makingfetchhappen Posted March 30, 2015 Report Share Posted March 30, 2015 Not if you switch to oil and gas! Lol that's s horrible idea! It's not the best time for that sort of thing. But besides, living in Fort McMurray is just as expensive as living in Toronto! Lawyers do not make more there either. Toronto kinda sucks most people in for work. Even a lot of public sector jobs have downtown offices. Companies have offices in places like Markham and Mississauga, but I'm not sure how feasible it would be for a couple to both get jobs there in their respective fields. I grew up on the very outskirts of the GTA where lots of people have jobs locally, but still commuting is a thing that can be hard to get away from. At least the weather is okay. But it's kind of funny to think that you can get a mansion in Beverly Hills for what it costs to live in Toronto these days. Link to comment Share on other sites More sharing options...
older Posted March 30, 2015 Report Share Posted March 30, 2015 That's seems a bit odd - what are they doing that is costing so much? All kids attend private schools. thsc, there is nothing wrong with having a wife earning 6 figures while taking care of 4 kids. Good luck with finding one. Link to comment Share on other sites More sharing options...
MathToMed Posted March 30, 2015 Report Share Posted March 30, 2015 With a wife and few kids, you'll not be into luxury even if you are MD. There was a special in G&M financial advice column few weeks ago about a couple with 4 or 5 kids. The guy was a stockbroker with income more than a MD. Wife at home with kids. They coudn't afford to buy a house in Toronto, yet alone to save for retirement. If you won't have a wife. you are fine, ha ha. But that's not a typical route in life, is it? Then this guy probably shouldn't be a stockbroker as he's simply bad with money. Or I'm missing something drastic, which is always possible, I don't pretend to understand what life is like at the highest income brackets. I come from a family with four siblings, and although I've posted about the financial struggles I've had in my life (though that was due to having virtually no income), I've recently managed to put a down payment on a house. Heck, if we're talking $250K plus figures (given they're more than MDs), and assuming 5 children, I would divvy up the annual income as follows (starting from gross income): -------------------- Contribute to everyone's RRSP/TFSA annual contributions to minimize tax at the highest bracket - this is a value of approximately $20K per person (~15K for RRSP contributions, ~5K TFSA). I would then invest this directly into something that paid respectable dividends (I'm now looking at something with about 8% annual dividends). This is 20K * 7 people = 140K off of the gross salary. This leaves about $110K, and it would be taxed down to $79,219 according to current income tax rates (I'll spare you the calculation). Now let's deduct $19,219 for other annual deductions and utility payments (which is a pretty reasonable number given income tax is already deducted), that leaves about $60K of spendable income (with mind you, $140K of potential savings). Take 10K of that and put it towards future home-ownership, and you're left with roughly 8.5K per person. Within 10 years, you'll have saved $100K which will allow you to amortize your mortgage at a decent rate, depending on the price of the house. Truly you can make this work, Gail Voz Oxlade recommends about $100 per person per week for groceries and eating, which works out to $5200, so the remaining $3300 ($275 per month) per person can be spent on other enjoyable stuff. Of course if you're eager to buy a house, you can naturally push more income into that by not putting so much into the 5 children's RRSPs/TFSAs. If you say, only contributed 10K to the children's accounts, you'll wind up with 50K income (taxed at the highest bracket however - about $35,000 spendable) that could help accelerate your purchase of a house / make larger mortgage payments. However in reality, there are other games you could play. For example, I wouldn't pay off my mortgage any faster than I have to until interest rates go up. If I make minimum payments at 3-4% interest on the mortgage, I can invest the remainder of what I would have paid into something paying out more than 4%. This is what I'm doing, as I've found something paying 8% dividends annually, and I'm sure Mr. Stockbroker can do even better by playing stocks. You're essentially saving $140,000 per year, plus whatever income is earned on your investments. ------------------- I realize this is a bit of a simplified analysis for a few reasons, (such as technically being taxed for TFSA contributions, but not being charged on capital gains in these accounts, etc), and in reality you would have to assess how much gas you use to get to work, your place of residence, how far your kids commute to school etc. which isn't really possible in general. Anything else could be supplemented by dumping less (but still a respectable amount) into savings, playing with how much goes into a TFSA/RRSP, etc. I've also assumed that you're kind of established in your career, and don't have zero income. Most notably, note that 5 kids don't just pop out of nowhere - it would take (at least) 45 months to have 5 kids, during which time you're paying less for them, and more into a first house. Of course I neglect career changers, etc. but I'm assuming that whatever income you had while having your 5 kids, you sensibly spent / saved at whatever figure that was. I'm also assuming a stay at home husband/wife, and that the $250K earner is a single, sole-income provider. Bottom line is, I could have definitely made it work if we're talking that kind of cash so there's no reason Mr. Stockbroker couldn't besides perhaps being accustomed to a lavish lifestyle, or being impatient. I support my 3 siblings, disabled mother, myself and my fiancee with a 50-60K combined income. Mind you we're not doing all that crazy saving (indeed we're taxed at relatively low income brackets regardless), but we can make it work and as I mentioned, recently put up a down payment on a house and make mortgage payments. We have to choose between home ownership and saving, but with a much higher income bracket, that decision shouldn't have to be made. Link to comment Share on other sites More sharing options...
