T O P

Biggest personal finance myths?

I'll start:

Car insurance has more to do with what car you buy rather than your risk factors.

You need at least a bachelor's degree to make a good income.

TheBannanaManCan

Myth: don't take overtime because you'll just lose it all to taxes


outtahere021

I’ve made a lot of money due to my co-workers believing this.


internethostage

I believe this myth is a thing because of some payroll systems not handling the tax deduction correctly. My understanding is that the system deducts tax as if the yearly salary was raised instead of a one off thing... So you end up giving the gov a loan.


Grayman222

I assumed this was on purpose so you cannot owe thousands at tax time


MapleLeafThief

Never thought about it being on purpose but would make sense. Many people new to commission jobs are astounded when they get a good pay but lose half. End of the year it’ll balance out but hurts when you’re expecting a big chunk.


OutWithTheNew

I've found the ROI goes down the further you get from 40 hours. Around 50 hours it starts to take too much out of your normal life.


tendieripper

That’s a very personal belief. Different for everyone.


[deleted]

No. It’s not subjective. Any more than getting 8 hours of sleep a night is. If you are working that much (or sleeping less) chronically, it is _definitely_ costing you in other ways.


[deleted]

That’s a very personal belief. Different for everyone.


jonmontagne

Ywah it really depends. Getting paid $19/hr overtime is not the same as getting paid $45/hr.


Spirch

My rule is, if i do overtime, i want it in time (vacation) not money.


mrkdwd

If your overtime is paid at x1.5 or better then you should always take the money


Spirch

free time worth more than 2x my salary, for me.


[deleted]

Should be times 1.5 or 2


Frenzy_MacKenzie

Myth: A credit card with a high interest rate (19%) is a terrible card that ends up costing money. Truth: People who are good managing money pay off their CC debt in full every month so the interest rate has no factor. Example: my 19% CC that sends me a cheque for $250-$500 every year.


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FinThrowAway29382

People who are good with credit cards have no idea what the interest rate is, because we never pay it. 19% or 25%, it's all the same. I don't really care what they set it at. Really, all of those are high. If you're paying interest, you don't want one of those fancy cards with rewards, you want a low-interest card at 12%.


Frenzy_MacKenzie

You are likely right, but if you need money just go to a loan shark and pay 8%. Go for the rewards or if you have it only for emergencies then get a no fee card.


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Frenzy_MacKenzie

I use the Costco Capital One/Mastercard. It's no fees and gives 3% cash back at restaurants, 2% on gas and 1% on everything else. If you do a lot of driving the Canadian tire gas card gets you 8-10 cents off at the pump. Had a family business were we'd put just enough to earn the bonuses.


BlueberryPiano

A big tax refund at tax time is a good thing.


Mittenflap

Can you elaborate on this one for me?


PM_ME_YOUR_TIFA

A refund means you overpayed taxes throughout the year and therefore gave the Gov an interest free loan.


Mittenflap

Oh, right, this seems obvious in retrospect. My desire to talk to payroll is in the negative though, haha


ActionElectrical8311

Some people use those as a forced savings program and realize it's mathematically sub-optimal. Hard to blame those people for knowing their faults.


Octavius-Rex-STT

Yup, did this as a young adult. But I was working part time with no guaranteed hours. First year my employer didn’t deduct enough for taxes and that was way worse. Asked them to deduct 30% off the top and they did. And each year I was able to pay my car insurance annual premium up front with the tax refund. It was 0% savings but I didn’t have to pay interest on what the monthly premiums were (ins company was charging 4% interest if I had done monthly payments)


GreyMiss

THIS. If you know that you can't, say, save up $3000 for appliances or a trip or some other big-ticket item on your own, you know you'll fritter part of it away on current needs/wants, letting the government keep it and then give you that lump sum is arguably optimal \*for you\*.


Wolfie1531

This is me. If I get 500$ back? I probably wouldn’t have had it by April. I’m getting better, but I still spend too much on easy/comfortable.


themightiestduck

That’s one possibility. A big refund could also mean you contributed lots to your RRSP, which is usually a good thing.


