000 annually

About 13% of Canadian family incomes are between $100,000 -$130,000

About 20.25% of MDJ incomes are between $100,000 -$130,000
These are the poorest savers of MDJ readers, with over 35% saving less than 5% of their income. This group may include families with Defined Benefit Plans (two bachelor degree wage earners in most government jobs would fall into this category.)

About 10% of Canadian family incomes are between $130,000 – $180,000
About 16.2% of MDJ incomes are between $130,000 – $180,000

About 4% of Canadian family incomes are between $180,000 – $250,000
About 7.75% of MDJ incomes are between $180,000 – $250,000

About 3.3% of Canadian family incomes are over $250,000
About 5% of MDJ incomes are over $250,000

What are your thoughts on the poll?  Did the results come out as you expected?


  1. Traciatim on October 11, 2010 at 9:45 am

    I didn’t have any idea on the income distributions, but the fact that the more you make the easier it is to save is pretty apparent and exactly as I thought it would be.

  2. SavingMentor on October 11, 2010 at 10:10 am

    I guess this falls in line with what you would expect. Those people who are interested in personal finances and read this blog have higher average incomes.

  3. guinness416 on October 11, 2010 at 2:01 pm

    Well, the people I know who are sub $35k and thereabouts don’t have access to blogs during their coffee breaks at work – restaurant staff, factory workers, childcare, etc – so wouldn’t be reading MDJ. Some of them do care about personal finances though. My brother- and sister-in-law (career restaurant host and waiter) don’t make much but are naturally fantastic with money and despite living in what’s regarded as an extremely expensive city and having a kid they have a savings rate and discipline that puts me to shame.

  4. Chris Tringham on October 11, 2010 at 2:48 pm

    Very interesting findings. The unexpected low savings rate for the 101k-130k is certainly an anomaly. My first thought was that the number of respondents wasn’t large enough and therefore a sampling error was to blame.

    I guess the overarching conclusion is that MDJ has a a very wealthy reader base, and I’m sure Frugal Trader will now be able to use this data to jack up the advertising rates!!

  5. DAvid on October 11, 2010 at 8:45 pm

    Many in the hospitality industry do not disclose their actual income, even to their closest friends. Many actually have no idea of their actual annual income is, as they keep no accounting of it. This invisible income can make savings rates seem very high.


  6. Millionaireby45 on October 11, 2010 at 9:24 pm

    The one issue I have with this pole is that it omits age. Age plays a huge factor in savings. A 27 year old that just completed his MBA and is making $120,000/year will have a very low savings rate because he may have lots of student loans, just bought a new house, just got married and has his first kid, ect. A 60 year old that makes $120,000 may have a very high savings rate. He probably has no mortgage, his kids are moved out, he has no student loans, ect. With such a small sample pool, and without knowing the respondents age, I don’t think we can draw many conclusions.

  7. FrugalTrader on October 11, 2010 at 9:48 pm

    That’s a good point. The last time I had a poll about age, I believe most of the readers were between 25 and 45.

  8. DividendMan on October 12, 2010 at 12:36 am

    I participated in this poll, am in my late 20s and am single. I wonder how many of the respondents votes were single income and how many were dual (or more) income – that can make a big difference!

  9. Sampson on October 12, 2010 at 10:41 am

    Quick glance shows bimodal distribution of savings rates. This tells me that perhaps the actual magnitude of savings doesn’t change much for those earning $50-$100k, so maybe it tells us that there is an ‘average’ lifestyle people try to achieve.

    Once that lifestyle is attained, people will tend to save more, hence the higher savings rates in those with >$100k incomes.

    Another observation, MDJ readers clearly could be even more productive in their work lives, we earn and save more, yet spend countless hours on this site (we must all work for the government) ;)

  10. noMortage35 on October 12, 2010 at 11:31 am

    My goal (and my wife’s) is actually to pay off our mortage by the age of 35 – would doubling your mortage payments be considered a type of savings? In my mind, yes.