JohnGrisham Posted March 30, 2015 Report Share Posted March 30, 2015 LOL. You are joking right? I'm not exactly sure where comparisons are to be made, if not to the rest of the population. But, construction... Really?! Have you ever worked construction or anything similar? It's a grind just doing it for a summer or anything like that. Give it a try if you don't believe me. Good luck getting through the first 3 months, let alone the first winter. Construction work is very good pay compared to a lot of other fields, but it's also much harder. People who do that sort of work tend to die a lot earlier too, and that's kind of a big deal. Also, why would you assume that education = time, effort, and worthiness? I have a couple of degrees myself, but I don't exactly envy the guys I know who left high school to slug it out at construction jobs. And LOL for me to tell them that their jobs are less rigorous! No one said that it was wrong that physicians make 4x more, all they said is that $300K and up is wealthy, etc. Having worked construction a lot of my life, i'd agree - studying is a joke compared to working a real manual labour job. All these pre-meds think that doing a science degree is difficult - try working 60 hours a week on a construction site, like many of these people (who by the way will be your future patients) sometimes that are implied as being beneath us since they didnt "invest so much time and energy". Link to comment Share on other sites More sharing options...
MathToMed Posted March 30, 2015 Report Share Posted March 30, 2015 Having worked construction a lot of my life, i'd agree - studying is a joke compared to working a real manual labour job. All these pre-meds think that doing a science degree is difficult - try working 60 hours a week on a construction site, like many of these people (who by the way will be your future patients) sometimes that are implied as being beneath us since they didnt "invest so much time and energy". Indeed, I'm more than capable of carrying out the duties of a physician (in terms of mental and physical fitness). To me, Academic stress is the "easy stress." However I could not bring myself to work in a kitchen and be screamed at by other people over the stupidest things. Could not do it, I lasted a week. Naturally, I have a lot of respect for kitchen work. Link to comment Share on other sites More sharing options...
makingfetchhappen Posted March 30, 2015 Report Share Posted March 30, 2015 With a wife and few kids, you'll not be into luxury even if you are MD. There was a special in G&M financial advice column few weeks ago about a couple with 4 or 5 kids. The guy was a stockbroker with income more than a MD. Wife at home with kids. They coudn't afford to buy a house in Toronto, yet alone to save for retirement. If you won't have a wife. you are fine, ha ha. But that's not a typical route in life, is it? Is it typical to have to support your wife? I think that this is the rarer situation actually. There are not a lot of men out there who are willing to be the sole bread winner aside from a few years with very young children. But ya, private school is a pretty efficient way to part with your money. I don't understand why anyone would want to spend such a huge sum on something that can be had for free. I've heard that the public school system in parts of the States can be so bad that you need to send your kids there, but that's not the case in Canada. Link to comment Share on other sites More sharing options...
aaronjw Posted March 30, 2015 Report Share Posted March 30, 2015 However I could not bring myself to work in a kitchen and be screamed at by other people over the stupidest things. LMAO. As someone who considered being chef when I was younger and worked in resto's during HS and into my undergrad years this bring back memories. However, getting screamed at paled in comparison to having a hot frying pan or knife tossed at your head lol reflexes baby! Link to comment Share on other sites More sharing options...