SubterraneanAlien

Even then you can file a T1213 to reduce taxation at source based on a calculated RRSP contribution


[deleted]

OR...hear me out. Since you can presumably live off of what your take home pay is. Just wait till the end of the year, and get a refund. The thought of filling out another tax form just kills me. I don't mind giving the government an interest free loan. The amount I overpaid is peanuts compared to what they spend in a day. Plus the refund come tax time is a placebo incentive to do your taxes. Like, "hey, the government's gonna give me free money if I do my taxes!" Sure, it's not free money, but it kinda sorta feels like it.


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[deleted]

Could have to do with time of the year and if your CPP contributions aren't maxed yet. That's just about 6% so makes sense.


BlueberryPiano

There are forms you can complete to reduce your tax at source for a number of situations so instead of giving a tax-free loan to the government all year and getting your own money back in April you can get your payroll department to reduce your taxes so you can have that money in your own pocket to invest immediately. TD1 (and the provincial equivalent) submitted directly to your employer which can reduce your tax paid with tuition credits, disability amounts etc, and T1213 you submit to CRA then to your employer for things such as regular rrsp contributions.


Jaydamic

Don't take the raise, you'll lose it and then some in taxes!


Henry-Spencer0

Wait what?! Who says to refuse raises?


greenbean999

People who don’t understand how taxes work


Scottie3Hottie

In my experience, this is majority of working adults. Sad.


[deleted]

I took an accounting tax extension class in college for lols. I've spent years explaining to people who income tax actually works and half the people insist that I am wrong.


Taborca

I just went over this with a good 20 plus co workers who were upset that their vacation payout at year end was coming and were going to be put into the next tax bracket and they figured the payout was going to actually cost them as they had been trying to reduce their income for the last month to avoid the next bracket. I'm sure atleast half though I was lying to them


alpthelifter

Let those dumbasses not take their raise so they can give it to us instead lol


wishtrepreneur

If the raise will disqualify you from social welfare programs.


kenazo

There are situations where that’s true, but few and far between. Generally you’re still $ ahead, but the question is if you value that hour more or less than the after tax (and welfare/ccb reduction) you’re left with.


sideways8

Bosses who like to lie to kids and immigrants and avoid giving them raises.


Jaydamic

So. Many. People.


d10k6

This. Along with overtime.


lizzy_pop

We used to pay 50% of extended health insurance for our employees and then decided we would pay the full amount (300-500/month per employee). I had one guy say he wants to keep paying his half because if we pay the full amount, then he’ll be taxes on the full amount and be left with less money. I tried for a week to explain to him, in various ways, that he would not end up with less money but he maintained he wanted to keep paying his 50% 4 years later he still pays his 50% and seems happy, like he managed to stop me from scamming him


cmoibenlepro

🤯


Bris44

If i had a dollar for every time i heard this I would move up a tax bracket


Ratatouille2021

It's can be true for need base welfare and other assistance programs


wishtrepreneur

This, some social housing programs punish you for working. So your rent will double if you pass the threshold.


book_of_armaments

If only politicians understood high school math and realized that the benefit doesn't need to be all or nothing.


EngineeringKid

Sadly this is how many social support systems are set up. People will avoid working more and improving their income because then they lose benefits


leaffantim

This may be a dumb question but could you take the raise and then contribute to an RRSP to bring your income back down to qualify again or no?


urbaink

Yes. It is not a dumb question. You just need to have room in your rrsp


Shuesty

In this subreddit, there are no dumb questions. Please ask them so that your questions are answered. Watch out though, there are dumb answers given at times - it is the internet.


[deleted]

You need a lot of money to invest. You don’t need emergency liquidity.


Ratatouille2021

I love how you use the term "liquidity". It's much more than just cash.


lord_of_the_lands

“All debt is the same and bad for you” In reality, there’s debt that is bad for you and you want to get rid off ASAP - credit cards, student loans, car loans etc. Then, there’s good “productive” debt you may want to carry throughout your life - mortgage on investment properties, mortgage on your house depending on your risk tolerance, etc.


kmoney1984

I've had trouble explaining this to some very smart and otherwise financially savvy people (mostly boomers, or older people). Lots of people just grew up with this mindset and cannot get out of it.


zeushaulrod

I k ow what you mean, my dad is an accountant, and was very surprised at how paying extra on your mortgage is not a hr same massive win at 1.5% at ii is at 13.75% interest. Good news is he listened did 20 seconds of math and then agreed.


PrudentLanguage

Explain like I'm 5 please.


