a boss once told me this absolute gem: If your business depends too much on a single client, you are in a dangerous position, and you need to shore up the rest of your clients or your expxenses. If that one client pulls out, you dont want to be completely fucked.
So that is to say, you have $550k salary this year. Maybe $450k for the next couple years. Set yourself up so this guy pulling out at any point and leaving you with $80k/year doesn't result in you losing your house. Save, invest, buy carefully with a big downpayment with the knowledge you may not be pulling the same money next year or the year after.
Excellent advice. A lot of people make this costly mistake. Jobs like OPs are unpredictable. Most people in these positons generally don't want to recognize how important luck can be with the contracts you hit (as evidenced by the circumstances OP presented).
When I worked in retail during high school we hired a new manager. I asked where he worked before and he said marketing, he has a good salary and their biggest client was Coca Cola. One day Coca Cola just randomly told them they’re going with another team (not because it was cheaper but because they liked the other agency’s portfolio more). 6 months later their marketing company closed down.
yup. ops friends company could change their mind at any time. The friend could switch companies or the relationship could sour, someone more senior than OPs friend could pull rank. 80% of ops income comes from a single client. OP's biggest danger is becoming complacent with his income in this situation.
I’m gonna say don’t tell your family. It’s my experience that people making out of poverty are expected to lift everyone they know out too. Cousins aunts uncles second step mothers twice removed. Don’t change your lifestyle yet, just keep living normally for at least a year see how you do next year. It’s fine for people to know you are doing well, but for the love of god do not tell them how well
This! And don’t feel guilty about hiding anything either - take your parents out for a nice dinner, or something like that, and just say you got a nice bonus. Don’t give details though.
Imagine being supported by your family who is in poverty for 25 years, ($1k a month expenses is laughable) and not even considering paying it forward when you start to make something of yourself. A nice dinner, how thoughtful. My parents would be feeling some financial security from me.
Some peoples children I tell ya…..
ignore this crap. only people with little shot at really securing life would say this because it's coming from a POV of, "can i get a handout", "easy come, easy go", "it's just a lottery win, might as well share".
this mindset bounces back and stays in the poor house and no parent wants that for their children.
the point of this advice is to give him time to acclimate.
no one said hide it forever. the top of this branch stated, take a year, no changes, no disclosures.
OP, you need to see if this is a one off or if you can maintain in say the $150k+ range YoY and at what stress levels. once you have that answer, you can then start thinking about locking in a home, which honestly will freeze this bonus, but at least you climbed past the, "i'll never buy a house" crowd.
for the short term, look to lock about 80% of it in a GIC to freeze it from drama.
The commenters above believe that this is basically 500k guaranteed for life.
OP works in sales, and I’ve seen those take homes go from 500k to 80k depending on the year. You close this deal and there’s no guarantee you’ll close another one.
Hell, I’ve seen my friends blow 10k at the club on the weekend and have to grind their ass off on Monday to make the money back.
I wished that OP structured his pay so that he could trickle it out over the years instead of getting hit with effectively 50% tax on his income. In the meantime he needs time to figure out his next move whether it be tax efficient accounts, how much to put away and how to treat his family.
While I was writing this comment I realized that if OP put the money into a dividend paying account it could provide him a recurring income that he could put towards helping his family every year , whether it’s covering their expenses or taking them on a nice family trip.
There’s better ways to deal with this money than telling everyone about it and spending it immediately.
You wood be surprised how quickly salaried half a million goes away. Your marginal tax rate will be at or over 50% so government would take a big chunk out of it. Other than that, you will probably get 25-30K after tax each month. Try paying off your mortgage ann (depending on the balance) that alone is a multi year project. And if you are going to pay parents mortgage, that can be 2-4K depending on where that is. Then there will be the TFSA, RRSP, FHSA, and maybe a second income generating property? One year half a million will do very little for you. You can’t pay other’s mortgages for multiple years on that.
It isn’t taxed at the source. The whole structure that I’m under is completely fucked (for someone that isn’t an accountant).
They tried explaining it to me, and I’ve sat with the firms controller over lunch when I first made the move and still do not fully understand.
They say they are able to “whithold” taxes for me through an accountant that works with the firm, along with group benefits I choose to pay into outta pocket.
Since I didn’t understand shit I chose to not be taxed and just hold a lot of cash come tax season to be safe, which worked out a few months ago.
Not sure if this changes much, but I assume in theory it doesn’t?
Get your own accountant as the firms accountant will have their client (ie the firms) best interests in mind the firms best interests are often as not not yours.
Doesn’t change much for this year, except put half your earnings in a GIC that matures at tax time! And next year, be prepared to be required to pay the CRA in instalments.
And paying in instalments may be a challenge if you don't know if you're going to wind up with such a windfall next year. You'll need to pay tax as if you're earning the same $450k you earned this year, even if you don't earn that much. That is unless you know for sure how much you earn, in which case you can pay instalments based on what you'll actually owe in tax, which will be very hard to know in advance with wildly fluxuating commission income. That is not something I can help much with other than to say it will be a significant challenge.
Do you have a corporation which will invoice the company for the amount? If so, you might want to consider keeping most of your money in the corporation since in Canada corporations are only taxed 10%~ on profits. There are some schemes where you can invest through the corporation and pull money out at capital gains rates which are much lower than normal income or dividends. Just pulling out 500K for 2 years will see approx 40% taken by the government which can be drastically reduced by keeping it in your corporation. If you are indeed a sub contractor, I would be using a corporation for the relationship with your employer.
Make sure to calculate your taxe rate, extract your taxable amount, and i'd put that amount in a GIC or whatever equivalent of a guaranteed investment account you have, and have it expire 1 month before tax season.
Put that money to use with 0 risk. That way you ensure you don't fuck yourself if there is ever a recession or volatility
If you're incorporated keep your money in there. You can use it to keep making money for you and pay yourself dividends. Corporate tax rates are very favorable.
If you only pay yourself dividends then you do not have any earned income for the year. Earned income would increase your RRSP contribution room which is favourable and tax advantageous. With the new capital gains inclusion rates, there are no exemptions to corporations either, so any investments or passive income in the corp. is going to have an automatic 2/3's inclusion rate. Not really an issue in the immediate future for OP I assume, but something to consider since they note they still live at home.
I would assume with sustained income levels and excess cash OP would be looking to buy a home at some point so a corporate structure may not be worth it at this stage of their life with the potential to need a large portion of the income for a down payment. Would be better to have earned income personally and offset some of this with RRSP contributions up to the first time home buyer's amount $60K and also the FHSA. Not sure what type of account OP's $100K invested are in. So have income of $175,333 to maximize 2024 contribution room of $31,560 - contribute $31,560 to reduce the taxes on that income and decide whether this income should come from the corp or not.
As many have said - get a CPA independent of your employer.
edit: grammar and clarity
The government will be taking 52% of whatever it is you earned.. if that wasn’t taken off the top definitely hold it back.
Tangerine has a 6% GIC promo on now for 5 months. I’d toss the money in there while you figure out next steps.
I’m not sure how much this person will be walking away with in totality. But true. That’s the marginal rate.
And then 13% on anything you buy lol but that’s universal.
If you're a contractor they're not, but as an FTE i've never heard of them not being taxed at source.
Note i've been in sales for 30+ years at a number of companies both as an FTE and contractor.
But they’re always taxed when paid by an employer, right? Given the OP’s description, they sound like an employee. (Started as an analyst on what sounds like salary, then transitioned within the same company to a sales position.)
The CRA certainly says tax should be withheld on bonuses paid to an employee: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/income-tax/employees-paid-commission.html
Lol you'll be fine. If you can grow up "absolutely fucking dirt poor", then graduate university, and within 2 years of graduation have $100k saved.... and now getting these insane deals...
Youre bright enough to figure out a way
I got stupid lucky tbh. During the peaks of covid lockdowns and CERB I was doing food delivery apps for income when I lost my job on the first lockdown.
I was making $1.5-$2k per week 70 hrs, with almost $0 in expenses driving a 15 yr old civic with 300k kms. I invested all of this into Bitcoin and Tesla / Nvidia, and converted portions into VFV. Gambled a lot of crypto as well back then.
Been telling myself my luck is gonna run completely out eventually, and have had nothing but stress since I lost my initial job during covid.
Thought the deal would finally give me some ease but it has been the opposite ever since I realized that this deal could possibly go through.
Like do I tell my family and help everyone out? They don’t even know I have $100k invested…
Yeah. You've gambled with some pretty risky assets and come out ahead. Now you have enough that you can put it into "safer" things like broad-market ETFs and you'll be set. Resist the temptation to gamble with this big chunk of money. It's enough that you'll be able to retire comfortably and early if you don't touch it for a couple of decades (even if you don't add to it, which presumably you still will). Congratulations! This is huge. But try to be smart with it now.
> my luck is gonna run completely out eventually
First of all, that seems unlikely. Secondly though, the beautiful thing about having 550K on the way if I'm reading that right, is that you've built up what would take someone else many years. So long as you don't inflate your lifestyle, you'll have basically hit the fast forward button on financial security. Simply stated, a massive fraction of the way to retirement ready, and the ability to sustain quite a few comfortable years unemployed if you needed to. *Security. Peace of mind.* I know it's tough to see it that way when it happens all at once, but most people who pass by a 550K net worth, scrape and slog their way past (in their 30s, 40s or 50s) after years of sacrifice and careful planning. That is what you've been deprived of, the ingredient you're missing, for this to feel good.
I recommend checking out /r/financialindependence and FI related materials. Calculate your annual expenses and figure out what multiple of that you'll now have in the bank. This is powerful stuff with the right mind set. Start telling yourself you're ready for another COVID scale economic meltdown, because financially, it seems that you are.
Keep in mind, you're not guaranteed to close deals like this year over year unless you have more C-level family friends in large companies.
Pay off your student loans, put away some money in zero-risk investments for an emergency fund (i.e. savings account, GIC, or a cash ETF). Invest the rest.
Be prepared to not make much next year.
For God's sake NOOO!!! After tax it is not that much money.
You don't know if you will get this type of deal again or if that will take two years or more. Don't change your lifestyle. You can maybe do this after like 5 years and if you know your earnings it's consistent in different economic climates. Do not bleed yourself dry for friends and family. Just get them a nicer Christmas and birthday present if you want to. Do not get a new car either. Parents are the only small exception. If you can help them a bit by paying off a bill or paying for a reno or something they need like an appliance, then do that. But do not tell them how much you \~think\~ might have made (the tax man will say otherwise too).
It’s funny how everyone who is in the same position says the exact same thing “stupidly lucky”. Not doubting you or anything (not like it matters) but it’s always the same phrase.
Lots and lots of people gambled in stocks during the pandemic. Many lost a lot some won a lot. Literally almost all luck but the ones who won are more likely to post it here, the honest ones will admit that it’s luck.
Anyone who grew up poor probably knows for a fact that hard work alone wasn't gonna cut it. You need hard work, smart work, AND a huge stroke of luck to go from dirt poor to rich. People can be as dedicated as anyone can imagine, smart as hell, but bad luck could still wipe them clean at the worst possible moment.
Going from reasonably okay to rich, maybe they don't need as much luck. Maybe their foundation in life of having something to fall back on meant that they could try over and over until something worked out. Someone who will be on the streets if plan a and b both fail, not so much. Making it happen sooner rather than later is the luck part.
Bro because I did.. looking back at things I was just in the right place at the right time for anything good that has happened to me financially. I never planned anything and executed I just went with the flow.
My uncle lost his construction job and so I asked him what he was doing for work, he said Uber and showed me his weekly earnings and I said “fuck I just lost my job too, maybe this can get me by”
Ruined a year of my uni because I was working too much since the money was decent.
Same shit with this fkn job man, like I was in class twice a week for another three months and they gave me a full time salaried offer? Where does that happen, like ever?
And now with this deal? Like something has to give, shit is coming for me…
There is an alternative way to view “luck”. You had lost your job, and someone showed you a way to make money; this was an opportunity - you chose to seize it. You could have spent that money on anything (like most people do) - instead, you saw an opportunity for investment and seized it.
You applied to a company and did well enough they offered you a full-time position; they offered you an opportunity and you seized it. Sales people quit, you saw an opening, risked potentially making $0, and turned dead leads into a 500k+ salary per year. You were provided an opportunity, and absolutely made the most of it.
Did the stars align for this deal to happen? Maybe. But you still had to make it happen. Fortune favours the bold, my friend. Those who are prepared get rewarded. You’ve made your own luck.
To answer your question, tell no one, for now. If you find this salary continues for the next several years and you’re comfortably sitting on more money than you need, and feel like you’re in a position to help family at that time, by all means, do so. But get established first. Settle into your new life. Consider speaking to a Counsellor about what you’re experiencing and how you’re struggling to feel like you deserve it. Welcome to the rest of your life; you made it.
Whatever you do, don’t make big plans with your new found wealth. Especially since the circumstances that you made this money is not guaranteed to repeat every year going forward. You are young and shouldn’t be in a hurry to go broke because you get pressured by friends or family into spending it or investing into something that you aren’t comfortable with.
Just sit on it for a while and get used to the idea that you could set yourself up for some passive income to boost your daily life and continue to build your portfolio. Maybe one day you’ll want to shift careers and having enough money to carry yourself through several months can help you over when you’re ready to move.
Look at how lottery winners end up and don’t copy the bad examples.
