Why the average person is broke

Geoff Cook - CFP, CHAIP

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Of 100 men at age 65

  • 54 will be BROKE (live too long)
  • 36 will be DEAD (live too short)
  • 5 will still be WORKING (no choice)
  • 1 will be RICH (money at work)

Source: Statistics Canada

Why the Average Family/Person is Broke !

The Situation
Start working: Age 30
Retire: Age 65
Working Years: 35 Years
Average Income: $50,000 per year

Total Income Produced: $1,750,000 = $50,000 x 35 Years Income
Total Taxes Paid: $550,000 ( 31% )
After Tax Money Left: $1,200,000
Mortgage Payments: $600,000 ( $400,000 Home / $300,000 Mortgage )
Money After Mortgage:$600,000

Whats left/Money to Live per year: $17,143 / year or $1,428.57 / month ( $600,000 / 35 years )

Why the Average Family/Person is Broke Cont...

Money After Mortgage: $600,000 ( Food, Shelter, Clothing, Transportation )
Food: $383,250 ( $5/$10/$15=$30/day x 365 days x 35 Years )
Money After Food: $216,750
House Cost: $140,000 ( Property Tax / Utilities $4,000/yr x 35 Years )
Money After House Cost: $76,750
Transportation: $76,750 ( $25,583 x 3 Cars – change every 11.6 Yrs )
Money Left: $ 0

What about: Children Education, Vacations, Furniture & Goods, Retirement,etc?

When dealing in financial matters, you are urged to consult an advisor for legal, tax or investment advice. Every effort has been made to present information in a clear, exacting manner. However neither the publisher nor the authors can be held responsible for any losses incurred due to the actions of any individual as the result of this post or any errors or omissions contained herein.

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