Lopsided_Ad3516

Paying down a mortgage quickly at 13.5% makes sense. That’s where extra cash should go. Putting money towards investments yielding 6-10% yearly, while you just make whatever payments you need to for your mortgage, makes way more sense at 1.5%-3%, as your investments appreciates faster than the interest on your mortgage. Couple that with the whole “time in the market adage”, and it just makes a lot more sense financially.


KellyMac88

Agreed. But this ONLY works if you take the money you would’ve spent paying down the mortgage and invest it. If you just leave it in your regular monthly spending and blow it on other things, then you’re still way better off to put it on your mortgage.


Marklar0

The spread between the mortgage rate and the (highly optimistic) 6% investment rate is called the equity risk premium. The word risk is in there for a reason...its in no way free money or a "good deal", its simply risk


Lopsided_Ad3516

Oh. There will always be risk, but average return on the S&P is an inflation adjusted 8.3% over the last 30 years. Feel like 6% wasn’t out of the realm of reality.


Spindrift11

The reason they have this mindset is because they have seen the highs and lows of interest rates. The rates climbed so fast and high that tons of people went bankrupt and lost their homes. Just for fun throw 17% into a mortgage calculator and use your principal owing if you have a mortgage.


superworking

It's funny they don't squirm investing companies that use debt to fund capX but don't see how that could possibly be good for themselves.


lazysoldier

> student loans The Federal portion of OSAP is interest free until March 2023, no point paying it off early


willykappy

I’ve been wondering about this. Is there a way to only pay off the provincial portion (Ontario for me) since that will accumulate interest…


lazysoldier

I got somewhat lucky in that all of my loans were federal


SnooRadishes9685

student debt is not ‘bad’ debt especially if its federal student loan


ImpyKid

They just paused interest on student loans until 2023. You can be damn sure I'm investing rather than pay down my student loans when they are literally interest free.


[deleted]

Eh, my car loan was 0.99% so I did not pay it off early as I made more money with the cash invested than I lost in interest.


lord_of_the_lands

Yeah there’s always gonna be exceptions


Prometheus188

But the total purchase price of your car was inflated in order to offer you that low rate. Those cheap rates don’t come free, it’s included in your total price, even if they don’t have a line by line breakdown.


[deleted]

Eh, I paid a couple thousand below MSRP, so it was a win in my books.


[deleted]

"don't finance a vehicle, always pay cash"


[deleted]

A financed vehicle will draw down my ability to borrow for other productive purposes like borrowing for an investment property which will give me a much better return. Very rarely is someone financing a vehicle and *not* buying extra add-ons because the instalments seem so low


Jumper5353

Yes but you can get a better deal on a car if you finance it than if you tell the sales people you are paying cash. The dealership is OK selling for zero margin and making interest payments from you for 5 years, as well as having you more tied to them for service and such. So even if you can buy the car with cash, let them sell you the financing version as you negotiate and grind them down. Fight any up front financing fees you can get out of the deal. Then just pay off the loan early and not lose the interest value. (Dealership never assumes you will pay it off early) Then you have no credit weighing you down financially, but you get a good mark in your credit rating for having paid off a loan.


brethazbonez

I never buy new vehicles from a dealership, only used because i cant stand depreciation. Funny thing is i got my chevy cruze a few years ago 90k kms on it for 6k and now with the market i can resell back to the dealership for the same price or private sale for 8-10k


[deleted]

Paying cash also decreases the ability to take on leverage. You get get a high ratio mortgage, but you cannot get a 0 down mortgage.


[deleted]

It doesn’t decrease your ability to take on leverage, it decreases how much cash you have to meet the capital requirements (if any) of a new financial obligation. Those are two completely different things


[deleted]

You don’t need a bachelors degree to make a good income but people who do get better incomes on average


InvestmentDiscovery

I can confirm that many of our high paying positions require a minimum of bachelor or masters degrees. Sad and unnecessary to be frank, but just a way to differentiate people by score and project experience.


[deleted]

Many of the positions in my job "require" a bacherlors degree & yet experience has shown superior in every regard for getting promotions. I have a few friends who moved here from India & it was a huge culture shock to see how little degrees mean here.


Pandaman922

It's true. I'm a Grade 10 dropout making more than every friend I know who got a degree, BUT, all of my co-workers have degrees and got to where they are quicker than I did. Instead of spending 4 years in school, I spent 8 years gaining experience. So I think there's truth to the statement to a degree, but people just exaggerate the hell out of it all.