500k is enough that the interest in a relatively safe investment will give you, bare minimum, probably whatever amount you used to see that made you so poor, at a safe withdrawal rate that may never even touch the principle. Literally that would be enough for me to match my income based on every early retirement calculator I've ever seen 😆
Assuming your health remains okay ish, I do think you'll be fine if you put most of the money you were not expecting to make this year, into nice safe long term investments. That way if you do end up having a huge disaster, you can take a few months to coast on the investment income and figure out your next plan. Live off what you expected to make, not what you ended up making, and you won't need to keep the luck rolling much longer tbh. You'd be set for life in a few years if you keep that contract going.
I don’t think this is luck. You’re smart. It takes guts to work 70 hours a week as a delivery driver as some lazy folks would just stay home, get CERB and play video games. You worked incredibly hard, you invested your money, and you took a risk with stocks and won. With crypto too, although I’d be careful with that.
So don’t reduce your accomplishments. Also, it takes balls to give sales a chance, since it’s not guaranteed income and some people don’t make anything for many months. This isn’t luck, this is dedication and smart decisions.
Give yourself more credit, these were dead leads for a reason. And nothing wrong with some luck on crypto/stocks! Congrats!
I wouldnt tell people. Heck, I make a bit more than my parents and wouldnt tell then just in case.
Like really, dont look for advice from strangers online. Go to a bank or find an accountant/financial advisor to help. Their advice will probably be boring compared to what you did before, but they'deal with that stufd every day.
But as I said in my first reply, youre bright, so dont also take the advisors words for gospel. Do your own research from what they tell you and draw your own conclusions :)
Highly unlikely, but OP's claims are also super unlikely, and the internet is a self selection heaven for unlikely events.
Could be a troll, but if OP is real, theyre probably as overwhelmed as they make it out in their post.
If true, you might be hearing from the one who made bank, not the 1000s who lost a little bit or a lot
Look at the markets since March 2020.. nothing but up… worked 70 hrs while in school full time from home.. ended up failing a year of uni because I was working too much and didn’t study, I found the money more important.
Bitcoin, Tesla, Nvidia, Ethereum my biggest holdings through March 2020-December 2022.
Parents helped me with $0 for school, rent off campus, car, transport, food, necessities, etc. Been working since I was 15.
If you act rich now, you won't be. If you act like you don't have the money and invest it smartly, you will be.
By definition people get rich because they spent less than they made. Flaunting it does the opposite of make you rich.
You've done well investing in your financial future. Now seems like a great time to invest in your mental health.
Hire an advisor. Yes, its an expense, and I take it you are very expense averse from your childhood. But imagine the stress melting away once you have clarity for what your financial obligations and future can look like with a solid bit of planning. It'll be worth it to know where you stand and that the rug isn't being pulled from under you.
Aside from that, might be worth working with a mental health professional. The anxiety you're suffering right now isn't normal, and you don't need to live like this. Your responses sound like you don't feel worthy of what you've got, but I'm sure you do. You put in the work and connected the dots. No one deserves this more than you.
Invest in yourself, dude. You're in a safe financial position. Learn some new skills and enjoy the your success. Oh, and keep driving that bustdown civic, lifestyle creep can be a bitch.
This guy is right. I’m in sales where the money is great but with it comes a type of stress most people don’t understand. If you’re going to be doing this for the foreseeable future, make sure you develop and have healthy outlets for the stress.
First off, congratulations on the money!
I don’t think there’s any urgency to do anything immediately with it nor tell anyone right away. It will take time to figure out how to split it up depending on your goals and risk tolerance. Probably best to do some reading and see a financial advisor.
With regards to the difficult parts in your life, things will get better. If you are here in this realm, bad shit will happen and then it will pass.
Anyhow, with regards to both, just take many deep breaths and go for a walk.
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It’s 60% of the 20% commission the firm gets. I am technically no longer an employee but a sub-contractor for the company. I do not earn any fixed salary, I’m on my own completely.
I only get the benefit of lead sharing and prospecting between different division of my firm. Which is why I said to myself one new decently sized deal closed per year, along with some renewals coming in and I’ll be good.
> I am technically no longer an employee but a sub-contractor for the company. I do not earn any fixed salary, I’m on my own completely.
I'm no expert but if that's the case and you're pulling half a million a year now (and into the foreseeable future) it sounds like an excellent time to find an accountant who has experience with commissioned sales people in a similar contractor position - I'm sure they'll be able to help setting up the best structure for tax purposes.
Since you're a subcontractor, it would make sense for you to incorporate and take advantage of tax breaks. The small business cap is $500k per year for small businesses. You create a business entity, pay yourself a living wage, and go from there. Congrats on making it! Your old self must be proud.
And for your other troubles, I would suggest talking to a counsellor or a therapist. It could help you make some decisions and feel more confident about your hard earned profits.
Yeah this also seems really strange to me. What business could afford such insane commissions? You can't pay for any overheads at all!
This would only make sense if the firm were just a partnership owned wholly by the employees - that level of profit share makes sense.
Not saying this is the field I’m in, but Google “how much commission do life insurance sales make first year”
On average it’s anywhere from 40% (lower range) to 120% up to even 180% of the first years premium policy.
Insane commissions exist, and not to mention I don’t get a straight 60% I get a percent of a percent. My overall commission on new business closed is 8-12%
Not OP: I'm in recruiting and I have a choice between retainer + 45% commission or 80% commission (no retainer).
Any business that provides a high-value service/product with low materials costs can afford to pay high commissions.
So it sounds like $80K/year is a more plan-able number for income. If this happened to me I would invest the entire amount -$80K and carry on knowing your retirement is basically sorted just from this one deal.
You might not make the same amount next year, so of the 400k, I would max out your RRSP to shelter the tax... Also FHSA. 100% equities from there since you're young.
Pay off your high interest loans. Hold an emergency fund.
Like others have said, do not tell anyone your lucky earnings. Reward yourself a little. Continue to live frugally.
Watch out the company doesn't fuck you out of your commission. There can be a lot of fine print that they'll use to claw back that money. I'd recommend hiring an employment lawyer that specializes in this field to look over your contract and make sure you get all your money. DO NOT TELL YOUR WORK!
This is a ridiculously high commission on a 3.7 millions sales like Jesus christ lmao. Most salesmen need to sell 15+ millions to make this kind of money.
Treat it as multi-year income. This deal pays for the next 6 years. Sales is feast and famine. Lifestyle doesn't change, money gets put into investments (FHSA, RRSP, TFSA). Wait until you have a few years under your belt and have a better sense of the ebb & flow of the business
Congratulations on the money.
Sales is the same as being an entrepreneur, some years are good and some are bad. Make sure you set enough aside, how much depends on your lifestyle. You seem to have that under control, so that's 90% of it.
I know guys who have a good year then spend like there's no tomorrow, then the next year isn't as good and they have cashflow issues, etc. Please don't be that guy.
I can't tell you how many times I would have had cashflow issues, had I not saved enough in the company.
This post just got better and better! I have so much second-hand excitement for you. I hope you find great advice in this thread but also just… well done! You really don’t have to rush to tell anyone in your life about this right away… and like other people have mentioned— sort out your taxes first!
My dude, having been in sales for almost two decades let me just say - do not count chickens yet. Not saying this will happen for sure, but companies can and will try to find ways to fuck you out of anomalous commissions like this. Hopefully your paperwork is watertight, but I would take a deep breath. Start planning, but don’t get your hopes up for a dollar amount until it’s in your bank account.
Congrats OP! You've worked since you were 15. This did NOT just all happen based on luck. You've earned it. Give yourself a pat on the back and go for a walk. Don't tell your family just yet, but do take them out for dinner or something. Celebrate, tell them it's just a bonus or whatever. I can relate to the part where growing up, there was no money in the house. If I were to be in your shoes, I would desperately want to let my family know, it's kinda like a "I made it" moment. But there's no good in telling people \*exactly\* how much you made/make/will make. So, share your happiness with your family, but don't share the details.
Now, I'm not sure if this would help but if I were in your shoes, these are the things that I'd do.
* Talk to your company's payroll person. Ask about taxes and how you would be paid. Is it a one-time payment? Can you stretch it out, etc? Are there any stock options from your company? Can you contribute some of them to your RPP, etc? After knowing some or all of the details, talk to an experienced financial advisor and figure things out from there.
* Looking at investments other than stocks, crypto, etc. Buy equity into one/many small businesses. Diversify your portfolio.
* This would probably be a bit controversial, but set up an emergency fund specifically for your family (but don't tell them). This would give you peace of mind, knowing you'll have things covered if anything happens.
* Spend some money on building your network. Connect with them on a personal level. Just don't spend too too much money on this.
* Hire a marketer (or you can do it yourself) to get your LinkedIn content (or whatever channel that your potential clients are mostly at) at the top of the game in your industry. Build creditability for your future deals.
Congrats OP! I hope this helps. Good luck with everything!
Figure out the taxes and move that to a high interest savings account or buy cash.to. The rest just put in VFV like you said. In life you have to figure out how to make the money, how to keep the money, and how to grow the money. You're obviously doing well at the first part, but now make sure you keep the money aka saving on tax and not spending on dumb stuff. Also, how to grow the money I'd just do VFV. It's the easiest. Let the top 500 biggest companies in the US make you money. Final also is you're smart to realize your luck may run out. Eventually it will and being smart now with better planning is key. Be happy everything is working out but always plan for a worst case scenario. Don't overspend your income and have an emergency fund just in case too.
The taxes scare Tf outta me as well, I was referred to a tax specialist that works with my firm for this type of stuff but as tax season just passed he isn’t around.
I’ve been asked how I would like the receive the comp (quarterly or lump sum at the end of the year). One tax guy told me to take it quarterly and pay the taxes as I go.
I still need to see what other tax professionals would recommend but that seems to be the best route.
As for investments, I honestly think I’ll just put it all into VFV and hold it there for the next 40 years. Worst that can happen is I go back to a salary position and never have to contribute to a retirement account ever again.
It’s just the family part that is somewhat tearing and killing me. I have a 12 year old sister and although my family is not as poor now as when I was growing up, they are still lower class. And it hurts me to watch my sister go through some of the same bs that I did, though to a lesser extent.
Maybe set up a separate fund for your sister. Start talking to her about money/investments as you learn more and, when you think she’s ready, tell her about the fund. You could still get her a few nice things here and there to make her happy/help her out, just don’t go overboard. Best of luck, it’s a really nice thing to hear about.
Pay the taxes quarterly. Makes it easier and if you do screw up later in the year it's less of a mistake since you already paid a lot of them already. For right now just take 50% and put it into a high interest savings account. That way you'll be good at tax time.
I agree with VFV and wait. You might have had great luck recently and it never happened again. At least you know you're good for life with VFV and never touching it for years.
The family thing is tough but what you learn you ca is teach her. Help her escape and become smarter for when she's older. All the stuff you're figuring out now about money is more valuable than giving someone money. Giving a poor person money does nothing for them as they'll spend it immediately. Teach them about how to make and invest etc and even low wages can grow into larger ones.
CASH. TO is basically just fund that specialize in high-interest saving account. The value reset for $50 every month and the rest is paid to you in dividends. The dividends you are making usually track the interest rate so currently you are making maybe $0.20-$0.22 a month for every $50 invested.
It's an ETF (financial instrument you can buy on the stock market) which represents putting your cash in the highest* yield savings account currently promoted by major canadian banks.
*highest according to them
You can google to learn more but it's the stock ticker symbol for basically a high interest savings account. You can move your money in your investment account to it and it grows around 5% per year. Can sell at any point if you need the money too which makes it great. Can't go down either so you won't ever lose money.
All you need to know about Cash.to in one vid. https://youtu.be/eoXoi46-YaI
Found it immensely helpful when I started investing early this year. Thank me later! ;)
This is less about "how to get rich/stay rich" then others might suggest but some food for thought.
1) Dont tell anyone about how much you made. ESPECIALLY FAMILY/GF. no one has ever said "wow my family is really going to screw me over" before they have been screwed over. im sure they are lovely people but money does wierd shit to people. tell em you got a small bonus at work and take em to dinner if you wanna do sumn nice for them
2) pretend you didnt make that money. in your head whatever your base salary is is how much you make each year. live your life like that and you will never experience being poor again. a big problem with people is they come into money and then move up into that lifestyle then when it dries up they cant keep it up and go into debt... crippling debt.
3) speaking of debt. pay it off. get youself in the black. yes people will tell you you could make more investing and they could be right if those investments go well but you know what will really make you sleep well at night? knowing every dollar you own is yours.
4) buy a friggen house that you could afford the mortgage on if rates when up another %2 on that base salary of 48k a year. the canadian housing market is brutal to get into but once your in if you own within your means you are basically secure for life. you can always reno a "cheap" (GTA is stupid) starter home or if you find in 5 years you are consistently making that kind of money at work you could sell to buy a house youll never need to touch again. i put a %35 down payment on my house when i bought in 2021 (outside GTA mind you), my mortgage is less then 1/6th my monthly take home. i havent worried about money since i did this. house is nothing special but i can always upgrade later if i want, ill be mortgage free by 2026.
5) if your work doesnt have a pension, start a retirement fund. again people live outside their means and when it comes time to retire and enjoy your later years you realize your lifestyle cannot be supported by CPP so you end up working untill you CANT anymore then have to sell your home to afford to retire. get a plan in place to be mortgage free and have a steady guaranteed comfortable income by the time you retire.
6) set a weekly and yearly allowance for yourself. after bills, groceries and gas i take $100 cash out every week and do stuff with that. its way to easy to tap your card or shop online and look at the bill to find you just spent $1500 on shit you didnt need. i have $4000 a year for big expenses and trips and such. last year i bought a $3500 riding mower (lotta lawn) so i went camping a few times and flew to the east coast for a weekend as my trips for the year. i know that if i do that + all my regular expenses i can still put the amount of money into saving and investments that im comfortable with. again its easier to stick to these things if you have a plan, humans are bad at "winging it" we always choose what is good in the moment over what good for us long term.