SapphireWater Posted March 31, 2015 Report Share Posted March 31, 2015 If the average income of a physician was around 75 K only but earning a spot in a medical school is still as competitive as it is today ....... would you have still gone though all this trouble to get into medicine ? Disclaimer: The following comment is speculative, because I'm not a medical student. I don't think there is going to be a unanimous answer to this question, because there are so many factors that can influence the decision to pursue medicine. I would also argue that medicine isn't that popular of a profession as is, despite the competitive admission process and general perspective of this forum. Let me clarify. There were ~19,000 medical applicants across Canada for the 2013/2014 application cycle. Compare that to the ~4.9 million Canadians between the ages of 20-29, and we have roughly ~0.38% of that age demographic applying to medicine last year. Consider the variability brought about by older applicants, multiple applications, or focusing on a smaller age demographic (25-29), and the vast, vast majority of people are not applying to medicine. Why does this matter? Medical applicants are already a minority, which suggests to me that their motives for applying are highly specific to the current state of the profession. This means that even minor variations could drastically change the applicant pool. I also strongly agree with a previous post that suggested if nothing else changes (i.e. tuition fees, practice overhead, etc) then we'd likely see a drastic reduction in the number of applicants. Another factor to consider is the salary of a resident/fellow; would it decrease proportionally as well? If so, that would make medicine one of the least accessible careers in this country. Assuming that wouldn't be the case, we'd still have to consider the impact salary reduction would have on loan opportunities. Acknowledging just those few points, I feel like a very small percent of applicants applying today would continue to apply under your scenario. I might also extrapolate it further to say, this would be disastrous for physician/resident morale and health care at large. Link to comment Share on other sites More sharing options...
amichel Posted March 31, 2015 Report Share Posted March 31, 2015 Is it typical to have to support your wife? I think that this is the rarer situation actually. There are not a lot of men out there who are willing to be the sole bread winner aside from a few years with very young children. But ya, private school is a pretty efficient way to part with your money. I don't understand why anyone would want to spend such a huge sum on something that can be had for free. I've heard that the public school system in parts of the States can be so bad that you need to send your kids there, but that's not the case in Canada. Agreed, it's such a waste of money it baffles me. Fancy private school where I grew up was 20 000 dollars a year. If parents spent a fraction of that on music lessons, tutors and travel opportunities for their kids, they would be so much smarter and more well rounded. Besides, educationally success depends infinitely more on your upbringing than your grade school. Plus, those kids had their hands held so much in high school that a bunch of them failed miserably in first year university. Link to comment Share on other sites More sharing options...
NLengr Posted March 31, 2015 Report Share Posted March 31, 2015 Is it typical to have to support your wife? I think that this is the rarer situation actually. There are not a lot of men out there who are willing to be the sole bread winner aside from a few years with very young children. Actually it's not that odd in medicine from my experience. Most docs, at least in my field, are making enough cash they don't really care what their spouse does. Link to comment Share on other sites More sharing options...
NLengr Posted March 31, 2015 Report Share Posted March 31, 2015 Lol that's s horrible idea! It's not the best time for that sort of thing. But besides, living in Fort McMurray is just as expensive as living in Toronto! You could live in Calgary or St. John's unless you were set on being a trades person (even then you could live in St. John's since the fields are all offshore and St. John's is the closest center). Much more preferable. Besides, oil will pick up again in the long term. Our species has an insatiable desire for it, and its only getting worse. Link to comment Share on other sites More sharing options...
makingfetchhappen Posted March 31, 2015 Report Share Posted March 31, 2015 You could live in Calgary or St. John's unless you were set on being a trades person (even then you could live in St. John's since the fields are all offshore and St. John's is the closest center). Much more preferable. Besides, oil will pick up again in the long term. Our species has an insatiable desire for it, and its only getting worse. Sure this may be true for some fields, but in law, you don't really get paid more to work in oil, or to move in general actually! I have even seen advertisements for mid level lawyers to go work in the Artic for legal aid for $100K. Might as well just live wherever you would like and where the cost is living is not too bad. Luckily I do not need to go into the city more than once a week working for myself, so even though all of my business is in Toronto, I don't need to commute! I didn't even get an interview to med this year, but if got us looking at Hamilton. It's a pretty good option I think. Hamilton is the new Leslieville. Link to comment Share on other sites More sharing options...
BoyInTheBubble Posted March 31, 2015 Report Share Posted March 31, 2015 -------------------- Contribute to everyone's RRSP/TFSA annual contributions to minimize tax at the highest bracket - this is a value of approximately $20K per person (~15K for RRSP contributions, ~5K TFSA). I would then invest this directly into something that paid respectable dividends (I'm now looking at something with about 8% annual dividends). This is 20K * 7 people = 140K off of the gross salary. This leaves about $110K, and it would be taxed down to $79,219 according to current income tax rates (I'll spare you the calculation). This isn't how it works. TFSA starts at age 18. And the gains are tax free. The initial payments are taxable. RRSP contribution room is based off earned income. You can't just pay money for your kids. (And the new proposed income splitting would only allow a 2k savings maximum.) Link to comment Share on other sites More sharing options...
makingfetchhappen Posted March 31, 2015 Report Share Posted March 31, 2015 Actually it's not that odd in medicine from my experience. Most docs, at least in my field, are making enough cash they don't really care what their spouse does. Lol that's something. A few of my guy friends make $150K plus, and they will not even think about dating someone who doesn't earn in a similar category. I guess it's different when you're making double though. Link to comment Share on other sites More sharing options...