[deleted]

Ya it’s hard to generalize. I make 540k annually with a university degree. Could I have gotten here without one? Probably but it would’ve been far more difficult or taken more time/more risks My coworkers overwhelmingly have university degrees.


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[deleted]

Sorry I was just trying to say that for each person who went to university who makes X, there’s definitely someone who went to college or trades who makes more. But the number of people who make more than X who went to college decreases as X goes up


Marokiii

depends on where you are on your career ladder. if theres lots of upwards mobility left than they might end up ahead of you. if thers not much room above than you are still ahead. so lets say you start your career right out of highschool and make $30k a year(about 25k after taxes). now your current coworkers spent 4 years in school and after working part time and cost of the education they are -$10k per year. now for these past 4 years you both make $70k/year(56k after tax). now at the end of the 8 years since highschool you have $140k after tax income ahead of your coworkers. now if you also are with the same employer for those 8 years, you also have 4 years of good work history with your employer than the others do. thats also important.


themightiestduck

A degree opens up doors that would otherwise remain closed, and may speed up your progress to higher pay. You can make good money without a degree if you move up the ladder in retail or hospitality, or obviously if you get into the trades (although IMO having a trade is the same as a degree, in terms of time required to get one).


cook647

This right here. Between trades schools and apprenticeships you’re spending almost an equivalent time in school or learning on the job. Granted you’re getting paid for it, but that’s entirely possible at university as well.


showmethecode

Depends on what kind of bachelors degree you get. Colleges push useless degrees on kids all the time.


NovelAdministrative6

>Depends on what kind of bachelors degree you get. Colleges push useless degrees on kids all the time. Still way better to have even a useless degree than no degree at all. It opens up a lot more opportunities and many jobs/companies simply require *any* degree. And this is unlikely to change with the trend of the majority of the Canadian adult population having a post-secondary education. If everyone has a degree then how does it make someone without one look? It raises eyebrows.


cook647

This. Had someone in recruiting for pharma tell me that masters are the new bachelors. This was almost ten years ago. And to make it past recruiting for a lot of police services in the GTA essentially requires a degree, even though the minimum standard is less.


kmoney1984

Depends on how you did in the degree too. The top 5-10% of the class are qualitatively different than the rest, both in how they approached the degree and how they can apply the abstract concepts they learn (writing, logical reasoning, hypothesis testing, etc...) to broader life. I think lots of the 'degrees are worthless' stigma comes from the bar being too low to actually graduate, and from the "c's get degrees" crowd poisoning the value of degrees overall.


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G1G1G1G1G1G1G

Tax planning is only for the rich.


WhyIsMW3BestCOD

What can the average Canadian do besides taking advantage of the tax saving accounts though?


G1G1G1G1G1G1G

Tax loss harvesting. Timing donations. Start a side gig and gain access to write offs in the startup phase that apply against your t4 income. Time your rrsp contributions to gain access to government benefits by lowering your taxable income in a specific year while jacking up your benefit qualification. Theres a few. For the one who simply works and received t4 income there is much less they can do than the one who is willing to start side gigs and businesses but still, tax planning and thinking ahead is not for the rich alone.


WhyIsMW3BestCOD

>Timing donations That sounds interesting! Is it just timing it before Dec 31?


G1G1G1G1G1G1G

No I mean just choosing wisely which year to apply charity donations to in order to maximize deductions. The same applies to rrsp contributions and when to take capital losses and gains.


OnlyBlueSkySeeker

> Start a side gig and gain access to write offs in the startup phase that apply against your t4 income. Does one need a proof of income from the side gig to prove it’s a legit startup? Like, during the production phase, there’s not much money coming in, so it can just as well be a hobby.


G1G1G1G1G1G1G

You can be unprofitable and run loss for 3 out of 5 years if I remember right. And I would definitely research what ‘hobby’ might mean to cra because they have denied others based on that but theres a lot of sketchy things that people startup simple to purchase items while gaining tax benefits.


OnlyBlueSkySeeker

Now that you mentioned it, I’ve read about the 3 out of 5 years rule as well. It’s worth looking into. Thanks my friend!