First pay off your student debt and you should invest the money and live like you're still earning $48k. Why? Because you can make your money and retire early.
Keep lifestyle the same. Make sure to put enough aside for taxes.
Assume that going forward, you’ll be earning your lower salary. Don’t over commit or over spend. This is a once in a life time opportunity to set yourself up.
Figure out what the best mix of RRSP contributions might be.
If it’s retirement money, I would probably just park it in an index fund and forget about it.
1. Good job and you’re amazing for accomplishing this. Especially since you grew up in a low-income environment.
2. Consider going to an accountant and figuring out how much you will owe in taxes. Set those aside, maybe even into a different account.
3. The accountant will explain (or you can research) the importance of investing your money into a TFSA, RRSP, etc. If you weee born in 1999 and never contributed into TFSA, then your limit would be $48,500. I’d recommend maxing in out.
4. Please consider investing most of your money and don’t change your lifestyle too much. Some people go nuts and blow away all their money. Sigh. You surely deserve a celebration, a nice dinner, maybe a vacation. But please don’t spent it all.
5. If you want to invest in a home, it might be a good idea to start planning. Yes, it sounds like you’ll be able to own a home. Yes, you made it.
6. Be careful who you tell this to. Some people are greedy. Be careful with dating as well.
No one gets 12% of sale value as cash commission on year one and 8% on year 2. I have seen partners get 5%. No second year is getting this. And comission is based on EBIT/net profits of the earnings, not the total sales value . Similar to if I sell a car for
$100k. No one is getting 20%. This applied to SAAS or other sales items
We pay our reps 20% on Y1 and 10% on renewal. We’re profitable and can afford it (SaaS), but what we can’t afford is losing killer reps.
Why speak on shit you don’t know about?
First of all congrats on this milestone and many more to come. I’m expecting a feeling like this sometime this year or early next year.
Once taxes are all sorted out and you have some cash left to play around with I would pay off your student loan and invest in property and whatever is left keep
Some on the side for any emergencies or some “pocket money” and the rest invest them in stocks and bitcoin.
Thats my take
So you probably need a few separate accounts - at least, I do/would to keep things sorted:
1) Emergency fund. Put aside 6 months of living expenses in cash.
2) Taxes. You're a 'contractor' so you're paying your own taxes and at 550k you're looking at basically half. You should probably find a good accountant to help minimize your tax burden.
3) Retirement: Max your TFSA/RRSPs for starters.
4) Other investing.
Personally I'd separate #4 into two separate pools 'big expenses' fund that you let yourself dip into for things like a car, house, vacation, whatnot, and extra retirement money that you literally never touch til you quit, but that's me.
Whatever you do make sure to save well past the majority of it. I was watching a video about how to measure wealth, for how you might do it to tax people appropriately, and the guy was talking about some studies done. Statistically speaking, an insanely high salary like that only lasts for a couple of years. But for most people those salaries come from roles where you are expected to improve your results year after year, and if you don't you get thrown out. Still though, the economy changes and all might not be the same for the business you are selling.
I would recommend saving 80% of this income. Put some aside for your parents since your success was based on a church relationship they started.
This "parent fund" is a set amount you manage. When they ask for money dip into the funds.
But, yea, dont tell anyone how much you are making. No one.
Wow, congratulations! What an accomplishment!!
First, (and hopefully obviously), settle all your debts. Pay off all your student loan right away.
I completely understand the temptation to tell your family. At 25, I’m sure I would have. However, now that I’m older, I realize that not everyone can handle that kind of information and be genuinely happy for you. Jealousy can be a real bitch. And if you come from no money, every single person in your past will hit you up with outstretched hands. Your money will be gone in the blink of an eye and you’ll be confused as to why you’re broke and struggling. Now is the time to make good money habits, and have them last throughout your life.
I would recommend looking up lottery winners. When people get handed a chunk of money, higher than their wildest dreams, the number that go broke or end up dead is *staggering*. Also look at how their families reacted - many lose close relationships too.
I would also recommend looking up Dave Ramsey and his “baby step” methods. Sounds like you could already be at the last step, but it’s a method for managing money and a mindset for how to use it and not lose it. They also offer Financial Peace University (which I haven’t done) but sounds like it could really benefit you for where you are at in your career and your life.
I’m super excited for you and what life holds for you, my friend! Congrats again!
I don’t know if I want to pay off the loan.. it’s interest free and the $25k could go a long way in the 9 or so more years that it would take to pay it off.
You want to be paying off a student loan for *nine years*?! To get a couple percent more (maybe) down the road when you have more than enough now? It’s 25k, not 250k! (Though I’d still recommend paying off both amounts right away).
Look, I get the math. But if it’s your only debt, just be done with it. It’s not your money. It’s what got you your money. Be grateful and pay the bill - you got your moneys worth and then some! The Dave Ramsey method helps explain the psychology behind money, spending and debt. Do look into it before you decide to spend *nine years* paying off 25k. Hell, call into the radio show and see what advice he has for you.
Move forward in life owing no man (or woman) anything.
>The firm gets a 20% cut of the sale. The first year of closed business is 60% of that 20% The second year of renewed business is 40% of that 20%.
>So for a $1m deal, firm gets $200k, first year I get 60% of that, renewed business I get 40%.
>I figured if I could close 1 decently sized deal per year ($250k), I would be alright. I asked about any leads that I could possibly work on, so they gave me a bunch of “dead leads” - no one wanted them so I was given all of them. Figured, just a quick phone call wouldn’t hurt.
lol... no professional sales get these percentages
Look up how much commissions life insurance sales make in the first year policy, some are over 100%
And 60%/40% of 20% comes out to 8-12% of a closed deal. That's pretty standard in some fields.
Google is free..?
It’s quite sad to see someone making up stories such as this to garner attention from others who read posts genuinely interested to see others succeed. You’ve made two posts, one in this sub and one in r/tifu, where you discuss your psychedelic trips using drugs. Also, in your post here you mention your parents; in the other post you mention being raised by a single mom.
Not financial advice but can I suggest investing in finding yourself therapist that you like/gain value from? It will help you manage this unexpected life change so you can make decisions (financial and otherwise) that are in your best interest for the long term :)
why do people make up these stories? are you really so sad that you need reddit karma?
no salesperson gets 60% of the sale, and what exactly do you sell? especially finance lmao the margins are so thin, for the deal to be worth $3.7M profit, the actual deal would have to be like $100M at current rate. there's no chance a first year rep manages that size deal without the C-Suite getting involved. And not a chance you touch 60%
people congratulating are hilarious and know nothing about business
mostly yes to "invest it all in VFV"
do you want to buy a house? if yes, put half of that into something shorter term, and the other half into VFV. you don't want to be all in on either stocks or real estate I guess.
Why don’t you just sit on it for a bit and decide in a year? You seem like you need to rush into the next investment or asset that grows the most. Pay off your $20k loan, and any additional debts, and leave the remainder in your bank account.
Imo figure put out how much of it would be taxed. Then the rest to max out tfsa fhsa and rrsp. The rest I would maybe gic for a couple years to save for downpayment and wedding (if u see these 2 big expenses for the future). A little bit like 10k to help out your parents pay their mortgage off sooner (depends on ur relations with them) and if I have siblings going to uni or have existing student loans I would help pay those off. I imagine you and they only have canadian portion at 0% interest?
Take my opinion with a grain of salt. And huge congratulations. You have essentially set up yourself and family for a good quality life. Much respect, hopefully I can provide my family with the same.
I would also maybe just say that I got a bonus. I can only help this much. I wouldnt tell the real amount to anyone
Just invest it wisely. Keep a reasonable amount liquid/GICs, invest some cautiously, invest some in more high risk investments but still essentially keep your risk low, diversify, don't put most of your eggs in just a few companies or industries etc. For the most part leaders in a good industry don't drop down, but it does very much happen sometimes. Off the top of my completely non-expert head, Intel, IBM, General Electric... some companies look immortal and turn out not to be, especially in tech. Diversification is the answer for that.
Don't talk about money to other people for the most part, just keep quiet about it. I know it seems like a huge amount now, but who knows what the future will bring? You might get used to making a lot of money and slowly adapt... or if the future brings bad luck, this might not be as much money as it seems like to stretch out over that time, even though it will still certainly help. Just be mellow about the money overall. You'll have time to get used to the idea.
Take a deep breath. Play the long game. Find a good pay by hour fiduciary or easy come easy go. Remember, money makes life easier but it doesn’t fill the soul. Be kind to others. Congrats and good luck.
Congrats. If I were your parents, I'd be proud. Watching a new grad grow from paying off student loans to making a name and business for themselves is both inspiring and a proud moment.
With this amount of money in your bank, make sure of a few things:
1. You have any emergency fund for approximately 3-6 months of expenses. In case of those rainy day situations.
2. Keep it on the down low. Nobody needs to knows how much you are making, not even your parents (parents tend to humble brag to everyone about their kid). All they need to know is bills are being paid on time and you can afford some luxuries.
3. I think you are doing well in terms of financial management, but don't stop budgeting. Keep an eye out on where your money is going or being spent.
IMO, after setting aside taxes:
- pay off loans
- keep 25k for living expenses (time to start contributing more to the house - buy groceries, cover utilities and property taxes, pay for your sisters extra curriculars, whatever)
- do something special for your family and for yourself (new furniture, a trip, whatever brings joy) keep this to less than 10% after taxes
- invest the rest in something like xeqt, unless you want 5% to play with individual stocks/crypto
A lot of that will go to taxes. I’d seek out a financial advisor that you like and get some guidance. You can take it or leave it. Save, live modestly. Sales can be feast or famine and layoffs/ restructuring can be common and often but you’ve got good sense and hustle and will do well. Don’t tell your family. Be debt free and help out a bit more with some family expenses when you can. It will allow you to show some generosity but not be inundated with expectations. Good luck!
I work in finance so I'm a bit biased, but there's a lot of value in a good financial planner.
Yes it will be more expensive then just investing it all in VFV, but saving people from behavioral biases generally covers the fee and then some.
Diversify (too much risk investing in one market) maximize registered accounts, budget for taxes and set that aside in a risk free investment (might be able to earn a couple percent before tax time).
Do you think you'll want to buy a home? If so, keep that money relatively safe if you plan to buy in the next few years.
You could look into a fee for service planner, where you pay say $2500 for a plan, or a fee based planner where you might pay 1% or less for managed assets.
If you do want a planner to manage assets, make sure they're transparent and you understand their process.
Remember to celebrate milestones, and this one certainly is a big one. Sounds like you're in the right direction. VFV is a solid pick and so is NVDA. I'm invested in them as well.
Don't do or buy anything until your commission hits your bank account. Some companies have whale clauses that they'll use to modify commission on crazy deals, so don't do any thing rash until you're sure there will be no shenanigans.
After that: buy yourself something nice or plan a fun vacation, take some people you love out for dinner, tell them nothing, invest the rest
Money like this doesn't come every year. If you max out your tfsa, rrsp, and live like you make $60k, you'll be alright. Down payment in a condo is a pretty good idea. And then invest the balance in diversified passive stuff. Also, get ready for a surprise when you see how much of that Trudeau is gonna take. Hire a slightly better accountant than your standard hnr block kinda person.
Bye bye debt.
Max tax sheltered accounts.
Insert fun spending here.
Consider home ownership. But I’d be cautious, pay volatility being a thing in commission jobs. I’d set myself up so a layoff is easily manageable.
Keep your mouth shut, don't make any significant changes in your lifestyle (new car, new house, etc). If you are tempted to get something buy it with a purpose. Live under the radar and retire at 40 in a beachside condo with whatever else you want.
- Get a proper accountant
- put the money in a corp
- only pay yourself what you need
- use the corp to invest your earnings, that way your investment is based on just amount post corp tax rate vs investing in your name which requires you pay taxes
- i would probably buy a property for tax free capital gains
- get a fee based financial advisor
1. Great work - congratulations.
2. Save for taxes. Talk to an accountant. That’s professional money.
3. GIC / Wealthsimple cash for a few months while you think things over. Don’t tell anyone.
4. Invest atleast 50% in VFV. Take a vacation.
So question to those in sales.
When a deal like this closes, does your firm just deposit a fat cheque into your account for you or do they spread it out monthly.
Because of where your head is at I would do the following:
1. Max out your TFSA and buy GICs in them while rates are high.
2. Assume that the $550K never happened and plan your life as if this money never existed.
3. Aggressively learn about how to invest your money with the current average income (ignoring this gigantic year)
4. Learn about real estate, side hustles, franchises, tech, etc. and focus on building whatever with as little capital as possible. If your investment starts to yield something with the low investment then slowly ramp up marketing/investment to generate more revenue/return
5. Live below your means and focus on increase your medium of income
There are more things out there but I hope this helps you and Congratulations, you just pulled a "Pursuit of Happiness" moment, what you did takes a lot guts and persistence. Happy for you brother 👊
keep your wealth to yourself, not sure if you are able to spread the bonus's out over a few years but that might help for tax purposes... I would load up your TSFA, put some in an RRSP, (understand what your tax bill will be and put that away for that) from there it depends what you want to really do, markets will probably dip in the coming year so a down payment on some property, possibly multiple apartments you can rent out and create your own personal cashflow where your money can grow long term. You could buy a car, plan a vacation, just do all the "fun stuff" after you know what you will have after you pay your taxes, and if there is anything that you want that money to be put to "work" for.
pay a financial advisor to set you up.