  11. DAvid on October 12, 2010 at 12:27 pm


    Only if you consider your home to be a savings pool, OR if you actually place the interest you save by double-ups into savings. Thus if you saved $100,000 in interest over the years by making prepayments, you’d actually have to put that money “in the bank” at some time to call it savings.


  12. Mike on October 12, 2010 at 1:51 pm

    “0% of MDJ incomes are below $35,000”

    No, there was no option for incomes below 35,000. Still not sure why exactly either…

  13. bob on October 12, 2010 at 3:10 pm

    Only if you consider your home to be a savings pool, OR if you actually place the interest you save by double-ups into savings. Thus if you saved $100,000 in interest over the years by making prepayments, you’d actually have to put that money “in the bank” at some time to call it savings.

    To repeat from the last thread, I have to disagree, and ask you to again think about the following though experiment:

    Three people with identical salaries buy identical houses.

    Alfred chooses a lower monthly payment of $1500/month (longer amm.) but uses prepayments to increase his monthly payment to $2000/month.

    Bob chooses a higher monthly payment of $2000/month (shorter amm.) with no prepayments.

    Cal chooses the lower monthly payment of $1500/month, and puts $500/month into savings.

    Alfred and Bob both pay identical amounts and so pay their house off on the same date, while Cal will have a mortgage for a much longer period of time.

    According to you only Cal is a saver? Despite the fact that he maintains debt while the others don’t?

    It seems to me that if the mechanical act of putting money into a savings account is all that is needed to be a “saver”, then you are measuring the wrong thing. It has to be about net worth, does it not?

  14. Michelle on October 12, 2010 at 4:57 pm

    Are the savings amounts a % of gross or net income?

  15. Financial Cents on October 12, 2010 at 8:34 pm

    Very interesting indeed! Not surprisingly, FT has a very wealthy and overall, well-educated reader base.

    Yes, in the future FT, please do an age survey. The results would be interesting as well.

    Heck, keep going, maybe you can replace the long form census? :)


  16. DAvid on October 12, 2010 at 10:36 pm


    “According to you only Cal is a saver? Despite the fact that he maintains debt while the others don’t? “

    Please read what I wrote more carefully. Your three examples do not address my comment, which stated you need place the money you save on the interest in the bank, to achieve any savings. OR you need to be one of those who consider a dwelling to be a forced savings plan.

    At the end of the mortgage payment, Cal is the only one with any savings. Whether his was the most prudent route or not is another question.

    To extend your example:
    DAvid uses the proceeds from the sale of his house to pay for the extended care he receives at the nursing home in the last years of his life. At the point in time where the value of the home is converted to cash to pay for something else, would you consider the cash to be derived from “savings”, “investments”, “sale of assets” or something else? What if the cash was derived from bonds?


  17. bob on October 12, 2010 at 11:04 pm

    But by paying more on the mortgage instead of putting the extra cash into “savings”, you are saving on the interest owed to the bank, because you are paying the whole thing off more quickly. It is a forced savings, because you pay less interest. And generally speaking, it is as good or better an after-tax guaranteed rate as you can expect to get from any “savings” accounts.

    By claiming that only money designated specifically as “savings” counts, you are really just playing a linguistic shell game that makes a fetish of “savings”. This is revealed clearly when you say: “Whether his was the most prudent route or not is another question”. Isn’t that the most important question?

    Surely the whole point of savings is to increase your net worth. Savings just for the sake of having “savings” — even to the detriment of net worth — should hardly be something we see as a positive, should it?

    It all boils down to the fact that, in many of these discussions, there is far too much emphasis placed on savings and far too little emphasis placed on debt repayment. The effects on net worth are what should be considered, whether it is achieved through savings or debt repayment. Why should I put thousands of dollars into savings, if I have thousands of dollars of debt? And why should we think more highly of people, like Cal, who end up with a balance in their savings account, but who have remaining mortgage debt over people like Alfred and Bob who pay off their mortgage first before building savings?