MathToMed Posted March 31, 2015 Report Share Posted March 31, 2015 This isn't how it works. TFSA starts at age 18. And the gains are tax free. The initial payments are taxable. RRSP contribution room is based off earned income. You can't just pay money for your kids. (And the new proposed income splitting would only allow a 2k savings maximum.) You're right, I butchered the post. Whoops, its not clear at all... By TFSA, I meant put it into yours/spouse's, at 5K, and put the rest in RRSPs, not your kids' own TFSA accounts. Not clear at all...sorry about that, it's implying a completely different thing. However you absolutely can play these sorts of games to get into lower income brackets. I know of someone contributing to their kid's RRSP, their kid gets tax credits which the parent then takes as their legal guardian...or something to that effect. Regardless, my point was that even without this fancy stuff, $250,000 gross income is a comfortable household salary, even for a larger family. Link to comment Share on other sites More sharing options...
rmorelan Posted March 31, 2015 Report Share Posted March 31, 2015 You're right, I butchered the post. Whoops, its not clear at all... By TFSA, I meant put it into yours/spouse's, at 5K, and put the rest in RRSPs, not your kids' own TFSA accounts. Not clear at all...sorry about that, it's implying a completely different thing. However you absolutely can play these sorts of games to get into lower income brackets. I know of someone contributing to their kid's RRSP, their kid gets tax credits which the parent then takes as their legal guardian...or something to that effect. Regardless, my point was that even without this fancy stuff, $250,000 gross income is a comfortable household salary, even for a larger family. Fine details aside I think you point is valid. If you are reasonable and can live modestly you can relatively quickly achieve some pretty great results. For the kids to get an RRSP they would have to first have income. You are also giving money away then to your kids in the form of that income, and they would actually have to earn it somehow reasonably (although you can get them doing lost of different things). Probably a more standard approach is to pay them part time for say 10K a year doing some in the office etc. No that hard to come up with stuff for that. Since that amount is below the amount that is taxable there is no tax, although their RRSP room will grow. That money technically goes to the kids, right into their bank account and then back out and handed to the parent etc. You have effectively now taken 10K and avoided paying the basically 5K in tax on it the parent would. However the kid actually does have to do reasonable work (it is reasonable for rev canada to ask and verify that 10K worth of work was done - although obviously that can be a bit vague). If you have 2-3 kids then you can move 30K around etc and it gets them involved, learning about money. On top of that you can probably income split with your spouse if they have some particular skill (classic is the other one "doing the books"). No the same level as your spouse may already have income but if there is a large gap in the two incomes that can work. Later one you can give your children dividends directly after they are 18. Not a bad way to pay for school etc. Allows for more possibilities as well. Link to comment Share on other sites More sharing options...
aaronjw Posted March 31, 2015 Report Share Posted March 31, 2015 There was a special in G&M financial advice column few weeks ago about a couple with 4 or 5 kids. The guy was a stockbroker with income more than a MD. Wife at home with kids. They coudn't afford to buy a house in Toronto, yet alone to save for retirement. All kids attend private schools. LMAO! 4-5 kids in private school at (min) $15/yr for $60K to $75K MINIMUM per year? And you are using this highfalutin stock broker can't afford a house in TO or retirement savings as some example of how doctors with a wife and some kids will struggle financially? Seriously? Like I said, people with high incomes generally find themselves in financial difficulty because of piss poor financial spending habits or they make horrible relationship decisions (in case people are wondering, getting married is NOT a horrible relationship decision - waiting for medigeek to come in with all the anti-women rhetoric). Link to comment Share on other sites More sharing options...
older Posted March 31, 2015 Report Share Posted March 31, 2015 LMAO! 4-5 kids in private school at (min) $15/yr for $60K to $75K MINIMUM per year? And you are using this highfalutin stock broker can't afford a house in TO or retirement savings as some example of how doctors with a wife and some kids will struggle financially? Seriously? Like I said, people with high incomes generally find themselves in financial difficulty because of piss poor financial spending habits or they make horrible relationship decisions (in case people are wondering, getting married is NOT a horrible relationship decision - waiting for medigeek to come in with all the anti-women rhetoric). Quite seriously. This is a good example how relative 'wealth" is. They are not an exception. Spending money on good education for kids is not such a bad financial decision - if they bought a plane or ferraris or a yacht then you might hint at poor spending habits. I know of people really poor (emigrants) who put all their money into kids education in private school. A matter o priorities. Link to comment Share on other sites More sharing options...