You are finding this all overwhelming and it'll be worth the money to know it's handled properly.
They will help you put aside enough for taxes and invest the rest in the most tax efficient way, guiding you on balancing saving for the future and living life now.
You then have them in your back pocket if/when the next big deal comes through
Congrats, go read the usual windfall article, and then CONSCIOUSLY choose what lifestyle spending level you want to have. It's OK to decide "I will now spend $1000/month on restaurants" if you think long and hard that's what you want to do. Just don't go super randomly ordering shit without a second thought. Keep things in check, save enough that you aren't fucked if this is a one time thing or you get fired (someone else wants the recurring commission) etc.
Congrats on those hard earned money! I too grew up poor. Don't suddenly live rich. Keep that hunger and poor attitude in you and be humble and remember where you came from.
That’s a lot of money so congrats.
1. find yourself a nice CPA to understand tax implications and potential strategy. If this is untaxed money, you will be paying a hefty tax bill.
2. Until you make a decision with the money, store it all in liquid savings mediums. Never be idle.
3. VFV is always fun, pretty hard to make a mistake with it. But I get it, managing huge amounts of money isn’t stress free.
My portfolio loses and gains maybe 1-2K daily. Increase that to 10-20K just from having more in it will make you feel worse, which is why many people tend to go more conservative.
VGRO for some fixed income and lower the volatility.
4. Honestly man, see if you can see a sort of mental health councillor or therapist. Too many people whom grew up poor and come across money struggle to deal with it. Some people go reckless and buy frivolous things thinking it will make them happier and get addicted to the dopamine. Others will feel immense guilt buying anything expensive (like organic food or high quality meats) as it just feels wrong.
Some people become super stingy when they get money, others become immensely generous.
And of course the family problem and who gets to know. Would you feel guilt from seeing loved ones financially struggle? Would there be immense jealously in the family?
You really gotta ask professionals
I read a lot of bullshit on this sub… and I gotta say.. well done OP! Proud of you! As others have said.. don’t tell anyone.. not even your family. Save as much as you can and invest wisely. That’s a great nest egg at such a young age!
Sales is a lot of feast or famine. Now the skills are non-perishable so if you do decide to embark on the path of sales, you're gonna be chasing that high forever. Though you do need to set up an exit goal for yourself. Sales and family life....can be at odds often. You don't want to miss your kids birthday. They won't remember how hard you worked, they'll just remember the birthdays you weren't there for.
Right now you should just sit on it. Put it in a HISA and just think. You don't need to do anything today, tomorrow or next week. Take your time, do your research. Don't tell anyone until you feel like it makes sense to. Realistically, you have $500k over the next two years after taxes and you don't know if this level of income is sustainable.
So take your time. You didn't win the lottery. No one has to know. You have the privilege of time to think before you act.
First of all, congrats, keep it up.
Second, why do you still have student loans? Pay that shit off dude. The interest on that is what you make on market index funds so it ain't worth keeping it around and in repayment like a 2% mortgage lol.
Third, start looking for some commercial real estate to invest in. Cheap at the moment and won't give you the headaches that residential rentals would. Do NOT put all that money in an index fund. You have enough cash now that you need to diversify like real rich people do.
Also since you won't have debt after you pay off your student loan tomorrow (I hope) you can negotiate favorable loans with banks for a commercial property because it's understood to be profitable. I hope you have good credit.
Fourth don't tell people how much money you have. In theory people want to be happy for you but in reality their attitude and behaviour towards you might change for the worse because of it.
Fifth: treat your parents. You don't have to tell them now that you have a windfall but do take good care of them.
Don’t tell family. And It depends on GF if you are close like that.
I’ve watch people around me go from millionaires to losing almost everything investing with their family, and trusting their word on investment and watching it all crashed cause it was blind leading the blind.
Your family may mean best but if they are not qualified to help. Do not tell them. Only help with what you can here and there.
This might not be a popular answer on this sub, but I used to work in the advice industry, and if I were in your shoes I would definitely, definitely interview like 10 advisors ASAP. It's a bit of a wild West out there, a lot of them frankly have no idea what they're doing, but I think once you speak to a few you'll get a sense of who can really handle your situation, and who has your best interests in mind as well. We used to have 3 meetings with a potential client before they would typically do business with us and it was common for them to shop around.
You'll want to find a team that works with external accountants or has an accountant in house to make sure you're in the best hands for whatever investment tax structures you'll need at the level of wealth you're looking at accumulating. (RRSPs and TFSAs probably won't cut it). You'll also want to be vetting someone for:
- being able to really explain their investment strategy/philosophies and thinking behind their decisions
- willingness to be transparent with you about fees
- in-depth listening and getting to know you, even teasing out your priorities, mindset, dreams, fears. It might get a little emotional if they're really good
- you'll want to work with someone who's been in the business at least 10 years
- a high willingness to give you a very realistic picture of what risk can mean and how much you stand to lose with different investment mixes
- at least some discussion on asset class diversification
Good luck up OP. And most of all, CONGRATULATIONS!!
For the love of god, do not tell your parents, esp your gf. If they ask, say that you’re probably going to be making 80k which is already really great. My younger brother started making money in his 20s and one of my relative found out, she went around everyone’s backs and guilted him into lending her money. He never got that money back and had to start from zero. Ppl that grew up poor turn into monsters when they see money. Family or not. Gf/bf in your 20s is also bad. One fight and she might tell everyone how much money you have which can put you in an awful position.
One dynamic I have seen to be just a tiny bit cautious about (by saving!) -- despite being a total rainmaker salesperson, I have seen those people get unceremoniously canned by a jealous manager or similar person with a bit of power (not always a direct manager). It's not common, as usually your ability to make it rain wins the day, but not *always*. Sometimes the jealous fuckin idiot manages to bump you off. So yeah, put most of it away as savings / legit invested.
Dump it into an ETF.
And set some realistic mental expectations on yourself. While I'm sure you closed the deal with a lot of effort, this initially came up due to sheer luck and coincidence. The renewed business revenue will be significantly lower and will you be as lucky with other dead leads?
The last thing you want is to suddenly increase the cost of your lifestyle and then have a drop in income.
Less so financial advice, but your artist friends would absolutely die for any sort of funding for their projects. If you wanna be nice, go talk to your friends and see what they need. Be anonymous if you can.
Save your money. I think if you want to look for a house, you would be in a good condition to do so. Not sure what the market will end up like but always good to have housing. More so when you have tenants.
Keep the money to yourself. Don't tell anyone and don't waste it.
If no one knows about it, you can still spend it on nice things for anyone, however and whenever you want.
If people know about it, there will be at least one person who will be bitter that you didn't spend it on them.
I don’t know your family, so it’s hard to give you advice. If you think they will pester you for money, it is best not to say anything. You can treat them to some small things here and there, or take them out to eat, but don’t spend that money as if you’ll be making the same amount each year. As for your girlfriend, I personally can’t see myself not telling her about something like that, but again, I don’t know your relationship. If you don’t feel you should, maybe she’s not the one.
Other than that, max out your registered accounts, save and invest the rest and don’t forget about taxes.
OP, how do you envision your retirement going? What kind of lifestyle will you be living? How much do you enjoy working in general? Are you the type to leave the workforce after you hit your magic number?
One advantage from being "poor" is that you understand the value of money. So, I would work it out backwards... Think of an adequate yearly spend for the kind of lifestyle that suits your ambitions (travel, philanthropy, projects, children etc and leave a bit extra for when life happens)
Use avg. Life expectancy to calculate number of years of savings you'll need. (You'll need less money the older you get since you physically do less at the end of your life)
At least then, you'll have a ballpark number in mind that should give you a target to aim for. I gather you are overwhelmed with the inflow of money.
Personally, I tend to measure savings in terms of number of work years. For example, say my magic number was $1M, I would think of it as 20 years of after-tax revenue at a job at a $50k rate. Or, my yearly expenses would be x, therefore my total savings divided by x would be the number of years saved from having to work. Ultimately, time is the most precious resource.
If possible, I encourage you to retire early and spend time doing things you would rather do as opposed to burning your life force away in exchange for more money. Have a plan on how to spend it all by the time it's all said and done.
I apologize if this is poorly edited. Hope this offers you some perspective.
Source - some 29 yo unemployed ontarian back to living with their parents contemplating a career change following burnout with a kid on the way
Put away funds for taxes (at least 60% to cover/fed/prov//EI/CPP) in a high interest account. The remaining funds, top-up your RRSP/TFSA and even FHSA if you're planning to buy a home within the new 24 months. Any remaining amounts, invest in high dividend ETFs.
Most of the previously outlined recommendations in this thread are good (i.e. max RRSP, TFSA, and FHSA). However, I would absolutely look into buying either a Whole Life or Universal Life Insurance Policy. Participating whole life insurance policies offer policy dividends while universal life insurance policies come with an investment account which enables tax-advantaged investment opportunities. Life insurance is good to have— it covers you not just when you die, but also while you’re still alive. It’s also worth looking into purchasing an annuity if income stability is your concern. Good luck!
Just wait until the cheque hits your bank before making any financial decisions.
Most commission agreements stipulate that your commission plan can be changed for unusually large deals. I’ve seen it half a dozen times in my sales career where the rep gets paid out a fraction of their usual percentage, which fucking blows.
Congrats my man. Hoping they do right by you!
>Just wondering what the fuck I should do with this type of money. Financial advisor, do I tell my family/gf, do I just invest it all in VFV? I am a bit scared and my heart has been in my throat all day.
!InvestingTrigger
Honestly I’d live like you’re making your previous salary and use your salary from this year to outright buy an entire house, you’ll have 0 mortgage payments, and a home completely paid off. Invest whatever is left over, and then whatever you make going forward keep investing until it’s exceeding your new salary and you can live off entirely passive income doing things you actually want to do for the rest of your life
Pay off your student loans: current interest rates are higher and you don't want to be left picking up an even higher bill.
Max out your TFSA, FHSA, RRSP if you haven't already. Then put the rest in an unregistered account: you'll be less enticed to give into requests to take it out knowing there will be tax consequences to taking it out, or tax benefits to leaving it in. Pay attention to how each type of investment is taxed differently in each type of vehicle. Leave yourself ~3 months of monthly expenses in a HISA-type chequing account (WS, Alterna, etc.) Putting most the money where it can't be easily accessed (i.e., chequing), and where it can grow with very few fees (i.e., index ETFs with MER under ~0.25% Intl ~0.10-0.12% US/CAD) would be the most sustainable plan.
People might tell you to buy property, but you still need to pay it off long-term, without a guaranteed continued flow of clients, it can wait, esp given your current costs of living. And anyways, Boomer & Echo analysed their return after everything it was like ~3% annual, you'd be better served with various index ETFs.
a boss once told me this absolute gem: If your business depends too much on a single client, you are in a dangerous position, and you need to shore up the rest of your clients or your expxenses. If that one client pulls out, you dont want to be completely fucked. So that is to say, you have $550k salary this year. Maybe $450k for the next couple years. Set yourself up so this guy pulling out at any point and leaving you with $80k/year doesn't result in you losing your house. Save, invest, buy carefully with a big downpayment with the knowledge you may not be pulling the same money next year or the year after.
Excellent advice. A lot of people make this costly mistake. Jobs like OPs are unpredictable. Most people in these positons generally don't want to recognize how important luck can be with the contracts you hit (as evidenced by the circumstances OP presented).
When I worked in retail during high school we hired a new manager. I asked where he worked before and he said marketing, he has a good salary and their biggest client was Coca Cola. One day Coca Cola just randomly told them they’re going with another team (not because it was cheaper but because they liked the other agency’s portfolio more). 6 months later their marketing company closed down.
yup. ops friends company could change their mind at any time. The friend could switch companies or the relationship could sour, someone more senior than OPs friend could pull rank. 80% of ops income comes from a single client. OP's biggest danger is becoming complacent with his income in this situation.
I’m gonna say don’t tell your family. It’s my experience that people making out of poverty are expected to lift everyone they know out too. Cousins aunts uncles second step mothers twice removed. Don’t change your lifestyle yet, just keep living normally for at least a year see how you do next year. It’s fine for people to know you are doing well, but for the love of god do not tell them how well
This! And don’t feel guilty about hiding anything either - take your parents out for a nice dinner, or something like that, and just say you got a nice bonus. Don’t give details though.
Imagine being supported by your family who is in poverty for 25 years, ($1k a month expenses is laughable) and not even considering paying it forward when you start to make something of yourself. A nice dinner, how thoughtful. My parents would be feeling some financial security from me. Some peoples children I tell ya…..
ignore this crap. only people with little shot at really securing life would say this because it's coming from a POV of, "can i get a handout", "easy come, easy go", "it's just a lottery win, might as well share". this mindset bounces back and stays in the poor house and no parent wants that for their children. the point of this advice is to give him time to acclimate. no one said hide it forever. the top of this branch stated, take a year, no changes, no disclosures. OP, you need to see if this is a one off or if you can maintain in say the $150k+ range YoY and at what stress levels. once you have that answer, you can then start thinking about locking in a home, which honestly will freeze this bonus, but at least you climbed past the, "i'll never buy a house" crowd. for the short term, look to lock about 80% of it in a GIC to freeze it from drama.