  18. DAvid on October 13, 2010 at 2:08 am

    So Al & Bob pay off their mortgage, then spend the income they formerly placed against the mortgage on trips, toys, & tunes (they enjoy concerts in far away destinations). Cal on the other hand steadfastly puts his $500 per month into his ‘savings’, and once the mortgage is paid off adds that amount to his ‘savings’ on a continuing basis.

    You seem to be associating the term ‘savings’ with paying less for something, whereas I am saying that unless you actually put money aside in some fashion, you are not ‘saving’. Thus the simple act of paying down your mortgage faster does not result in savings in this discussion. Savings occur once you have completed paying the debt and start to put money aside. In your thesis, there is no information that Al or Bob ever do anything with their money to improve their net worth once the mortgage is paid. Cal, on the other hand has savings of $500 x the number of months of the mortgage. While I agree that he did not choose the most cost effective way to pay his mortgage (time value of money excluded), your example leaves the reader to assume Al & Bob choose to put income into ‘savings’ after the mortgage is paid, but nowhere does it state they do.

    In my book, savings is not simply paying less for something, it is actually doing something useful with the difference between what you could have paid (full price), and the discounted price you actually paid.

    So let’s look at your numbers from a different perspective. Each buys a home with a $285,000 mortgage. At 4% this could be carried for $1504 per month. Each of the guys does as you say. In 25 years, Al, Bob & Cal end up with a house of some future value. Let’s say $500,000. Al & Bob paid about $385, 000 for their homes, while Cal pays about $64,400 more or $449,000. However, Cal, being the astute guy he is invested his $500 per month in a TFSA, and other low tax liability investments, getting the long term stock market return of 7% annually. After 25 years his nest egg has grown to $396,500. Cal has a net worth of $500,000 + $396,500 – $449,000 = $447,900, while Al & Bob have $500,000 – $385,000 = $115,000.

    Davie, bought the fourth house in the neighbourhood, and once his mortgage was paid off (on the same day as Al & Bob) invested his mortgage payment using Cal’s advice. In the 7 years between then & when Cal finished his payment plan, Dave’s $2000 montly investments at 7% grew to $302,000. His net worth is $500,000 -$385,000 + $302,000 = $417,000.

    Of the four, who was wisest?


  19. Future Money-Bags on October 13, 2010 at 8:37 am

    Wow I just wrote a super long post about bob and david, and typed up another group of scenarios to compare further consolidations and savings habits. Than I hit subscribe instead of submit.. annoying.

    So again, About the age, income options, and whether its single or dual-income about the poll: I make under 35k and had to choose ‘over 35k’. Low income earners can easily have a much higher savings-rate than high income earners. And high income earners, can easilly have much more debt than low income earners.

    It all depends on habits. Savings, debt, education, responsibilities, living conditions, needs, etc. It all comes down to what you started off with. Was it a high paying job? Did you have help from parents until you got your feet off the ground? Did you move out when you were 16 and get an apartment, than have to get student loans for university? Have you always made minimum wage? Many factors will shape who you are, but the important thing is that you can always change who you will become.

    I make under 35k now, and save over 60% of my income. When I make 40k, I Will continue saving 60% of my income . When I make $100k, I will still save the majority of my income; Taxes depend on your income source.

  20. bob on October 13, 2010 at 10:12 am

    Oh man, I don’t have time to respond to the many errors in your comment at the moment; but I’ll just note that any scenario that assumes a 7% after-tax return is inherently ridiculous from the outset.

  21. alexander45 on October 13, 2010 at 12:55 pm

    Future Money Bags,

    I’m afraid I’m having a very hard time believing your numbers.

    You claim to earn less than $35,000/year and to save over 60% of it.

    So you are living off of less than $12,000/year before tax? Living on your own? Paying rent and utilities? Having a social life?

  22. JK on October 13, 2010 at 5:00 pm

    Wow – families in the $100 to $130K range who can’t pull a few nickels to save?

