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Paycheque project is a non-judgmental look at how young adults in Canada are spending their money. If you would like to participate, send us an e-mail.
Name, age: Marco, 23
Annual income: $55,000 plus up to a 10-per-cent bonus
Savings: $11,600 in savings account; $29,850 in TFSA; $500 in RRSP
What he does: Construction project manager
Where he lives: Montreal
Top financial concern: “People are going to work into their late 60s and 70s,” he says. “That’s definitely not where I want to find myself. My TFSA is my number one priority.”
At the age of 23, Marco is single-mindedly focused on building his wealth. By living at his parents’ home and keeping his pandemic-era expenses super low, the Montreal-based construction manager has managed to stash between 70 and 80 per cent of his $55,000 salary, plus bonus, into a tax-free savings account.
“It’s 100-per-cent equity in ETFs,” he says of his TFSA investments. Half of those holdings are in global equities, he added, with the remainder split between funds focused on the S&P 500 and the Nasdaq.
Along with his father’s investment guidance, he manages it through the Wealthsimple app. He also looks to YouTube videos and Reddit posts for investing knowledge.
Marco has also dipped his toes into cryptocurrency, although that amounts to a small percentage of his overall investments. “I enjoy the Bogle model of investing: Simply investing in low-cost index funds and to continuously dollar-cost averaging into the market regardless of market conditions,” he says, citing the practice of index investing pioneer John Bogle.
His investing motto is: “Buy continuously even when the market is tumbling non-stop.”
Marco plans to keep beefing up his TFSA. “It’s my number one priority,” he says, adding the money will go toward his retirement. “I’m going to be aggressively saving for the next five to 10 years.”
He graduated from McGill University in Montreal with an engineering degree in May, 2021, and secured his construction job three months later. He hopes to have a significant retirement fund by the time he’s in his 40s to prevent working late into his golden years. “People are going to work into their late 60s and 70s,” he says. “That’s definitely not where I want to find myself.”
He’s made good progress so far: He has almost $30,000 saved in the TFSA, plus another $11,600 in a savings account. “Three thousand of that is my emergency fund,” he says, adding he’d like to increase that to $5,000. Having supported his long-term girlfriend recently after she was laid off, he sees the value in having accessible funds ready in the bank.
In addition, he hopes to buy a home, either in Montreal or Ottawa, with his girlfriend. “I definitely would like to own a property but not as a vehicle to generate a profit,” he says. “If it builds equity, great. But I’m not looking to use my house as a nest egg.”
On June 1, Marco moved out of his parents’ house and into a two-bedroom apartment with his girlfriend. “I expect my savings rate to at least halve – I will just need to continue minimizing costs where I can,” he says, adding that any bonuses or raises will be saved, not spent.
He’s also hoping to upgrade his engineering qualifications – and his salary. “I aim to get my full professional engineering title – in two years I’ll write the exam,” he says.
“So far so good.”
His typical monthly expenses:
Investment and savings: $1,500
$0 to RRSP. “I have $500 saved. This is a negligible amount that I put in around the same time I made my TFSA. I’ll [invest in] it when my TFSA is maxed out.”
$1,500 to TFSA. “I started investing in May, 2020, but with little money as I was still in school. Once I started working in August, 2021, I had around $8,000, I have since been living at home and saving for the last nine months and got around $30,000. It’s 100-per-cent equity.”
Household and transportation: $1,345
$1,000 on rent. “It’s a two-bedroom with indoor parking – my girlfriend pays $550, I will pay $1,000. The new apartment is a two-minute drive away from work. I don’t own a home and don’t think I will for a while.”
$100 on gas. “I have been paying more as gas is over $2 a litre. I have to go to a few different job sites on the island of Montreal.”
$60 on car insurance. “It’s an older car – I’m buying a 1999 BMW off a relative. It will be a bit of a project.”
$100 on car repairs.
$35 on cellphone. “I have a cellphone through work so I may cancel this one.”
$0 on Internet. “It’s included in my rent.”
$0 on Netflix. “I get it through my parents.”
$30 on clothing. “I might buy two pairs of jeans a year and a few shirts. I still get clothes gifted by my parents for birthdays or holidays.”
$20 on transit pass. “I buy 10 passes through the STM [Société de transport de Montréal] for the bus/metro.”
Food and drink: $460
$300 on groceries. “We’re quite frugal and looking for deals. We might make more meals with leftovers. We’ll buy food and freeze some. We make Mexican and Asian.”
$150 on eating out. “We go out once a week. Usually we go to a Greek restaurant once every few months, or a local Italian place with very good subs.”
$0 on alcohol. “With my licence, I am not allowed to drink and drive.”
$10 on coffee/tea. “I get free coffee at work, so sometimes I’ll get one on the weekend.”
Health and fitness: $30
$0 on sports. “I have a new gym at my work and at my new apartment.”
$15 on haircuts.
$15 on dentist visits.
$5 on apps. “My Spotify cost is very low because I’m in a family plan.”
$50 on video games. “I’m not into spending a lot on video games. I prefer to watch sports.”
Annual expenses: $550
$300 on gifts/home a year.
$250 on vacations a year. “We have to take two weeks of vacation in July. In this case, it will be Boston. We haven’t travelled much.”
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Some details may be changed to protect the privacy of the person profiled. We want to thank him for sharing his story. Are you a millennial who would like to participate in a paycheque profile? Send us an e-mail.
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