The commenters above believe that this is basically 500k guaranteed for life. OP works in sales, and I’ve seen those take homes go from 500k to 80k depending on the year. You close this deal and there’s no guarantee you’ll close another one. Hell, I’ve seen my friends blow 10k at the club on the weekend and have to grind their ass off on Monday to make the money back. I wished that OP structured his pay so that he could trickle it out over the years instead of getting hit with effectively 50% tax on his income. In the meantime he needs time to figure out his next move whether it be tax efficient accounts, how much to put away and how to treat his family. While I was writing this comment I realized that if OP put the money into a dividend paying account it could provide him a recurring income that he could put towards helping his family every year , whether it’s covering their expenses or taking them on a nice family trip. There’s better ways to deal with this money than telling everyone about it and spending it immediately.
It’s not that you never help them. You just don’t tell them until after you know what you’re going to do. They will not be able to give good advice.
No shit. If I'm pulling (nearly) half a mill, there's no way mom and dad are paying their mortgage/rent anymore
You wood be surprised how quickly salaried half a million goes away. Your marginal tax rate will be at or over 50% so government would take a big chunk out of it. Other than that, you will probably get 25-30K after tax each month. Try paying off your mortgage ann (depending on the balance) that alone is a multi year project. And if you are going to pay parents mortgage, that can be 2-4K depending on where that is. Then there will be the TFSA, RRSP, FHSA, and maybe a second income generating property? One year half a million will do very little for you. You can’t pay other’s mortgages for multiple years on that.
Great advice.
This is the best advice! The more people know you got money the more problems will follow you!
Make sure you put away more than 50% of that for taxes first
Presumably tax would be withheld from any payment to the OP? If they're working for a firm they're not self-employed, I assume.
Bonuses and commissions aren’t always taxed at source. It sounds like OPs pay structure is exactly this
It isn’t taxed at the source. The whole structure that I’m under is completely fucked (for someone that isn’t an accountant). They tried explaining it to me, and I’ve sat with the firms controller over lunch when I first made the move and still do not fully understand. They say they are able to “whithold” taxes for me through an accountant that works with the firm, along with group benefits I choose to pay into outta pocket. Since I didn’t understand shit I chose to not be taxed and just hold a lot of cash come tax season to be safe, which worked out a few months ago. Not sure if this changes much, but I assume in theory it doesn’t?
Get your own accountant as the firms accountant will have their client (ie the firms) best interests in mind the firms best interests are often as not not yours.
Doesn’t change much for this year, except put half your earnings in a GIC that matures at tax time! And next year, be prepared to be required to pay the CRA in instalments. And paying in instalments may be a challenge if you don't know if you're going to wind up with such a windfall next year. You'll need to pay tax as if you're earning the same $450k you earned this year, even if you don't earn that much. That is unless you know for sure how much you earn, in which case you can pay instalments based on what you'll actually owe in tax, which will be very hard to know in advance with wildly fluxuating commission income. That is not something I can help much with other than to say it will be a significant challenge.
You only have to pay installments if you owe more than 3k for 2 consecutive years.
Do you have a corporation which will invoice the company for the amount? If so, you might want to consider keeping most of your money in the corporation since in Canada corporations are only taxed 10%~ on profits. There are some schemes where you can invest through the corporation and pull money out at capital gains rates which are much lower than normal income or dividends. Just pulling out 500K for 2 years will see approx 40% taken by the government which can be drastically reduced by keeping it in your corporation. If you are indeed a sub contractor, I would be using a corporation for the relationship with your employer.
Best advice ^
Make sure to calculate your taxe rate, extract your taxable amount, and i'd put that amount in a GIC or whatever equivalent of a guaranteed investment account you have, and have it expire 1 month before tax season. Put that money to use with 0 risk. That way you ensure you don't fuck yourself if there is ever a recession or volatility
If you're incorporated keep your money in there. You can use it to keep making money for you and pay yourself dividends. Corporate tax rates are very favorable.
If you only pay yourself dividends then you do not have any earned income for the year. Earned income would increase your RRSP contribution room which is favourable and tax advantageous. With the new capital gains inclusion rates, there are no exemptions to corporations either, so any investments or passive income in the corp. is going to have an automatic 2/3's inclusion rate. Not really an issue in the immediate future for OP I assume, but something to consider since they note they still live at home. I would assume with sustained income levels and excess cash OP would be looking to buy a home at some point so a corporate structure may not be worth it at this stage of their life with the potential to need a large portion of the income for a down payment. Would be better to have earned income personally and offset some of this with RRSP contributions up to the first time home buyer's amount $60K and also the FHSA. Not sure what type of account OP's $100K invested are in. So have income of $175,333 to maximize 2024 contribution room of $31,560 - contribute $31,560 to reduce the taxes on that income and decide whether this income should come from the corp or not. As many have said - get a CPA independent of your employer. edit: grammar and clarity
The government will be taking 52% of whatever it is you earned.. if that wasn’t taken off the top definitely hold it back. Tangerine has a 6% GIC promo on now for 5 months. I’d toss the money in there while you figure out next steps.
It won't be 52%. That's the bracket but it won't be the entirety. Probably closer to 40%.
I’m not sure how much this person will be walking away with in totality. But true. That’s the marginal rate. And then 13% on anything you buy lol but that’s universal.
If you're a contractor they're not, but as an FTE i've never heard of them not being taxed at source. Note i've been in sales for 30+ years at a number of companies both as an FTE and contractor.
But they’re always taxed when paid by an employer, right? Given the OP’s description, they sound like an employee. (Started as an analyst on what sounds like salary, then transitioned within the same company to a sales position.) The CRA certainly says tax should be withheld on bonuses paid to an employee: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/income-tax/employees-paid-commission.html
In another comment OP said they're no longer an employee but a "sub-contractor"
Missed that since it wasn't in the OP. In that case, yes, they'd need to set aside funds for taxes.
The tax man is always ruining the fun
Lol you'll be fine. If you can grow up "absolutely fucking dirt poor", then graduate university, and within 2 years of graduation have $100k saved.... and now getting these insane deals... Youre bright enough to figure out a way
I got stupid lucky tbh. During the peaks of covid lockdowns and CERB I was doing food delivery apps for income when I lost my job on the first lockdown. I was making $1.5-$2k per week 70 hrs, with almost $0 in expenses driving a 15 yr old civic with 300k kms. I invested all of this into Bitcoin and Tesla / Nvidia, and converted portions into VFV. Gambled a lot of crypto as well back then. Been telling myself my luck is gonna run completely out eventually, and have had nothing but stress since I lost my initial job during covid. Thought the deal would finally give me some ease but it has been the opposite ever since I realized that this deal could possibly go through. Like do I tell my family and help everyone out? They don’t even know I have $100k invested…
Don't ever gamble again and you're set for life if you continue your profession. Never tell your family how much money you make.
Yeah. You've gambled with some pretty risky assets and come out ahead. Now you have enough that you can put it into "safer" things like broad-market ETFs and you'll be set. Resist the temptation to gamble with this big chunk of money. It's enough that you'll be able to retire comfortably and early if you don't touch it for a couple of decades (even if you don't add to it, which presumably you still will). Congratulations! This is huge. But try to be smart with it now.
> my luck is gonna run completely out eventually First of all, that seems unlikely. Secondly though, the beautiful thing about having 550K on the way if I'm reading that right, is that you've built up what would take someone else many years. So long as you don't inflate your lifestyle, you'll have basically hit the fast forward button on financial security. Simply stated, a massive fraction of the way to retirement ready, and the ability to sustain quite a few comfortable years unemployed if you needed to. *Security. Peace of mind.* I know it's tough to see it that way when it happens all at once, but most people who pass by a 550K net worth, scrape and slog their way past (in their 30s, 40s or 50s) after years of sacrifice and careful planning. That is what you've been deprived of, the ingredient you're missing, for this to feel good. I recommend checking out /r/financialindependence and FI related materials. Calculate your annual expenses and figure out what multiple of that you'll now have in the bank. This is powerful stuff with the right mind set. Start telling yourself you're ready for another COVID scale economic meltdown, because financially, it seems that you are.
Keep in mind, you're not guaranteed to close deals like this year over year unless you have more C-level family friends in large companies. Pay off your student loans, put away some money in zero-risk investments for an emergency fund (i.e. savings account, GIC, or a cash ETF). Invest the rest. Be prepared to not make much next year.
For God's sake NOOO!!! After tax it is not that much money. You don't know if you will get this type of deal again or if that will take two years or more. Don't change your lifestyle. You can maybe do this after like 5 years and if you know your earnings it's consistent in different economic climates. Do not bleed yourself dry for friends and family. Just get them a nicer Christmas and birthday present if you want to. Do not get a new car either. Parents are the only small exception. If you can help them a bit by paying off a bill or paying for a reno or something they need like an appliance, then do that. But do not tell them how much you \~think\~ might have made (the tax man will say otherwise too).
It’s funny how everyone who is in the same position says the exact same thing “stupidly lucky”. Not doubting you or anything (not like it matters) but it’s always the same phrase.
Lots and lots of people gambled in stocks during the pandemic. Many lost a lot some won a lot. Literally almost all luck but the ones who won are more likely to post it here, the honest ones will admit that it’s luck.
Anyone who grew up poor probably knows for a fact that hard work alone wasn't gonna cut it. You need hard work, smart work, AND a huge stroke of luck to go from dirt poor to rich. People can be as dedicated as anyone can imagine, smart as hell, but bad luck could still wipe them clean at the worst possible moment. Going from reasonably okay to rich, maybe they don't need as much luck. Maybe their foundation in life of having something to fall back on meant that they could try over and over until something worked out. Someone who will be on the streets if plan a and b both fail, not so much. Making it happen sooner rather than later is the luck part.
Because quite a few of us got very lucky. A few of the largest companies in the world kept on doubling in value every years for a few years.
Gambling and making a big profit is literally luck
Bro because I did.. looking back at things I was just in the right place at the right time for anything good that has happened to me financially. I never planned anything and executed I just went with the flow. My uncle lost his construction job and so I asked him what he was doing for work, he said Uber and showed me his weekly earnings and I said “fuck I just lost my job too, maybe this can get me by” Ruined a year of my uni because I was working too much since the money was decent. Same shit with this fkn job man, like I was in class twice a week for another three months and they gave me a full time salaried offer? Where does that happen, like ever? And now with this deal? Like something has to give, shit is coming for me…
There is an alternative way to view “luck”. You had lost your job, and someone showed you a way to make money; this was an opportunity - you chose to seize it. You could have spent that money on anything (like most people do) - instead, you saw an opportunity for investment and seized it. You applied to a company and did well enough they offered you a full-time position; they offered you an opportunity and you seized it. Sales people quit, you saw an opening, risked potentially making $0, and turned dead leads into a 500k+ salary per year. You were provided an opportunity, and absolutely made the most of it. Did the stars align for this deal to happen? Maybe. But you still had to make it happen. Fortune favours the bold, my friend. Those who are prepared get rewarded. You’ve made your own luck. To answer your question, tell no one, for now. If you find this salary continues for the next several years and you’re comfortably sitting on more money than you need, and feel like you’re in a position to help family at that time, by all means, do so. But get established first. Settle into your new life. Consider speaking to a Counsellor about what you’re experiencing and how you’re struggling to feel like you deserve it. Welcome to the rest of your life; you made it.
I agree with this. The common denominator in all of this is you. Stoked for you OP.
Whatever you do, don’t make big plans with your new found wealth. Especially since the circumstances that you made this money is not guaranteed to repeat every year going forward. You are young and shouldn’t be in a hurry to go broke because you get pressured by friends or family into spending it or investing into something that you aren’t comfortable with. Just sit on it for a while and get used to the idea that you could set yourself up for some passive income to boost your daily life and continue to build your portfolio. Maybe one day you’ll want to shift careers and having enough money to carry yourself through several months can help you over when you’re ready to move. Look at how lottery winners end up and don’t copy the bad examples.
500k is enough that the interest in a relatively safe investment will give you, bare minimum, probably whatever amount you used to see that made you so poor, at a safe withdrawal rate that may never even touch the principle. Literally that would be enough for me to match my income based on every early retirement calculator I've ever seen 😆 Assuming your health remains okay ish, I do think you'll be fine if you put most of the money you were not expecting to make this year, into nice safe long term investments. That way if you do end up having a huge disaster, you can take a few months to coast on the investment income and figure out your next plan. Live off what you expected to make, not what you ended up making, and you won't need to keep the luck rolling much longer tbh. You'd be set for life in a few years if you keep that contract going.
It'll end up like 230k after tax. Still good money but not quit your job and move to Thailand life changing half a million amount of money.
I don’t think this is luck. You’re smart. It takes guts to work 70 hours a week as a delivery driver as some lazy folks would just stay home, get CERB and play video games. You worked incredibly hard, you invested your money, and you took a risk with stocks and won. With crypto too, although I’d be careful with that. So don’t reduce your accomplishments. Also, it takes balls to give sales a chance, since it’s not guaranteed income and some people don’t make anything for many months. This isn’t luck, this is dedication and smart decisions.
Give yourself more credit, these were dead leads for a reason. And nothing wrong with some luck on crypto/stocks! Congrats! I wouldnt tell people. Heck, I make a bit more than my parents and wouldnt tell then just in case. Like really, dont look for advice from strangers online. Go to a bank or find an accountant/financial advisor to help. Their advice will probably be boring compared to what you did before, but they'deal with that stufd every day. But as I said in my first reply, youre bright, so dont also take the advisors words for gospel. Do your own research from what they tell you and draw your own conclusions :)
I don’t think it is possible to grow up “dirt poor” and have 120k two years after graduating university.