    A lot of households would envy this level of before tax income! =)

  23. John Q on October 13, 2010 at 6:46 pm

    About the whole cash being used to pay off debt vs. remaining as cash discussion…it’s really a matter of basic accounting and liquidity. I presume the poll was meant to show how much liquidity (in cash/cash equivalents) is being retained by various MDJ readers on a yearly basis as a percentage of their gross income. This doesn’t *necessarily* speak to the amount of long term debt (eg. mortgage) the same readers hold on, nor to the general health of, their personal balance sheets. That’s a different discussion.

    That being said, I do agree the guaranteed and effective rates of return of paying off personal debt are often superior to most other investment options. Hence, (if you agree with that previous statement) the trade off is long term benefit versus short term liquidity….which can be a difficult choice as not everyone has a lender of last resort (eg. Mom and Dad). :)

  24. Ben on October 14, 2010 at 11:25 am

    Said it before, but worth saying again. How much people think they are saving, and how much they are actually saving can be wildly different numbers. I think there’d be a bit of a bias to overestimate the personal savings rate.

    Really interesting how many people in the 100-130k range are not saving a lot of money. Really sticks out – statistically significant. Probably a book could be written on why this savings pattern is seen. One possible contributing factor – “We’ve got a 6 figure income, we deserve/have earned a certain lifestyle.” Who knows, but really an odd distribution.

  25. Jeff on October 15, 2010 at 6:50 am

    I find this hard to believe based on the fact that the national saving rate is actually a negative number. Do people honestly believe that they are saving say 10-20% of their gross income when their Cc and revolving account balances keep going up. I don’t consider it saving if you put 10K in the savings account and 12K on you Visa or LOC.

    Perhaps people that read these forums are somewhat better off because they tend to take a more active role in ensuring they are properly prepared for retirement and such or maybe not.

    I also do not think that paying down your mtg is saving. In fact i’m of the belief that a house is a liability unless it meets the following criteria.

    To me an Asset has 4 characteristics:
    It’s borrowing cost if any is at a low interest rate.
    It increases in value.
    It generates positive cashflow
    It provides Tax deductions and write-offs.

    Where as a Liability is:
    Typically high interest
    decreases in value
    does not generate at least enough income to cover its cost.
    and is not tax deductible.

    So i see the average home as a liability until the point of sale, whatever they put in your hand when the deal is done that is the asset.

    Sorry I went a little off topic. I truly hope that these stats are correct, but I don’t think they are.

    • FrugalTrader on October 15, 2010 at 7:14 am

      Jeff, I believe that your house is an asset as you can borrow against the equity to invest in long term securities (ie. the SM). This would satisfy all your criteria for an asset.

  26. Future Money-Bags on October 15, 2010 at 7:58 am

    Despite the fact you appear to find it hard to believe, that is my situation.
    I have no reason to lie or make certain facts seem more great, who am I trying to impress if no one knows who I really am?

    I shall break it down for everyone a bit more, as I do not mind sharing my finances and if someone can benefit by knowing that I can do it, maybe they can too! :)
    I do indeed make under 35k/year. I am not proud of this, but I am only 24 so I do know many making less (And many making more, oh and TONS more going to school and making lots of debt). But its not important how much money you make, its what you do with it.
    I do pay rent. I do have a room mate so I am able to split the cost of rent. I do live in vancouver, its not super cheap here…Hydro? Its under 20/m.
    Car insurance? I pay for a year at a time, saving me a little bit. I have -40% premiums so that saves me hundreds. I do have a cell phone which is charging me 70/m and I hate it!
    I have a fuel efficient car, which I purchased from craigslist, no leasing for me. I searched for a good deal, making it worth 20% more than I purchased it for.
    I went to vegas for a week this year, went to mexico for an all-inclusive vacation, those packages are the way to go if you find a good deal!.
    I am going to sisters wedding next month, that won’t be cheap, but hey I will drive down instead of flying.

    So far this year I have saved $15k, I plan for 19-20k by the end up december. I didnt just start saving this year, so I have a nice egg saved up.

    Many people are surprised by my discipline, I understand I am not the average canadian. But no one ever has a reason to not believe me. Yes I am aware the debt-to-income ratio in canada is near 125%, an all-time high! And that the average national savings rate is under 10%. I don’t even know what that means, because that doesn’t even COVER the debt they have. So the average person gets more debt each year.

