$30k Monthly Income! | Millennial Real Life Budget Review Ep. 21

Welcome back to another episode of millennial real life budget review. Today we are taking a look at a couple who lives in Toronto, and they're bringing home a monthly take home of $30,000. Whoo, I am very excited to jump into this one. So let's get started. Hey guys, welcome back to the debt free millennials channel. I'm your host Justine and in this channel we talk about all ways to help you achieve financial confidence crush debt that leads to more fun and fewer payments. If you're into that lifestyle, if you want to achieve that or you're already there and you want more motivation with your money, be sure to hit that red subscribe button. And today we're taking a look at this couple who brings in a lot of dough. So they are from Toronto, Canada, and the person who filled this out is a real estate agent, which might kind of tell us why the income is so high. They actually have $120,000 in their emergency fund. Their top three goals are to invest 350,000 by 2026 love the specificity of that pay down the mortgage to 500,000 by 2027 and buy a second car without debt within the next year or two. Once the current one dies, they have two cars currently, but one will die soon. They struggle with allocating exact amounts to different types of investing and or if they should pay off their mortgage. So because this person is in sales, they want to have at least eight to 11 months of living expenses set aside in emergency fund. Their income has been over $250,000 per year before tax for the past four to five years. And then it says here, my wife makes 60 to 70 K per year as a payroll manager and is a hundred percent remote. They owe $730,000 on their mortgage and the interest rate is currently at 6% with three years left on the existing term. So it sounds like they have maybe an adjustable rate mortgage. It could go up, but hopefully in three years, hopefully it goes down. They have no other debts besides credit cards, student loans, or car debt. So besides the mortgage, they don't have anything else. Let's go ahead and hop into their budget and see what's going on. I love taking a look at budgets where the monthly income is a lot higher than anything that I've personally budgeted for or have seen on these real life budget reviews. So you can see that they have a total planned monthly income of 25 K. Their total monthly expenses is only $12,000. So they're netting quite a bit. So this money actually really needs to have a home, the 13 K. And this is where I think you could get really intentional about setting money aside for a car and paying cash for your car and also putting it towards your investments. I saw here up at the top, you had a couple of numbers, the 5, 2, 1, 10, 20. So I don't know if this is current savings. I'm guessing it is. So if that's the case, then that's something we can discuss when we get to the investing section of your review. So let's take a look at some of their fixed budgeted items. They have a mortgage of $5,500. I know in Canada, it's a little bit more expensive. This is very comparable to LA though. I will have to say that is LA prices. They've got about 13, $1,400 in groceries. Holy cow. That's so much house maintenance of 1250. I'm assuming this is kind of like your house maintenance fund in case something were to happen. Kid expenses. They did say that they have a toddler. And as I was thinking about your emergency fund, I was just kind of totaling things up. One month of basic living expenses for you is over $10,000 insane. So a fully funded emergency fund of 11 months for you would be around 115 K since you already have 120,000 you are good. You are set. You don't need to do anything else here. It does look like you overspent in restaurants for the month. So you were budgeting for 50, but you actually spent eight 29. So this would be an area that you're either going to increase or you're going to somehow decrease the amount of spending that you're doing here and the fund money spending. I mean, I don't know what you're spending on, but it seems reasonable to me given everything else. And then it looks like you want to set aside $5,000 for investing. Also I didn't see the car fund here, but if I were you, I would go ahead and make that car fund and figure out exactly how much you want to put every single month towards the car. So what you have to do there is figure out exactly what make a model in year that you want to purchase for your vehicle and then shop around for a price range for that specific car. And then ask yourself, how quickly do you want to set up that goal? Do you want to hit it in a year? Do you want to hit it in two years? You can easily, easily hit a car fund goal in a year. If I know that you're netting 13, if you're actually bringing in even more than the 25 K between 13 and 20 K left, wow, you could hit that in like three months and get a really decent car for 35 to $40,000 and be done. So I almost feel like let's fund this quickly first. And that's even setting aside $5,000 in investments. And then we can really talk about your investing situation because you're in Canada. The investment types and accounts are different than the States. And so I was kind of researching this on my own. Clearly I'm not Canadian. And so I've had to familiarize myself with the registered retirement savings plan and then also your tax free savings account, which I think this, this program is awesome. So I hope you're taking advantage of these two things so that we can start building up your investments. Also, I wanted to point you to this amazing tool called projection lab. Projection lab is a financial planning simulator tool in which you can track not only your net worth, but you can calculate and input different scenarios to understand your retirement projections and what that could look like, what kind of money that you might have during your retirement years. So I actually went ahead and put this into the simulator for you. There were a lot of liberties that I took and just kind of guesstimating what your current financial situation is. I kind of knew from the budget, but I didn't know in terms of what type of investments you