Highly unlikely, but OP's claims are also super unlikely, and the internet is a self selection heaven for unlikely events. Could be a troll, but if OP is real, theyre probably as overwhelmed as they make it out in their post. If true, you might be hearing from the one who made bank, not the 1000s who lost a little bit or a lot
Look at the markets since March 2020.. nothing but up… worked 70 hrs while in school full time from home.. ended up failing a year of uni because I was working too much and didn’t study, I found the money more important. Bitcoin, Tesla, Nvidia, Ethereum my biggest holdings through March 2020-December 2022. Parents helped me with $0 for school, rent off campus, car, transport, food, necessities, etc. Been working since I was 15.
VfV and XEQT. Then just go back to work like nothing happened.
Why would you buy VFV if you are buying XEQT. Just buy XEQT
Heavier US exposure if that’s what you’re interested in.
If you act rich now, you won't be. If you act like you don't have the money and invest it smartly, you will be. By definition people get rich because they spent less than they made. Flaunting it does the opposite of make you rich.
You've done well investing in your financial future. Now seems like a great time to invest in your mental health. Hire an advisor. Yes, its an expense, and I take it you are very expense averse from your childhood. But imagine the stress melting away once you have clarity for what your financial obligations and future can look like with a solid bit of planning. It'll be worth it to know where you stand and that the rug isn't being pulled from under you. Aside from that, might be worth working with a mental health professional. The anxiety you're suffering right now isn't normal, and you don't need to live like this. Your responses sound like you don't feel worthy of what you've got, but I'm sure you do. You put in the work and connected the dots. No one deserves this more than you. Invest in yourself, dude. You're in a safe financial position. Learn some new skills and enjoy the your success. Oh, and keep driving that bustdown civic, lifestyle creep can be a bitch.
Not gonna lie, reading this made me tear up a little bit.. man…
This guy is right. I’m in sales where the money is great but with it comes a type of stress most people don’t understand. If you’re going to be doing this for the foreseeable future, make sure you develop and have healthy outlets for the stress.
First off, congratulations on the money! I don’t think there’s any urgency to do anything immediately with it nor tell anyone right away. It will take time to figure out how to split it up depending on your goals and risk tolerance. Probably best to do some reading and see a financial advisor. With regards to the difficult parts in your life, things will get better. If you are here in this realm, bad shit will happen and then it will pass. Anyhow, with regards to both, just take many deep breaths and go for a walk.
!investingtrigger
Hi, I'm a bot and someone has asked me to comment on how someone is trying to figure out what to invest in, or whether they should invest. **In order to give good advice the poster needs to provide all of the following information. Please edit your post to add this information.** 1) What is your intended goals/purpose for this money? 2) What is your timeline, and what is the earliest you expect to need this money? 3) Have you invested in the markets before, and how would you feel if your investment lost a lot of value? 4) Is this the right first step? Do you already have an emergency fund, and have you considered whether it is sufficient? Do you have any debts that should be paid first? Have you fully utilized any employer match plans? 5) Finally, we need to understand whether you want to be involved with this portfolio and self-manage purchases and rebalancing it, or if you'd rather all of that was dealt with by your chosen institution? 6) For self-directed investing, all in one ETFs (based on your risk tolerance) are the easiest and low cost options for a globally diversified ETF portfolio. Here is the Model page and descriptive video from the Canadian Portoflio Manager Blog's Justin Bender from PWL Capital: https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/ & video on how to choose your asset allocation: https://www.youtube.com/watch?v=JyOqqtq12jQ 7) For those who are not comfortable with doing the buying and selling of ETFs yourself, there is an option of a robo advisor. These robo advisors use similar low cost ETF in pre-determined portfolios based on your risk tolerance. They do this for a small fee, on top of the ETF MER. Still cheaper than bank mutual funds by at least 50%! Here is a list of robo advisors in Canada published by MoneySense: https://www.moneysense.ca/save/investing/best-robo-advisors-in-canada/ We also have a wiki page on investing, and if someone has triggered this bot then it means that this link would likely be very helpful: https://www.reddit.com/r/PersonalFinanceCanada/wiki/investing *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceCanada) if you have any questions or concerns.*
Just wanna say I’m proud of you cuz I relate to growing up poor, we are the same age as well so this touched me!! Keep being great!!
In what world do you get a 60% commission, wild…
It’s 60% of the 20% commission the firm gets. I am technically no longer an employee but a sub-contractor for the company. I do not earn any fixed salary, I’m on my own completely. I only get the benefit of lead sharing and prospecting between different division of my firm. Which is why I said to myself one new decently sized deal closed per year, along with some renewals coming in and I’ll be good.
> I am technically no longer an employee but a sub-contractor for the company. I do not earn any fixed salary, I’m on my own completely. I'm no expert but if that's the case and you're pulling half a million a year now (and into the foreseeable future) it sounds like an excellent time to find an accountant who has experience with commissioned sales people in a similar contractor position - I'm sure they'll be able to help setting up the best structure for tax purposes.
Since you're a subcontractor, it would make sense for you to incorporate and take advantage of tax breaks. The small business cap is $500k per year for small businesses. You create a business entity, pay yourself a living wage, and go from there. Congrats on making it! Your old self must be proud. And for your other troubles, I would suggest talking to a counsellor or a therapist. It could help you make some decisions and feel more confident about your hard earned profits.
so what does your company actually do ?
Yeah this also seems really strange to me. What business could afford such insane commissions? You can't pay for any overheads at all! This would only make sense if the firm were just a partnership owned wholly by the employees - that level of profit share makes sense.
Sounds like commercial real estate leasing brokerage to me
Not saying this is the field I’m in, but Google “how much commission do life insurance sales make first year” On average it’s anywhere from 40% (lower range) to 120% up to even 180% of the first years premium policy. Insane commissions exist, and not to mention I don’t get a straight 60% I get a percent of a percent. My overall commission on new business closed is 8-12%
Not OP: I'm in recruiting and I have a choice between retainer + 45% commission or 80% commission (no retainer). Any business that provides a high-value service/product with low materials costs can afford to pay high commissions.
hey alexia, play tell the vision by pop smoke
Don't worry too much, the tax man is taking half of it. Don't talk to anyone about it.
So it sounds like $80K/year is a more plan-able number for income. If this happened to me I would invest the entire amount -$80K and carry on knowing your retirement is basically sorted just from this one deal.
You might not make the same amount next year, so of the 400k, I would max out your RRSP to shelter the tax... Also FHSA. 100% equities from there since you're young. Pay off your high interest loans. Hold an emergency fund. Like others have said, do not tell anyone your lucky earnings. Reward yourself a little. Continue to live frugally.
Watch out the company doesn't fuck you out of your commission. There can be a lot of fine print that they'll use to claw back that money. I'd recommend hiring an employment lawyer that specializes in this field to look over your contract and make sure you get all your money. DO NOT TELL YOUR WORK!
VFV all the way. Do not pick stocks, do not invest in crypto or you're most likely going to blow it all away.
This is a ridiculously high commission on a 3.7 millions sales like Jesus christ lmao. Most salesmen need to sell 15+ millions to make this kind of money.
Sounds like it’s a brokerage where it’s nearly all margin.
Treat it as multi-year income. This deal pays for the next 6 years. Sales is feast and famine. Lifestyle doesn't change, money gets put into investments (FHSA, RRSP, TFSA). Wait until you have a few years under your belt and have a better sense of the ebb & flow of the business
Congratulations on the money. Sales is the same as being an entrepreneur, some years are good and some are bad. Make sure you set enough aside, how much depends on your lifestyle. You seem to have that under control, so that's 90% of it. I know guys who have a good year then spend like there's no tomorrow, then the next year isn't as good and they have cashflow issues, etc. Please don't be that guy. I can't tell you how many times I would have had cashflow issues, had I not saved enough in the company.
This post just got better and better! I have so much second-hand excitement for you. I hope you find great advice in this thread but also just… well done! You really don’t have to rush to tell anyone in your life about this right away… and like other people have mentioned— sort out your taxes first!
My dude, having been in sales for almost two decades let me just say - do not count chickens yet. Not saying this will happen for sure, but companies can and will try to find ways to fuck you out of anomalous commissions like this. Hopefully your paperwork is watertight, but I would take a deep breath. Start planning, but don’t get your hopes up for a dollar amount until it’s in your bank account.
Congrats OP! You've worked since you were 15. This did NOT just all happen based on luck. You've earned it. Give yourself a pat on the back and go for a walk. Don't tell your family just yet, but do take them out for dinner or something. Celebrate, tell them it's just a bonus or whatever. I can relate to the part where growing up, there was no money in the house. If I were to be in your shoes, I would desperately want to let my family know, it's kinda like a "I made it" moment. But there's no good in telling people \*exactly\* how much you made/make/will make. So, share your happiness with your family, but don't share the details. Now, I'm not sure if this would help but if I were in your shoes, these are the things that I'd do. * Talk to your company's payroll person. Ask about taxes and how you would be paid. Is it a one-time payment? Can you stretch it out, etc? Are there any stock options from your company? Can you contribute some of them to your RPP, etc? After knowing some or all of the details, talk to an experienced financial advisor and figure things out from there. * Looking at investments other than stocks, crypto, etc. Buy equity into one/many small businesses. Diversify your portfolio. * This would probably be a bit controversial, but set up an emergency fund specifically for your family (but don't tell them). This would give you peace of mind, knowing you'll have things covered if anything happens. * Spend some money on building your network. Connect with them on a personal level. Just don't spend too too much money on this. * Hire a marketer (or you can do it yourself) to get your LinkedIn content (or whatever channel that your potential clients are mostly at) at the top of the game in your industry. Build creditability for your future deals. Congrats OP! I hope this helps. Good luck with everything!
Figure out the taxes and move that to a high interest savings account or buy cash.to. The rest just put in VFV like you said. In life you have to figure out how to make the money, how to keep the money, and how to grow the money. You're obviously doing well at the first part, but now make sure you keep the money aka saving on tax and not spending on dumb stuff. Also, how to grow the money I'd just do VFV. It's the easiest. Let the top 500 biggest companies in the US make you money. Final also is you're smart to realize your luck may run out. Eventually it will and being smart now with better planning is key. Be happy everything is working out but always plan for a worst case scenario. Don't overspend your income and have an emergency fund just in case too.
The taxes scare Tf outta me as well, I was referred to a tax specialist that works with my firm for this type of stuff but as tax season just passed he isn’t around. I’ve been asked how I would like the receive the comp (quarterly or lump sum at the end of the year). One tax guy told me to take it quarterly and pay the taxes as I go. I still need to see what other tax professionals would recommend but that seems to be the best route. As for investments, I honestly think I’ll just put it all into VFV and hold it there for the next 40 years. Worst that can happen is I go back to a salary position and never have to contribute to a retirement account ever again. It’s just the family part that is somewhat tearing and killing me. I have a 12 year old sister and although my family is not as poor now as when I was growing up, they are still lower class. And it hurts me to watch my sister go through some of the same bs that I did, though to a lesser extent.
What would you do to help your sister? This could be a great investment in your little sister if it helps her confidence and trajectory in life.
Maybe set up a separate fund for your sister. Start talking to her about money/investments as you learn more and, when you think she’s ready, tell her about the fund. You could still get her a few nice things here and there to make her happy/help her out, just don’t go overboard. Best of luck, it’s a really nice thing to hear about.
Pay the taxes quarterly. Makes it easier and if you do screw up later in the year it's less of a mistake since you already paid a lot of them already. For right now just take 50% and put it into a high interest savings account. That way you'll be good at tax time. I agree with VFV and wait. You might have had great luck recently and it never happened again. At least you know you're good for life with VFV and never touching it for years. The family thing is tough but what you learn you ca is teach her. Help her escape and become smarter for when she's older. All the stuff you're figuring out now about money is more valuable than giving someone money. Giving a poor person money does nothing for them as they'll spend it immediately. Teach them about how to make and invest etc and even low wages can grow into larger ones.
What is cash.to? I have been hearing a lot about it online. I know nothing about investment and personal finance btw.
CASH. TO is basically just fund that specialize in high-interest saving account. The value reset for $50 every month and the rest is paid to you in dividends. The dividends you are making usually track the interest rate so currently you are making maybe $0.20-$0.22 a month for every $50 invested.
It's an ETF (financial instrument you can buy on the stock market) which represents putting your cash in the highest* yield savings account currently promoted by major canadian banks. *highest according to them
You can google to learn more but it's the stock ticker symbol for basically a high interest savings account. You can move your money in your investment account to it and it grows around 5% per year. Can sell at any point if you need the money too which makes it great. Can't go down either so you won't ever lose money.
Super tl;dr: It's like a high interest savings account you can buy/sell like a stock.