    I have no debt, and hopefully the only debt I ever have will be a mortgage on a rental property, which will be paid off each month by the renter itself. I pay off credit card each month with no balance, no interest for me thanks.

    Many of you argue what savings really is. Well even if you do have debt (which most of us do, even MDJ readers) as long as you are decreasing it each year and INCREASING your net worth, how can you not be saving? Its when you are acruing MORE debt each year, and saving less than you spend, when you definitely are not saving. Even if your property goes up in value, but you have more debt than last year, (my opinion) I don’t think you saved any.

    Ps. I just realized when you try to post on here using phone, it doesn’t work.

    If you have any further questions, feel free to ask (I don’t bite).

  27. DAvid on October 15, 2010 at 12:41 pm

    @Future Money-Bags,
    I, too would like to learn how one can live in Vancouver, own a car & travel on less than $15,000 per year. Care to share a few more numbers? I can guess your insurance is on the order of $600 per year, and your hydro & phone costs are quoted.


  28. DAvid on October 15, 2010 at 12:47 pm

    @ Jeff,
    Then the purchase of many stocks would not meet your criteria, especially regarding borrowing costs, cash flow, and tax deductions & write-offs.


  29. Traciatim on October 15, 2010 at 1:01 pm

    @Future Money-Bags, I think something is not adding up, are you using after tax income or have some tax deductions that we aren’t seeing?

    A single person in BC earning 35K a year with no deductions as employment income takes home $28520. If you save 19K this year that leaves you with $9520, or basically 795 a month. Assuming you spend 60 bucks a week on food, that’s 260 a month, Add in your 70 bucks for phone and you keep 465 a month for rent, car maintenance, insurance . . . somethings got to give.

  30. DAvid on October 16, 2010 at 12:47 am

    @Future Money-bags:

    Posted from my phone.

  31. Jeff on October 16, 2010 at 3:12 am

    Hey David,

    Good points on the Stocks. Tell me if you’d consider this an asset…Currently I have a 50K “Investment” loan that is interest only with a payment of $154/mth and is fully tax deductible. I’ll have to confirm but last time i checked the interest rate was 4.25%. Being that im in the 39% tax bracket. In order for my investment to justified the ROI needs to exceed appx. 2.55%. I placed the funds in a Managed portfolio that is balanced as my wife is much more conservative than me. I’ve had the money invested since May 08 and at one point the market value was as low as 38K it has since recovered and currently sitting between 57-58K. Any stocks in the portfolio that are dividend producing are reinvested. Its definitely a long term strategy 10yrs +. I would almost say this meets my criteria as an Asset except that it has to increase in value which has been hit and miss thus far. I won’t really know until I physically withdraw the money, pay off the loan. Then whatever is left I will consider the asset.

    The good thing about my ideaology is that my standards are much higher than traditional lenders. For qualifing purposes it doesn’t matter what i think only what the banks consider to be assets :-) Having this mentality I feel has helped me to make good decisions thus far. For me my networth is only something the banks need to satisfy their lending requirements. I base everything on Cashflow. Currently I have a well paying JOB in the oilfield that pays me appx. 200K per year. More importantly than that I am almost at the point that my Passive income streams exceed my monthly expenses. I am essentially Financially independant, even if I quit or lost my job tomorrow assuming my passive income and expenses stayed the same I would have almost 4yrs before i would need to liquidate one of my properties. That’s my whole goal to increase my passive income to the point that it exceeds my expenses from there i’ll naturally reduce my expenses over time ie payoff mtgs, loans etc. to the point that i’ll generate more and more income every month.



  32. Future Money-Bags on October 16, 2010 at 10:17 am

    Ok lets see if I can break it down a bit more. I try to write as clear as I can, but its usually after work so any apologies for sentences that do not make sense.
    On with the numbers:
    I give some more detail. (MONTHLY)
    Rent is 415
    Phone $70
    Gas $120
    Car Insurance $140
    Food $200/m
    Alcohol – duty free, drink – at home, don’t shop every day for new things, dont go out to eat every day, don’t buy what you want – instead what you need. Damn straight it can look good ;) , have fun if you realize your working too much, don’t buy DVDS! Take your time booking trips – I save $100’s by taking a week to book instead of 1 hour. Take good care of the things you own, buy bulk, cook at home and not alone!