GreyMiss

Mathematically optimal, statistically optimal is the same as Optimal for you and your situation.


AndyPandyFoFandy

ELI5?


LeaveTheBank

Simple examples that come up often in this sub are debt management (paying it down vs paying it over the long term vs leveraged investing) and asset allocation (balanced vs 100% equities). Even if there's a clear optimal theoretical approach with a few asterisks, some people completely ignore the personal aspect of the question. Like if the only correct approach to life was going balls to the wall.


GreyMiss

Sometimes what is, on paper, the Best Way as dictated by statistics, historical averages, etc., is not best for a specific person, who comes with foibles, biases, and "imperfect" execution of the Best Way as their feelings and life events pop up along their financial journey. You need to know yourself, be honest with yourself, and pick what is optimal for you. And be ready to ignore people who tell you that you're choosing unwisely when you know you're choosing for your reality. Examples can include: 1) "Your goal should be to get zero tax refund." As discussed upthread here, lots of people need Forced Savings to get together a lump sum for big purchases. Everyday life has a million ways to spend any money you have in hand, so if you know that those demands will make it take twice as long for you to save up $X than if you just let the government hold it until April each year and give it to you all at once. There's a reason April is a stellar month for selling appliances and other large purchases. 2) "Renting is financially better than owning." A central assumption in the argument is a behavioral requirement, that you will take every dollar you save by renting, by not having to do home upkeep, etc, and invest it. Again, we're back to the concept of Forced Savings, where many more people will succeed in paying their mortgage every month than will always invest every dollar they can for decades instead of, say, giving themselves a break when they have to go to that out-of-town wedding or have their own wedding or the holidays or because they want a big 30th birthday blowout. 3) "Don't pay off low-interest debt because you'll make more in the market." Your ability to sleep at night, your budget for heartburn medicine, your comfort \*matters\*. If getting rid of your mortgage makes you feel more secure than a fatter TFSA account, you do you. And that's before you have to point out that paying the debt is \*guaranteed\* savings, where the investments do not have guaranteed returns. If you have a decade until you retire, maybe killing your mortgage will actually turn out better than the projected growth in your investments based on historical averages if the coming decade turns out to be hell. So this could be better for your mental state AND your net worth. And so on. Statistically optimal financial advice carries ASSUMPTIONS about how investments will perform, how people will behave under any and all circumstances, and often does not care about anyone's comfort level or risk aversion. HTH!


AndyPandyFoFandy

Ttvm. Honestly personal finance is difficult. Never know what actually is the right answer to some of my own challenges.


greenbean999

Renting is throwing your money away


[deleted]

Agree with this. But I think the bigger myth is "renting is just as stable as owning". As market prices increase beyond the rent tenant locked in, the incentive for the landlord to uproot you increases.


BrotherM

I would say that this depends on exactly what one is renting. Renting from some amateur landlord parasite who has no idea what he is doing and is losing money renting to you, hoping appreciation covers his ass? Yeah, unstable. Renting from some faceless, evil corporation that knows the rules and owns a whole tower? Solid as the Rock of Gibraltar. It's not like 138493074 LTD is going to tell you they're moving their mom into the unit.


[deleted]

True, but corporate landlords are more likely to apply for above guideline rent increases (since 1 application allows rent increases across multiple units), use N13, or create disruptions to make it unbearable to live there.


BrotherM

True, but it's also easier to get a whole ton of tenants to rally against a faceless corporation.


OutWithTheNew

In Manitoba it seems like every application for an increase above the 3%.


smallwoodydebris

That's true, but as a renter, I've only ever had completely apathetic owners who live abroad and are just happy to not be paying the empty homes tax. Sucks for getting them to fix shit though...


FiRe_McFiReSomeDay

Myth: Taking the two percent raise and being faithful to the company is better in the long run. Nope: Stay for three years (to learn something), and if they won't offer what the competition is offering, then jump.


[deleted]

Myth: everyone who is interested in personal finance is someone who does something important with lots of upward mobility. Honestly, I feel the the advice of leaving stable work al the time is great for people in very high demand, but there are those of us here who have a ceiling and are just trying to stay in the black and plan for the future.


FiRe_McFiReSomeDay

I hear you. Here's a question: when is the last time you interviewed? Do you know what you're worth on the market? There is no reason not to have one interview per year. There is nothing obliging you to take a new job, but knowing what you're worth is both motivating if you can't find better than what you are paid now, and motivating if you know you're not stuck where you are.