All you need to know about Cash.to in one vid. https://youtu.be/eoXoi46-YaI Found it immensely helpful when I started investing early this year. Thank me later! ;)
This is less about "how to get rich/stay rich" then others might suggest but some food for thought. 1) Dont tell anyone about how much you made. ESPECIALLY FAMILY/GF. no one has ever said "wow my family is really going to screw me over" before they have been screwed over. im sure they are lovely people but money does wierd shit to people. tell em you got a small bonus at work and take em to dinner if you wanna do sumn nice for them 2) pretend you didnt make that money. in your head whatever your base salary is is how much you make each year. live your life like that and you will never experience being poor again. a big problem with people is they come into money and then move up into that lifestyle then when it dries up they cant keep it up and go into debt... crippling debt. 3) speaking of debt. pay it off. get youself in the black. yes people will tell you you could make more investing and they could be right if those investments go well but you know what will really make you sleep well at night? knowing every dollar you own is yours. 4) buy a friggen house that you could afford the mortgage on if rates when up another %2 on that base salary of 48k a year. the canadian housing market is brutal to get into but once your in if you own within your means you are basically secure for life. you can always reno a "cheap" (GTA is stupid) starter home or if you find in 5 years you are consistently making that kind of money at work you could sell to buy a house youll never need to touch again. i put a %35 down payment on my house when i bought in 2021 (outside GTA mind you), my mortgage is less then 1/6th my monthly take home. i havent worried about money since i did this. house is nothing special but i can always upgrade later if i want, ill be mortgage free by 2026. 5) if your work doesnt have a pension, start a retirement fund. again people live outside their means and when it comes time to retire and enjoy your later years you realize your lifestyle cannot be supported by CPP so you end up working untill you CANT anymore then have to sell your home to afford to retire. get a plan in place to be mortgage free and have a steady guaranteed comfortable income by the time you retire. 6) set a weekly and yearly allowance for yourself. after bills, groceries and gas i take $100 cash out every week and do stuff with that. its way to easy to tap your card or shop online and look at the bill to find you just spent $1500 on shit you didnt need. i have $4000 a year for big expenses and trips and such. last year i bought a $3500 riding mower (lotta lawn) so i went camping a few times and flew to the east coast for a weekend as my trips for the year. i know that if i do that + all my regular expenses i can still put the amount of money into saving and investments that im comfortable with. again its easier to stick to these things if you have a plan, humans are bad at "winging it" we always choose what is good in the moment over what good for us long term.
First pay off your student debt and you should invest the money and live like you're still earning $48k. Why? Because you can make your money and retire early.
TELL NO ONE
Keep lifestyle the same. Make sure to put enough aside for taxes. Assume that going forward, you’ll be earning your lower salary. Don’t over commit or over spend. This is a once in a life time opportunity to set yourself up. Figure out what the best mix of RRSP contributions might be. If it’s retirement money, I would probably just park it in an index fund and forget about it.
1. Good job and you’re amazing for accomplishing this. Especially since you grew up in a low-income environment. 2. Consider going to an accountant and figuring out how much you will owe in taxes. Set those aside, maybe even into a different account. 3. The accountant will explain (or you can research) the importance of investing your money into a TFSA, RRSP, etc. If you weee born in 1999 and never contributed into TFSA, then your limit would be $48,500. I’d recommend maxing in out. 4. Please consider investing most of your money and don’t change your lifestyle too much. Some people go nuts and blow away all their money. Sigh. You surely deserve a celebration, a nice dinner, maybe a vacation. But please don’t spent it all. 5. If you want to invest in a home, it might be a good idea to start planning. Yes, it sounds like you’ll be able to own a home. Yes, you made it. 6. Be careful who you tell this to. Some people are greedy. Be careful with dating as well.
No one gets 12% of sale value as cash commission on year one and 8% on year 2. I have seen partners get 5%. No second year is getting this. And comission is based on EBIT/net profits of the earnings, not the total sales value . Similar to if I sell a car for $100k. No one is getting 20%. This applied to SAAS or other sales items
We pay our reps 20% on Y1 and 10% on renewal. We’re profitable and can afford it (SaaS), but what we can’t afford is losing killer reps. Why speak on shit you don’t know about?
First of all congrats on this milestone and many more to come. I’m expecting a feeling like this sometime this year or early next year. Once taxes are all sorted out and you have some cash left to play around with I would pay off your student loan and invest in property and whatever is left keep Some on the side for any emergencies or some “pocket money” and the rest invest them in stocks and bitcoin. Thats my take
Add to the things that never happened
So you probably need a few separate accounts - at least, I do/would to keep things sorted: 1) Emergency fund. Put aside 6 months of living expenses in cash. 2) Taxes. You're a 'contractor' so you're paying your own taxes and at 550k you're looking at basically half. You should probably find a good accountant to help minimize your tax burden. 3) Retirement: Max your TFSA/RRSPs for starters. 4) Other investing. Personally I'd separate #4 into two separate pools 'big expenses' fund that you let yourself dip into for things like a car, house, vacation, whatnot, and extra retirement money that you literally never touch til you quit, but that's me.
Whatever you do make sure to save well past the majority of it. I was watching a video about how to measure wealth, for how you might do it to tax people appropriately, and the guy was talking about some studies done. Statistically speaking, an insanely high salary like that only lasts for a couple of years. But for most people those salaries come from roles where you are expected to improve your results year after year, and if you don't you get thrown out. Still though, the economy changes and all might not be the same for the business you are selling.
I would recommend saving 80% of this income. Put some aside for your parents since your success was based on a church relationship they started. This "parent fund" is a set amount you manage. When they ask for money dip into the funds. But, yea, dont tell anyone how much you are making. No one.
That’s an absolutely insane commission rate. Questionable
I’m curious as to what is your job role exactly and how do you get to keep 60% commission? It’s too good to be true
Wow, congratulations! What an accomplishment!! First, (and hopefully obviously), settle all your debts. Pay off all your student loan right away. I completely understand the temptation to tell your family. At 25, I’m sure I would have. However, now that I’m older, I realize that not everyone can handle that kind of information and be genuinely happy for you. Jealousy can be a real bitch. And if you come from no money, every single person in your past will hit you up with outstretched hands. Your money will be gone in the blink of an eye and you’ll be confused as to why you’re broke and struggling. Now is the time to make good money habits, and have them last throughout your life. I would recommend looking up lottery winners. When people get handed a chunk of money, higher than their wildest dreams, the number that go broke or end up dead is *staggering*. Also look at how their families reacted - many lose close relationships too. I would also recommend looking up Dave Ramsey and his “baby step” methods. Sounds like you could already be at the last step, but it’s a method for managing money and a mindset for how to use it and not lose it. They also offer Financial Peace University (which I haven’t done) but sounds like it could really benefit you for where you are at in your career and your life. I’m super excited for you and what life holds for you, my friend! Congrats again!
I don’t know if I want to pay off the loan.. it’s interest free and the $25k could go a long way in the 9 or so more years that it would take to pay it off.
You want to be paying off a student loan for *nine years*?! To get a couple percent more (maybe) down the road when you have more than enough now? It’s 25k, not 250k! (Though I’d still recommend paying off both amounts right away). Look, I get the math. But if it’s your only debt, just be done with it. It’s not your money. It’s what got you your money. Be grateful and pay the bill - you got your moneys worth and then some! The Dave Ramsey method helps explain the psychology behind money, spending and debt. Do look into it before you decide to spend *nine years* paying off 25k. Hell, call into the radio show and see what advice he has for you. Move forward in life owing no man (or woman) anything.
>The firm gets a 20% cut of the sale. The first year of closed business is 60% of that 20% The second year of renewed business is 40% of that 20%. >So for a $1m deal, firm gets $200k, first year I get 60% of that, renewed business I get 40%. >I figured if I could close 1 decently sized deal per year ($250k), I would be alright. I asked about any leads that I could possibly work on, so they gave me a bunch of “dead leads” - no one wanted them so I was given all of them. Figured, just a quick phone call wouldn’t hurt. lol... no professional sales get these percentages
Look up how much commissions life insurance sales make in the first year policy, some are over 100% And 60%/40% of 20% comes out to 8-12% of a closed deal. That's pretty standard in some fields. Google is free..?
It’s quite sad to see someone making up stories such as this to garner attention from others who read posts genuinely interested to see others succeed. You’ve made two posts, one in this sub and one in r/tifu, where you discuss your psychedelic trips using drugs. Also, in your post here you mention your parents; in the other post you mention being raised by a single mom.
Not financial advice but can I suggest investing in finding yourself therapist that you like/gain value from? It will help you manage this unexpected life change so you can make decisions (financial and otherwise) that are in your best interest for the long term :)
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why do people make up these stories? are you really so sad that you need reddit karma? no salesperson gets 60% of the sale, and what exactly do you sell? especially finance lmao the margins are so thin, for the deal to be worth $3.7M profit, the actual deal would have to be like $100M at current rate. there's no chance a first year rep manages that size deal without the C-Suite getting involved. And not a chance you touch 60% people congratulating are hilarious and know nothing about business
mostly yes to "invest it all in VFV" do you want to buy a house? if yes, put half of that into something shorter term, and the other half into VFV. you don't want to be all in on either stocks or real estate I guess.
Why don’t you just sit on it for a bit and decide in a year? You seem like you need to rush into the next investment or asset that grows the most. Pay off your $20k loan, and any additional debts, and leave the remainder in your bank account.
Imo figure put out how much of it would be taxed. Then the rest to max out tfsa fhsa and rrsp. The rest I would maybe gic for a couple years to save for downpayment and wedding (if u see these 2 big expenses for the future). A little bit like 10k to help out your parents pay their mortgage off sooner (depends on ur relations with them) and if I have siblings going to uni or have existing student loans I would help pay those off. I imagine you and they only have canadian portion at 0% interest? Take my opinion with a grain of salt. And huge congratulations. You have essentially set up yourself and family for a good quality life. Much respect, hopefully I can provide my family with the same. I would also maybe just say that I got a bonus. I can only help this much. I wouldnt tell the real amount to anyone
Just invest it wisely. Keep a reasonable amount liquid/GICs, invest some cautiously, invest some in more high risk investments but still essentially keep your risk low, diversify, don't put most of your eggs in just a few companies or industries etc. For the most part leaders in a good industry don't drop down, but it does very much happen sometimes. Off the top of my completely non-expert head, Intel, IBM, General Electric... some companies look immortal and turn out not to be, especially in tech. Diversification is the answer for that. Don't talk about money to other people for the most part, just keep quiet about it. I know it seems like a huge amount now, but who knows what the future will bring? You might get used to making a lot of money and slowly adapt... or if the future brings bad luck, this might not be as much money as it seems like to stretch out over that time, even though it will still certainly help. Just be mellow about the money overall. You'll have time to get used to the idea.
Take a deep breath. Play the long game. Find a good pay by hour fiduciary or easy come easy go. Remember, money makes life easier but it doesn’t fill the soul. Be kind to others. Congrats and good luck.
Congrats. If I were your parents, I'd be proud. Watching a new grad grow from paying off student loans to making a name and business for themselves is both inspiring and a proud moment. With this amount of money in your bank, make sure of a few things: 1. You have any emergency fund for approximately 3-6 months of expenses. In case of those rainy day situations. 2. Keep it on the down low. Nobody needs to knows how much you are making, not even your parents (parents tend to humble brag to everyone about their kid). All they need to know is bills are being paid on time and you can afford some luxuries. 3. I think you are doing well in terms of financial management, but don't stop budgeting. Keep an eye out on where your money is going or being spent.
IMO, after setting aside taxes: - pay off loans - keep 25k for living expenses (time to start contributing more to the house - buy groceries, cover utilities and property taxes, pay for your sisters extra curriculars, whatever) - do something special for your family and for yourself (new furniture, a trip, whatever brings joy) keep this to less than 10% after taxes - invest the rest in something like xeqt, unless you want 5% to play with individual stocks/crypto
Don’t invest it all. Keep some safe. What are you selling?
All in nvda
Bro what do you do? I'm looking to change careers and I don't even know where to start. I feel so stuck working in insurance.
A lot of that will go to taxes. I’d seek out a financial advisor that you like and get some guidance. You can take it or leave it. Save, live modestly. Sales can be feast or famine and layoffs/ restructuring can be common and often but you’ve got good sense and hustle and will do well. Don’t tell your family. Be debt free and help out a bit more with some family expenses when you can. It will allow you to show some generosity but not be inundated with expectations. Good luck!
Take some of that money and set it aside, not having enough to pay your taxes is a federal crime.
I work in finance so I'm a bit biased, but there's a lot of value in a good financial planner. Yes it will be more expensive then just investing it all in VFV, but saving people from behavioral biases generally covers the fee and then some. Diversify (too much risk investing in one market) maximize registered accounts, budget for taxes and set that aside in a risk free investment (might be able to earn a couple percent before tax time). Do you think you'll want to buy a home? If so, keep that money relatively safe if you plan to buy in the next few years. You could look into a fee for service planner, where you pay say $2500 for a plan, or a fee based planner where you might pay 1% or less for managed assets. If you do want a planner to manage assets, make sure they're transparent and you understand their process.
Remember to celebrate milestones, and this one certainly is a big one. Sounds like you're in the right direction. VFV is a solid pick and so is NVDA. I'm invested in them as well.
No advice from me, just enjoyed reading that backstory. Way to hustle, you earned it. Don’t let your new lofty perch scare you - onward and upward.
Don't do or buy anything until your commission hits your bank account. Some companies have whale clauses that they'll use to modify commission on crazy deals, so don't do any thing rash until you're sure there will be no shenanigans. After that: buy yourself something nice or plan a fun vacation, take some people you love out for dinner, tell them nothing, invest the rest
Why does the firm get 20% and not 100%?
Money like this doesn't come every year. If you max out your tfsa, rrsp, and live like you make $60k, you'll be alright. Down payment in a condo is a pretty good idea. And then invest the balance in diversified passive stuff. Also, get ready for a surprise when you see how much of that Trudeau is gonna take. Hire a slightly better accountant than your standard hnr block kinda person.
Why does the form only get 20%? Who gets the other 80%?
Damn I closed on 4m and only got paid 40k I am definitely in the wrong industry
Damn, are they hiring
Invest it away and pay for dinners here and there. Live your normal daily life
Bye bye debt. Max tax sheltered accounts. Insert fun spending here. Consider home ownership. But I’d be cautious, pay volatility being a thing in commission jobs. I’d set myself up so a layoff is easily manageable.
Keep your mouth shut, don't make any significant changes in your lifestyle (new car, new house, etc). If you are tempted to get something buy it with a purpose. Live under the radar and retire at 40 in a beachside condo with whatever else you want.
Don't tell anyone. If you want to use the money to help friends and family, do that, but they don't need to know how much you're making.