    Oh yea and keeping busy definitely helps you not spend money, as your too busy working, to spend what your making.

    And yes that is $35k Gross Income.
    I make a couple thousand tax free.

    Next year I will continue to look for a rental property to purchase. As I mentioned my income, it makes it very hard to get approved for any decent sized mortgage. Due to the GDR at a maximum of 40% of your income, I fall very short.
    Despite being able to save over 50% each month, hard to get a mortgage of over $200k, when I can only use 40% to service my ‘debt’; Eventhough renters would be paying it. All I can do now is keep working harder, and making more each year, and saving up for an even larger DP. (This definitely is not a super bad thing)
    This would be where making $100k/year comes in handy, even if you are not such a willful saver, the mortgage will force you to save.

  33. DAvid on October 16, 2010 at 12:23 pm

    @Future Money-Bags

    So you’re at $965 / month, not including alcohol, travel or dining. Even if you get your alcohol duty-free (requiring a stay out of the country of in excess of 48 hours) there is a cost. Of course if you are out of the country for 2 days, you likely have accommodations and meals costs.

    Tenants Insurance? You wouldn’t want to be on the hook for damages you cause to your landlord’s building, would you?

    I see no accounting for the amortization of your car purchase, nor the costs of your Vegas or Mexico travel. A week in Vegas would be $500 + food & entertainment, unless you sleep on the street, and a week at an all inclusive in Mexico wold be on the order of $1000, so add another $125/mo to your expenditures to cover this; add another $100 for the car, and your monthly expenditure is about $1185.

    Like Traciatim says: “something is not adding up”.


  34. bob on October 16, 2010 at 12:36 pm

    Yeah, I’m still calling baloney

    What you have just detailed = $11580/month. This is, according to your previous estimate of “saving” 60% per month, all you have to spend.

    And yet, you have included no budget — zero dollars — for: taxes, clothing, alcohol, tenant insurance, furniture, television, internet, home cleaning supplies, repairs, oil changes, entertainment of any sort whatsoever, health care, pit stick, toothpaste, haircuts . . .


  35. bob on October 16, 2010 at 1:11 pm

    Errr. per year, is of course what I meant in the first sentence.

  36. DAvid on October 16, 2010 at 2:09 pm

    Can you sell the units in the Managed Portfolio? If so, then it is an asset.


  37. Jeff on October 16, 2010 at 6:02 pm

    Yes but the MERs are proportionately more if I sell in the first 5 yrs. I could liquidate now and my asset portion would be 7-8K.

  38. Future Money-Bags on October 16, 2010 at 6:54 pm

    Out of country for 48 hours – no problem. The only time I leave is usually going to vegas. I drive across the border and take a 40-70$ flight to vegas. I always stay on weekdays (monday-thur/fri). The 4 nights and flight will cost me $150USD. Throw in $150 for spending and that makes a $300 trip.

    Mexico I went to cabo, dropped a nice $900, and bought some money for a little spending.
    *The $200/m was not just for food, but eating out as well*
    Car? I bought with cash. No payments, no lease, no interest.
    I cut my own hair, hygeine products are cheap. No repairs on the car (yet!) Oil change is $59 every 2-3months.

    But, you guys have made one thing clear for me. This year is actually the first year I have owned a car. I bought it in July, and my expenses have been up a bit every month because of it.
    Also one more thing Just started in September… MSP. I was riding free with no premiums until now. So add in the MSP, Car insurance and Gas, my expenses are up about 300/m.

    The main thing I have realized here, Though I may have been able to save 60%/mon since last year, my minimum means has increased. This means 1 thing, I need to work harder to make sure I get back to the 60% by the end of this year. (Raise, start 2nd job, more hours, and more work on my starting business) I need to get ahead, and stay ahead of the game.

