A million-dollar TFSA, https://business.financialpost.com/personal-finance/taxes/the-road-to-the-million-dollar-tfsa-is-getting-shorter-for-millennials, sounds great except I’m not 100% convinced about these assumptions:
a) earning 4.7% yearly, compounding annually,
b) continuing to put in max $$$ every year for 47-consecutive years without fail.
There are simply too many ups & downs over a lifetime.
But, say you buy a half double like one of my daughters did a few years ago in Ottawa for $345,000 after which she put in a basement apartment for $80k for a total investment of $425,000.
She rents her basement apartment, so she manages to live in a 3-bedroom, 2 and ½ bath home for just $600 a month after paying for everything (mortgage, property taxes, insurance, repairs, maintenance, tech package…)
She was 26 when she bought it. After 47-years (and if home prices go up 4.7% a year, which seems likely given that in many desirable North American, Asian and Euro cities, it’s much higher than that), she will have a place worth $3,680,297. She needed $80,000 in equity to do this ($5,000 from her and $75k from the bank of mom+dad).
Which is more likely to succeed as an investment strategy? You decide.
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