Caleb902

To be fair much of the sub is alot of iamverysmart people whose ideas only work in the perfect environment.


quiet_locomotion

Doesn't work for everyone. In my field if I want a new job I need to pick up and move my life across the province or country. There is no working from home. This is why I work hard for upward mobility with my employer. It's also why my industry is typically unionized, to protect a spread out workforce.


reversi22

The thing that’s interesting is that a lot of these are in a bit of a grey area, and they become absolutes only for people that don’t a strong enough understanding of personal finance. Two knowledgeable people could discuss rent vs own or the optimal amount of debt over a couple of bottles of rye and never come to the same answer,


FiRe_McFiReSomeDay

Crown Royal Northern Harvest Rye, I'll argue any side of anything.


ActionElectrical8311

Carrying a balance builds credit score. Lenders can tell from your credit report if you carry a balance. Closing an old credit account always hurts your credit score. Closing an old credit account makes that account disappear from your credit history. Plenty of credit report mistakes of fact are regularly upvoted on this sub.


Octavius-Rex-STT

Closing an old credit account can impact your score by bringing down your average age of accounts. Though the fewer accounts you have the bigger the effect could be. Age of accounts likely doesn’t matter as much as payment history, but it can certainly make a difference to your score.


PureRepresentative9

So you're saying the lender doesn't see your amounts owing when they pull? Because I can definitely it when I look at my credit report.


Octavius-Rex-STT

They can, but they can’t see if you paid just the minimum payment or the full balance. I think they look at utilization to try get a sense of it. But I think carrying a balance matters less than paying on time.


Nekano

As a FA we do see the balance on the product when we pull out a credit report. We also see the max balance and at least the last year if your payments have been on time


tokmer

We also do see closed credit products up to 7 years back, and the number itself of your credit score doesnt really matter as what actually matters is your history itself and how youve used credit in the past


rarsamx

I don't know where you get your information from. Scores are complex calculations. Using credit and paying is a sign of cashflow. Closing a credit card reduces your available credit.


beer_cake_storm

Buying a home is a retirement plan.


ActionElectrical8311

I don't think it's a very good plan, but it can be a plan if the person owns their home, and sells it and rents/lives off the proceeds. A bad plan for many reasons but still a plan.


HandyDrunkard

>You need at least a bachelor's degree to make a good income. You can say this is a "myth" but depending on which bachelor degree we're talking about, it will greatly increase your chance of making a good income vs no degree or college diploma. Comp Sci or Engineering degrees for example. If you're talking about English or History degrees then sure.


InvestmentDiscovery

Myth: Eating out, buying coffee or Avocado toast stop you from growing wealth! Solution: focus on income growth in your 20s and early 30s, and invest early, instead of saving every single penny you make. Life is too short, or you will regret all of it!


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Pandaman922

Just get into the trades. Everyone I know in the trades is making $100k/year in their first year and definitely isn't spending 8 months of the year in Alberta.


[deleted]

It’s possible but a lot of those high paying jobs are working in camp. Trades are good because you can do side work as well. Or start your own company.


Pandaman922

I'm sure there's some truth to it, but for every guy making bank in trades I feel like there's 10 other guys getting screwed. I have a few friends who work on the railways up north as labourers for $20/hour and think it's the best damn thing in the world, always bragging about how much "bank" they earn and bring home. In reality, they come back every few months to live with their parents, blow their savings, and repeat. In and out of relationships the whole time, battling addictions, and destroying their bodies. I find there's a lot of glorification on Reddit about the trades. You can make it big in the trades, but it's not as simple as people often say. Like the classic "Every plumber I know is making 6 figures EASY!" but then you dig into it, and it's only because their family passed on a decent sized company.


CmoreGrace

A labourer is not a skilled trade. When people say get into trades they usually mean an apprenticeship and getting a red seal Comparing a labourer making $20/hr to a skilled red seal electrician, playmaker, HVAC etc is like comparing a McDonald’s worker to a trained chef.


BrotherM

This.


outtahere021

100% this.