amichel Posted March 31, 2015 Report Share Posted March 31, 2015 Quite seriously. This is a good example how relative 'wealth" is. They are not an exception. Spending money on good education for kids is not such a bad financial decision - if they bought a plane or ferraris or a yacht then you might hint at poor spending habits. I know of people really poor (emigrants) who put all their money into kids education in private school. A matter o priorities. Except that you don't need to... In Canada they will get a good education at pretty much any public school. Especially if they have parents who make it clear that education is important. Link to comment Share on other sites More sharing options...
aaronjw Posted March 31, 2015 Report Share Posted March 31, 2015 Just don't cry about not being able to afford to buy a house or save for retirement when spending minimum $60K-$75K per year on private education for children. Link to comment Share on other sites More sharing options...
rmorelan Posted March 31, 2015 Report Share Posted March 31, 2015 Except that you don't need to... In Canada they will get a good education at pretty much any public school. Especially if they have parents who make it clear that education is important. I would agree it isn't the private school that makes things work specifically - it is the parents being very clear that education is a priority. Private schools are part education and part of getting into a particular social circle. Both would help you in specific ways going ahead but it is important not to mix the two This stock broker is probably in part in a bind - he needs to maintain a certain social status in order to network and appear to be successful - and you need look successful to be successful in sales. It is a circle he cannot easily escape from. His clients go to private schools, drive nice cars, live in nice areas etc so he has to do the same thing. You would you give your money to some that looks like they don't know what to do with it? You going to get invited to the right functions wearing your 300 dollar Moore's suit pulling up in your 9 year old Honda accord? That is why is it often more useful from a wealth building point of view to be say a blue collar worker that needs over 100K with overtime etc (I know a lot of skilled trades people that can do that - my brother is in construction), vs the same 100K in say an office environment. There is less expectation to show off wealth. You can drive the old pickup truck, mid tier house, have no flashy clothes, kids don't go to private schools, and no one looks at you and tries to over charge you because they think you are made of money...... So you just save. Link to comment Share on other sites More sharing options...
NLengr Posted March 31, 2015 Report Share Posted March 31, 2015 Lol that's something. A few of my guy friends make $150K plus, and they will not even think about dating someone who doesn't earn in a similar category. I guess it's different when you're making double though. Or perhaps those friends are self important douchebags? Link to comment Share on other sites More sharing options...
NLengr Posted March 31, 2015 Report Share Posted March 31, 2015 As for concerns about private schools: http://www.cbc.ca/news/canada/private-school-success-due-to-better-students-not-better-schools-statscan-says-1.3016123 Although I think anyone with a bit of sociology, educational and statistical knowledge figured this was the case anyway. Link to comment Share on other sites More sharing options...
amichel Posted March 31, 2015 Report Share Posted March 31, 2015 I would agree it isn't the private school that makes things work specifically - it is the parents being very clear that education is a priority. Private schools are part education and part of getting into a particular social circle. Both would help you in specific ways going ahead but it is important not to mix the two This stock broker is probably in part in a bind - he needs to maintain a certain social status in order to network and appear to be successful - and you need look successful to be successful in sales. It is a circle he cannot easily escape from. His clients go to private schools, drive nice cars, live in nice areas etc so he has to do the same thing. You would you give your money to some that looks like they don't know what to do with it? You going to get invited to the right functions wearing your 300 dollar Moore's suit pulling up in your 9 year old Honda accord? That is why is it often more useful from a wealth building point of view to be say a blue collar worker that needs over 100K with overtime etc (I know a lot of skilled trades people that can do that - my brother is in construction), vs the same 100K in say an office environment. There is less expectation to show off wealth. You can drive the old pickup truck, mid tier house, have no flashy clothes, kids don't go to private schools, and no one looks at you and tries to over charge you because they think you are made of money...... So you just save. You're probably right, but the whole attitude makes me want to vomit. I'd almost have less of a problem with it if they'd just admit they are doing it for the status, instead of insisting that it's oh so much better and blah blah blah. Link to comment Share on other sites More sharing options...
amichel Posted March 31, 2015 Report Share Posted March 31, 2015 Mods please delete double post Link to comment Share on other sites More sharing options...
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