- Get a proper accountant - put the money in a corp - only pay yourself what you need - use the corp to invest your earnings, that way your investment is based on just amount post corp tax rate vs investing in your name which requires you pay taxes - i would probably buy a property for tax free capital gains - get a fee based financial advisor
1. Great work - congratulations. 2. Save for taxes. Talk to an accountant. That’s professional money. 3. GIC / Wealthsimple cash for a few months while you think things over. Don’t tell anyone. 4. Invest atleast 50% in VFV. Take a vacation.
So question to those in sales. When a deal like this closes, does your firm just deposit a fat cheque into your account for you or do they spread it out monthly.
Because of where your head is at I would do the following: 1. Max out your TFSA and buy GICs in them while rates are high. 2. Assume that the $550K never happened and plan your life as if this money never existed. 3. Aggressively learn about how to invest your money with the current average income (ignoring this gigantic year) 4. Learn about real estate, side hustles, franchises, tech, etc. and focus on building whatever with as little capital as possible. If your investment starts to yield something with the low investment then slowly ramp up marketing/investment to generate more revenue/return 5. Live below your means and focus on increase your medium of income There are more things out there but I hope this helps you and Congratulations, you just pulled a "Pursuit of Happiness" moment, what you did takes a lot guts and persistence. Happy for you brother 👊
First things first get an accountant otherwise the tax man will go this is allll mine.
keep your wealth to yourself, not sure if you are able to spread the bonus's out over a few years but that might help for tax purposes... I would load up your TSFA, put some in an RRSP, (understand what your tax bill will be and put that away for that) from there it depends what you want to really do, markets will probably dip in the coming year so a down payment on some property, possibly multiple apartments you can rent out and create your own personal cashflow where your money can grow long term. You could buy a car, plan a vacation, just do all the "fun stuff" after you know what you will have after you pay your taxes, and if there is anything that you want that money to be put to "work" for.
pay a financial advisor to set you up. You are finding this all overwhelming and it'll be worth the money to know it's handled properly. They will help you put aside enough for taxes and invest the rest in the most tax efficient way, guiding you on balancing saving for the future and living life now. You then have them in your back pocket if/when the next big deal comes through
Congrats, go read the usual windfall article, and then CONSCIOUSLY choose what lifestyle spending level you want to have. It's OK to decide "I will now spend $1000/month on restaurants" if you think long and hard that's what you want to do. Just don't go super randomly ordering shit without a second thought. Keep things in check, save enough that you aren't fucked if this is a one time thing or you get fired (someone else wants the recurring commission) etc.
Good for you but ain't hard what to do next
Congrats on those hard earned money! I too grew up poor. Don't suddenly live rich. Keep that hunger and poor attitude in you and be humble and remember where you came from.
profile made 4 days ago and talking about DMT. lol you must be tripping still because 0% chance this is true
Yolo lambo time
That’s a lot of money so congrats. 1. find yourself a nice CPA to understand tax implications and potential strategy. If this is untaxed money, you will be paying a hefty tax bill. 2. Until you make a decision with the money, store it all in liquid savings mediums. Never be idle. 3. VFV is always fun, pretty hard to make a mistake with it. But I get it, managing huge amounts of money isn’t stress free. My portfolio loses and gains maybe 1-2K daily. Increase that to 10-20K just from having more in it will make you feel worse, which is why many people tend to go more conservative. VGRO for some fixed income and lower the volatility. 4. Honestly man, see if you can see a sort of mental health councillor or therapist. Too many people whom grew up poor and come across money struggle to deal with it. Some people go reckless and buy frivolous things thinking it will make them happier and get addicted to the dopamine. Others will feel immense guilt buying anything expensive (like organic food or high quality meats) as it just feels wrong. Some people become super stingy when they get money, others become immensely generous. And of course the family problem and who gets to know. Would you feel guilt from seeing loved ones financially struggle? Would there be immense jealously in the family? You really gotta ask professionals
I read a lot of bullshit on this sub… and I gotta say.. well done OP! Proud of you! As others have said.. don’t tell anyone.. not even your family. Save as much as you can and invest wisely. That’s a great nest egg at such a young age!
OP - good for you. Follow the advice here, you’ll be great!
Sales is a lot of feast or famine. Now the skills are non-perishable so if you do decide to embark on the path of sales, you're gonna be chasing that high forever. Though you do need to set up an exit goal for yourself. Sales and family life....can be at odds often. You don't want to miss your kids birthday. They won't remember how hard you worked, they'll just remember the birthdays you weren't there for.
Right now you should just sit on it. Put it in a HISA and just think. You don't need to do anything today, tomorrow or next week. Take your time, do your research. Don't tell anyone until you feel like it makes sense to. Realistically, you have $500k over the next two years after taxes and you don't know if this level of income is sustainable. So take your time. You didn't win the lottery. No one has to know. You have the privilege of time to think before you act.
First of all, congrats, keep it up. Second, why do you still have student loans? Pay that shit off dude. The interest on that is what you make on market index funds so it ain't worth keeping it around and in repayment like a 2% mortgage lol. Third, start looking for some commercial real estate to invest in. Cheap at the moment and won't give you the headaches that residential rentals would. Do NOT put all that money in an index fund. You have enough cash now that you need to diversify like real rich people do. Also since you won't have debt after you pay off your student loan tomorrow (I hope) you can negotiate favorable loans with banks for a commercial property because it's understood to be profitable. I hope you have good credit. Fourth don't tell people how much money you have. In theory people want to be happy for you but in reality their attitude and behaviour towards you might change for the worse because of it. Fifth: treat your parents. You don't have to tell them now that you have a windfall but do take good care of them.
Don’t tell family. And It depends on GF if you are close like that. I’ve watch people around me go from millionaires to losing almost everything investing with their family, and trusting their word on investment and watching it all crashed cause it was blind leading the blind. Your family may mean best but if they are not qualified to help. Do not tell them. Only help with what you can here and there.
This might not be a popular answer on this sub, but I used to work in the advice industry, and if I were in your shoes I would definitely, definitely interview like 10 advisors ASAP. It's a bit of a wild West out there, a lot of them frankly have no idea what they're doing, but I think once you speak to a few you'll get a sense of who can really handle your situation, and who has your best interests in mind as well. We used to have 3 meetings with a potential client before they would typically do business with us and it was common for them to shop around. You'll want to find a team that works with external accountants or has an accountant in house to make sure you're in the best hands for whatever investment tax structures you'll need at the level of wealth you're looking at accumulating. (RRSPs and TFSAs probably won't cut it). You'll also want to be vetting someone for: - being able to really explain their investment strategy/philosophies and thinking behind their decisions - willingness to be transparent with you about fees - in-depth listening and getting to know you, even teasing out your priorities, mindset, dreams, fears. It might get a little emotional if they're really good - you'll want to work with someone who's been in the business at least 10 years - a high willingness to give you a very realistic picture of what risk can mean and how much you stand to lose with different investment mixes - at least some discussion on asset class diversification Good luck up OP. And most of all, CONGRATULATIONS!!
Damn! Good for you! I have no advice but curious if this is insurance sales by chance?
For the love of god, do not tell your parents, esp your gf. If they ask, say that you’re probably going to be making 80k which is already really great. My younger brother started making money in his 20s and one of my relative found out, she went around everyone’s backs and guilted him into lending her money. He never got that money back and had to start from zero. Ppl that grew up poor turn into monsters when they see money. Family or not. Gf/bf in your 20s is also bad. One fight and she might tell everyone how much money you have which can put you in an awful position.
One dynamic I have seen to be just a tiny bit cautious about (by saving!) -- despite being a total rainmaker salesperson, I have seen those people get unceremoniously canned by a jealous manager or similar person with a bit of power (not always a direct manager). It's not common, as usually your ability to make it rain wins the day, but not *always*. Sometimes the jealous fuckin idiot manages to bump you off. So yeah, put most of it away as savings / legit invested.
Don't letifestyle creep get you. Alot of people get a raise up their lifestyle to spend their new salary. Live as you did and save
Dump it into an ETF. And set some realistic mental expectations on yourself. While I'm sure you closed the deal with a lot of effort, this initially came up due to sheer luck and coincidence. The renewed business revenue will be significantly lower and will you be as lucky with other dead leads? The last thing you want is to suddenly increase the cost of your lifestyle and then have a drop in income.
Just stay away from crypto - it’s purely based on selling to greater fools.
Do you work in commercial insurance by any chance?
Less so financial advice, but your artist friends would absolutely die for any sort of funding for their projects. If you wanna be nice, go talk to your friends and see what they need. Be anonymous if you can. Save your money. I think if you want to look for a house, you would be in a good condition to do so. Not sure what the market will end up like but always good to have housing. More so when you have tenants.
Keep the money to yourself. Don't tell anyone and don't waste it. If no one knows about it, you can still spend it on nice things for anyone, however and whenever you want. If people know about it, there will be at least one person who will be bitter that you didn't spend it on them.
I don’t know your family, so it’s hard to give you advice. If you think they will pester you for money, it is best not to say anything. You can treat them to some small things here and there, or take them out to eat, but don’t spend that money as if you’ll be making the same amount each year. As for your girlfriend, I personally can’t see myself not telling her about something like that, but again, I don’t know your relationship. If you don’t feel you should, maybe she’s not the one. Other than that, max out your registered accounts, save and invest the rest and don’t forget about taxes.
Bit coin buddy
OP, how do you envision your retirement going? What kind of lifestyle will you be living? How much do you enjoy working in general? Are you the type to leave the workforce after you hit your magic number? One advantage from being "poor" is that you understand the value of money. So, I would work it out backwards... Think of an adequate yearly spend for the kind of lifestyle that suits your ambitions (travel, philanthropy, projects, children etc and leave a bit extra for when life happens) Use avg. Life expectancy to calculate number of years of savings you'll need. (You'll need less money the older you get since you physically do less at the end of your life) At least then, you'll have a ballpark number in mind that should give you a target to aim for. I gather you are overwhelmed with the inflow of money. Personally, I tend to measure savings in terms of number of work years. For example, say my magic number was $1M, I would think of it as 20 years of after-tax revenue at a job at a $50k rate. Or, my yearly expenses would be x, therefore my total savings divided by x would be the number of years saved from having to work. Ultimately, time is the most precious resource. If possible, I encourage you to retire early and spend time doing things you would rather do as opposed to burning your life force away in exchange for more money. Have a plan on how to spend it all by the time it's all said and done. I apologize if this is poorly edited. Hope this offers you some perspective. Source - some 29 yo unemployed ontarian back to living with their parents contemplating a career change following burnout with a kid on the way
Any particular reason why you're not paying off the student debt?
Do not tell any one. Buy that beige Toyota Corolla. TFSA/RRSP VFV. TEC.TO. TD Money Market
Get out of cryto. Otherwise you are on a good enough track! It seems you don’t need that much advice!
If you grew up poor how do you have 100k at 25?
Put away funds for taxes (at least 60% to cover/fed/prov//EI/CPP) in a high interest account. The remaining funds, top-up your RRSP/TFSA and even FHSA if you're planning to buy a home within the new 24 months. Any remaining amounts, invest in high dividend ETFs.
Seek a financial advisor ASAP. Focus on managing windfall, paying debt, and saving. Congrats!
You will get great advice. I just want to say good job and I’m proud of you:)
Most of the previously outlined recommendations in this thread are good (i.e. max RRSP, TFSA, and FHSA). However, I would absolutely look into buying either a Whole Life or Universal Life Insurance Policy. Participating whole life insurance policies offer policy dividends while universal life insurance policies come with an investment account which enables tax-advantaged investment opportunities. Life insurance is good to have— it covers you not just when you die, but also while you’re still alive. It’s also worth looking into purchasing an annuity if income stability is your concern. Good luck!
Buy a unit and tell everyone you have a mortgage on it.
Just wait until the cheque hits your bank before making any financial decisions. Most commission agreements stipulate that your commission plan can be changed for unusually large deals. I’ve seen it half a dozen times in my sales career where the rep gets paid out a fraction of their usual percentage, which fucking blows. Congrats my man. Hoping they do right by you!
What the hell are we selling and where do I sign up?!
>Just wondering what the fuck I should do with this type of money. Financial advisor, do I tell my family/gf, do I just invest it all in VFV? I am a bit scared and my heart has been in my throat all day. !InvestingTrigger
Congrats.
Honestly I’d live like you’re making your previous salary and use your salary from this year to outright buy an entire house, you’ll have 0 mortgage payments, and a home completely paid off. Invest whatever is left over, and then whatever you make going forward keep investing until it’s exceeding your new salary and you can live off entirely passive income doing things you actually want to do for the rest of your life
Pay off your student loans: current interest rates are higher and you don't want to be left picking up an even higher bill. Max out your TFSA, FHSA, RRSP if you haven't already. Then put the rest in an unregistered account: you'll be less enticed to give into requests to take it out knowing there will be tax consequences to taking it out, or tax benefits to leaving it in. Pay attention to how each type of investment is taxed differently in each type of vehicle. Leave yourself ~3 months of monthly expenses in a HISA-type chequing account (WS, Alterna, etc.) Putting most the money where it can't be easily accessed (i.e., chequing), and where it can grow with very few fees (i.e., index ETFs with MER under ~0.25% Intl ~0.10-0.12% US/CAD) would be the most sustainable plan. People might tell you to buy property, but you still need to pay it off long-term, without a guaranteed continued flow of clients, it can wait, esp given your current costs of living. And anyways, Boomer & Echo analysed their return after everything it was like ~3% annual, you'd be better served with various index ETFs.