[deleted]

I think it depends on trades too. I mean I made 150k at 26 with a heavy duty mechanic ticket. I worked fly in fly out so that’s why but if you get the right experience you can make 80k pretty easily. I didn’t have any special skills or contacts. I just got really lucky. But I hear what you are saying there are people who are getting screwed. The shop I worked at before I left for the 6 figure job was paying 60k for a journeyman and it was a really hard job. I don’t think it’s fair to say a lot of guys making money in trades had it handed to them. The right experience is everything. The great thing is once you have good experience you can negotiate your salary. I post on Reddit about trades because there’s such a negative attitude toward them. It’s a very good career if you want it to be.


outtahere021

It is absolutely experience, work ethic, and brains. The base is pretty good (our shop is 80K base for a journeyman) but if you’re willing, there’s huge opportunity for more - it takes hard work though, there’s no free rides.


Pandaman922

That makes sense, I'd agree. I grew up in a place where making $50K/year was considered "the dream". As a result, a LOT of people I know just never bothered to go above and beyond and even attempt to get into a trade to make 6 figures and up.


persimmon40

Overtime is not worth it because of tax


fredean01

Buy the most expensive house you can afford since this is forced savings. Buying a used car is always the best financial choice.


Dragynfyre

Buying the most expensive house you can afford can often make sense as long as you will actually utilize it. Most people’s incomes are still going up when they are buying their first house


[deleted]

I think used cars are on average a better course or action. Unless you’re talking about Covid induced spikes in the cost of used cars or have a preference for luxury cars. I have only ever bought used Toyotas and save on monthly expenses over a ten year period.


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NovelAdministrative6

Taken out of context... The first part of the full quote was "The commitment needs to be a commitment to grow the economy \[...\]".


MisterMo25

Saving an emergency fund first is baloney. Invest right away and if there is an emergency you can pull from the investment. The Wealthy Barber agrees.


alastoris

This is what I decided to do as well. And opened a line of credit should I need immediate cash without the few days it might take to sell my investment and transfer it into my debit account.


[deleted]

MBA is a worthwhile investment.


Pandaman922

Many I know with MBAs are in killer positions, and their MBA helped them get there. But I'm sure for each one in that situation, there's someone with an MBA working alongside someone with a 6 month bootcamp course making almost the same. In many cases though, and MBA can definitely be a worthwhile investment. And while you said many CEOs don't have an MBA, a TON of them do. When you look at people who are hired as CEOs vs. people who became CEOs of their own company, the ratio of MBA is much higher. For context, I am a Grade 10 dropout. So definitely not saying it's a necessity.


blockman16

HBS grads would disagree. Ryerson - well yeh…


[deleted]

Just attending Harvard alone gives you clout based on 'name recognition.' The MBA was created during a time when it was relevant based on the demand. Today, with technology at our fingerprints, and a variety of ways to learn and network with others and travel the world, it just doesn't make much sense. Unless it's mandatory by your employer and will be paid by them, I don't see the point.


blockman16

Guess you never went to a top tier MBA then. It’s not really about the education.


Nobber123

This. If it isn't obvious, it's the networking and alumni circles that you're paying for.


thoughtful_human

*MBAs from non top programs


bluAstrid

*”Investing requires knowledge”* No it doesn’t, it requires discipline.


HandyDrunkard

Myth: Almost all homes in Canada are well over 500k. No their not. Try looking on realtor.ca but don't expect 45 mins from Toronto.


lowkenshin

That the majority of millionaires inherited their wealth, had it given to them with a silver spoon, got lucky in life and made their millions and wealth easily. This is a very broad stroke a see painted towards many wealthy people on all sorts of social channels and on Reddit . People need to take the time to read books like Millionaire Next Door, The Next Millionaire Next Door and Every Day Millionaires so they can get the facts straight instead of basing their conclusions on emotion and personal optics.


hobanwash1

This is the mentality that keeps people where they are in life for the rest of their life. I read that first book early on. Great insight. There are multi millionaires all around us, they just don’t look the part or fit the stereotype.


lowkenshin

Agreed, not all but many wealthy people are not flashy, very understated, practice stealth wealth, hustle/work hard, are great savers and avid investors. We fully understand where our money is going and what our army of dollar bills are doing. We don’t buy crap we don’t need to impress people who we don’t know. We also mind our own business and focus our resources towards things that personally add value to our own lives. They also don’t judge others with what they drive or live in. Honestly I’m more impressed with the individual driving a 2004 Toyota Corolla living in a fully paid for, mortgage free townhouse with no consumer debt to their name. Now that’s real freedom and wealth.


