Anecdote extracted from ‘Financial Facelift’, Globe and Mail, 10 Dec 2010 –
With a stable job as an environmental engineer and a $100,000 gift from her father, Kamala naturally wants to buy a first home. She’s 34, single, and has no plans to marry and have children. But she lives in Vancouver, where a modest condominium apartment will set her back about $390,000.
She plans to go to graduate school in six or seven years to train for a completely different career in which she will be a self-employed professional with no company benefits or pension plan.
“I’m wondering if both owning a condo and saving enough for retirement are possible with the gift from Dad.”
Monthly net income: $5,290.
Assets: Bank accounts $15,420; Canada Savings Bonds $100; RRSP $80,000; RSP with employer $32,000; tax-free savings account $5,070; employer pension plan $2,405. Total: $134,995.
Eric Davis, a financial adviser at TD Waterhouse Canada Inc. in Kamloops, B.C. advised “Buy the condo, take advantage of the government’s home buyers’ plan to help with the down payment, and continue to contribute to the RRSP.”