had. And so I just put in random numbers. If you go to projection lab and make your own account, and I will leave my affiliate link below for you to sign up. You can actually test run this for free and just see if you like it. And then after that it is a paid subscription, but it's super cheap. It's so nice because in here you manually update your account. So it's none of this back and forth, trying to authenticate your banks or trying to connect your investments from Vanguard or fidelity or from your bank. It's just manual process, which I actually really appreciate because I own and control the data. So I went ahead and put in that. And I also put in the income levels that I knew for you and your spouse. So two 50 and 65 K I put in your living expenses as the $12,000 per month, which is what I saw from the budget. And then I added some things like vacation and then medical expenses as you get older. And then I added in your assets. I don't know exactly how much your cars are worth, but I included both of them. One valued at 14 and a half and then the other at 9,000. And then I'm not sure what your house is valued at either. And then also paying for a car in, I think a couple of years is what I put. Yeah, two years. So you can see your net worth and your investments and your debt over time using this chart. Then you can see exactly when you want to purchase a car, when you would sell a car, when you would retire. So in this instance, I have you retiring at age 60 and then your spouse at age 60 as well. And I'm not sure what your guys's age differences, but that's kind of the, the play out that I have. So if you were to kind of keep on this trajectory, then you'd have a net worth of 2.488 and that's all dependent on exactly what type of investments that you have. Is it truly this registered retirement savings plan yours and hers, or do you have the tax free savings account? Maybe you have other taxable investments that I don't know. This is where I think projection lab is really going to help you figure out whether or not you can hit the three 50 in a couple of years as you wanted and paying down your house so that we can see exactly how much money we have for each of these things. I truly think you could pay down your house, uh, faster, but the thing is about paying down your house when I'm thinking about paying it off in general, I'm only thinking about that in terms of, is this a house that I could see myself living in longterm? Is this my forever home? If it's not your forever home and you have a sense of maybe you'd be moving them, perhaps paying off the mortgage isn't the right scenario for you. You have to think about that in terms of longevity or you're like, I love this city. I love this neighborhood. I love this home and I want to pay off the mortgage. That's kind of where I would think paying off the mortgage would make sense for you. Projection lab would be a great tool for you to utilize on your own to see exactly how these numbers are calculated as you go throughout your time of like investments. So out of your budget, I'm going back to this. I mean, we'd have $13,000 to throw to your investments and let's just go ahead and see if we added even just a taxable. There we go. Okay. So I had to play around with some of the numbers cause it wasn't calculated correctly, but I put, I lowered your living expenses to the 6,500 a month because I put the $5,500 payment into the house. So the financing details and put the monthly payment at 5,500. So now this is making a little bit more sense because take a look at what happens to your net worth over time. It just continues to balloon up and up 4.9 million by the time you get to your sixties, your mid sixties. That's incredible. Let's take a look at the next 40 years. So yeah, I'm really pleased with how your plan looks inside of projection lab. And you can actually also test the chances of success of this actually working out based off of the numbers. Obviously it's going to change once you get in there and plug in your real numbers, but let's just take a look at the Monte Carlo simulation and you have a 96.84% success rate of actually this plan of having your net worth go. Oh my gosh. Like top 25% had over $10 million net worth and the bottom 10% is 4 million. So either way, you're going to be a multimillionaire. If you continue with these steps and actually put in those contributions, like I think you're going to, this review was a slightly different approach because this couple doesn't have any debt and they're also really high income earners, which puts them at a serious advantage because they are mindful about their spending and they're mindful about those bigger financial goals. They can take a bigger action to hit the milestones that they want. I would really suggest on focus on cash flowing that car really, really fast because you definitely don't want to be in a situation where the car finally dies and then you're stuck without a plan and you don't have the cash to free up or you don't want to pull cash out of your emergency fund, pay cash for that car, do it very, very fast. And then you can start working on maxing out your investments with that free amount that you had. You had over $12,000 in money that you could invest. So really I would take a look at maxing out the retirement accounts that you have. And also really asking yourself the question of whether or not that home is a forever home. If you think like, nah, we're going to try to move out of this neighborhood. We want to be in a different place. Then I'd say paying off the mortgage early may not be the best place for you. If you like these types of videos and these types of reviews, be sure to give me a thumbs up. And yes, there's a lot of missing pieces sometimes when it comes to the back and forth, but I do try to help people remain anonymous and also really help them see like, these are the different scenarios that we could play with. If you liked this video, give it a big thumbs up. And if you want to use this exact spreadsheet that people are using to submit their, their budgets with, you can actually download that for free using the budget toolkit link listed below and I'll catch you in the next one.