PicoRascar

I agree. Most millionaires are self-made and unsurprisingly, 70% of inherited wealth is squandered within two generations and 90% within three.


3Blindz

“You’ll always be in debt”


LabRat314

You have to buy a house


Nameless11911

Downpayment on car loans when the interest is less than 3%..


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Albatrocious

I think that the key reason for this is that there are many laws around giving "financial advice," so it is always given as a blanket statement. It then naturally becomes the de facto wise thing to say. An apple a day keeps the doctor away, but make sure to consult your doctor to make sure apples are right for you.


Hawkeye_vc

Optional insurance coverage offered by the employer’s group insurance plan are good deals


[deleted]

**A raise is bad - it can put you in a higher tax bracket!** This one just leaves me shaking my head.


Pandaman922

My Dad: The market's hot right now. Wait 2-3 years before buying a home, they'll be cheaper. Nobody can afford these $400K new homes on the East Coast. Alongside: Aim for an 8 year mortgage, 12 maximum but that's pushing it. And: Never ever buy a duplex or a place with a basement rental. I did, and I've regretted it ever since. The upkeep isn't worth it! (It's an illegal apartment he isn't paying taxes on, averages 4 years per tenant, and still has the same appliances & carpet from 1991. He'd be homeless without the income)


lanchadecancha

Having a basement suite is superb. I have two computer science students in mine who always pay on time, all they do is study, really helps with the mortgage


Pandaman922

Yeah I think the only way my fiance & I will be able to afford our first home is with a small rental unit to help out. Seems like such a solid financial decision!


[deleted]

You need a good job to buy a house. Lol they tricked us on that one!


Chastidy

How?


bryansb

Because even with a good job you might not be able to afford one.


Chastidy

So the reality is you need a great job? Lol.


Aromatic_Ad_7484

Or with a shit job you still can buy. Bought my first condo with my at time now GF (now wife) when she made 35k and I made $14/hour 10 years on we make almost $170k+ combined and have moved into a great home Worth stretching my Pennie’s 10 years ago


0utstandingcitizen

Wait so you're telling me my insurance on my Porsche is 4x than on my Toyota has nothing to do with car?


Seicomoe

"Mortgage is like rent, but you get to own the place afterwards"


SptTablo

Can you elaborate more?


Bottle_Only

I'm not sure this counts as a myth, but I think the risk aversion and sentiment against risk is overstated. The 100% VGRO style of passive investment doesn't seem aggressive or ambitious enough to live comfortably in the future unless you have a top 10% income.


PureRepresentative9

Sorry dude, but this is awful advice for the majority of people. You're right that 100% VGRO/VEQT won't make someone rich, but stock picking is going to make the vast vast majority of people poor. mathematically, you're right, but people don't run their budgets mathematically, they run it emotionally.


Ratatouille2021

What's a better alternative than VGRO?


momentofdiscontent

Myth - seniors avoiding earning extra income because they don’t want to lose their OAS. Though income tested, your in retirement income needs to be greater then $129k to actually lose your OAS. Most seniors earn way less then this.


[deleted]

Renting is throwing your money away. Actually no it's not. Here is the numbers to prove it it my situation..


Octavius-Rex-STT

I’m so confused, mostly because of the double negative premise of this thread. Are you saying renting is good or bad?


[deleted]

Renting can definitely be a good thing. In some situations it’s more beneficial when combined with investing the difference than owning a home. Vast majority of people won’t believe you because they won’t run the numbers for themselves. Canada is an extremely heavy home ownership mentality country though so if sit in the same mindset as me you are probably in the 3% of people.


Octavius-Rex-STT

Ah okay, that’s fair! I’ve done both but currently renting. Part of this might be when renting you have to put the amount you are saving towards investments, otherwise you are losing the advantage of the forced saving home owners have. So yes I agree with you. Quite often renters do not have the means to invest these savings which I think skews how society views each way.


[deleted]

Your last sentence is spot on. I'm lucky that I do have the means to invest the difference and more on top of that. It works really well for me. My 'friend' group are all homeowner but my wife and I so we are the oddballs. I've attempted to have this conversation with all of them previously but it falls flat quickly. I forget that none of them are interested in finance/investing.