    Fact of the matter stays the same. I have indeed saved $15k so far, and the year is not over yet! I will let you know at the end of December what my savings rate is.
    I have no intention of leading any of you on, just stating the facts as I see them.

    Happy end of 2010 for all. Lets make it a year to count.

  39. Future Money-Bags on October 16, 2010 at 7:11 pm

    Nice situation you have there Jeff. Mind if I ask how much your 50k investment is producing as interest each month?
    I can’t wait to be at the point where passive income > Expenses. Meaning I will be able to save the majority of what I make and have the peace of mind to know I can stop working whenever I want.
    I know some people who worked in the fields for a year or so, but couldnt take the work so ended up quitting.
    How do you continue to do a job that is so demanding?

  40. Jeff on October 18, 2010 at 3:30 am

    Future Money-Bags

    The 50K investment loan that i have requires an “Interest Only” payment. Meaning that my monthly payment is $154. I am paying down nothing on the principal. In order to do that I would have to pay extra. I don’t do that though because it inherently defeats the purpose of getting the loan. In Canada when you borrow money to invest the interest is tax deductible as im sure you know. So if i were to start paying down the principal my interest portion would drop effectively reducing my tax deduction. The reason i do this is because i prefer to use other peoples money to create wealth for myself. Consider that by me borrowing $50,000 upfront and having that large sum in the market and only paying $154/mth for it my growth potential is much higher. As opposed to say me putting $154/mth into an RRSP, how long would it take for me to save up 50K…years. The plan is to leave that large sum in the market as long as possible and continue to enjoy the deductions. Whenever i decide to withdrawl the funds i simple pay back the 50K and keep the rest.

    I hope I answered your question adequately, let me know if i interpreted your question incorrectly.

    To answer your other question about my JOB…Previously I worked on the Drilling rigs I was a Derrickhand and I made 70-90K. That part of the job was pretty good, I enjoyed it. It was climbing the ladder to get there, that was the hard part!

    I had very poor spending habits, no saving habits and essentially lived paycheque to paycheque. Worst of all my perception of money was all wrong…I used to think that if i wanted to make good money I had work really hard for it. I often used the phrase, ” i’d like to but i just can’t afford it”. If you believe that then it WILL be so. I noticed in a previous comment you said…”All I can do now is keep working harder, and making more each year”. Perhaps this one of your limiting beliefs as it was once one of mine.
    You have to change your belief system. Don’t tell yourself you have to work harder to make more money. Tell yourself that money comes easily and frequently to you. Also I’m curious, is the career you’re in right now your dream job? If so and you’re okay with money you make and you are truly happy then nothing else matters. If on the otherhand it’s not you dream job why do you continue to do it? You seem to have tremendous discipline with your saving and spending. Imagine how much you would save if you made 100K/yr or 500K or 1M/yr.! Focus on finding a career in a field you enjoy that pays you more money that requires less time and effort.

    Currently I am a 3rd Class Power Engineer. I went to SAIT for 2yrs. I work and live in Fort McMurray at one of the Large Oil upgrading plants. I work in the control room…like Homer Simpson and make 200K+/yr :-) Is this my dream job absolutely not however it has afforded me the opportunity to buy real estate which i’m really passionate about. My ultimate goal is to get into commercial real estate, where the income potential is much higher.

    To Our Mutual Success in Life & Business.


  41. Jeff on October 18, 2010 at 4:25 am

    Future Money-Bags,

    I would also like to note that I graduated college in June 2007. When i was in school my wife and I bought a 2bd condo in Calgary in November 2005 for $113K because that was all we could qualify for, my wife grossed 42K/yr. Our mtg payment was just under $600/mth and we rented a room to a friend for $300/mth. We sold it in Jan 2007 for 217K. We bought a townhouse in Edm as that is where we are from originally. Fast forward just over 3 yrs and we now own property worth $2,625,000 that generates us in excess of $15,000/mth. We surrounded ourselves with like minded people that had what we wanted. There is no reason you could not do the same.


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