Path to $100,000 with a $60,000 Income using a 3.5% HISA
| Years | Saving 10% ($500 a month) | Saving 15% ($750 a month) | Saving 20% ($1,000 a month) |
| 1 | $6,517 ($17 interest) | $9,776 ($26 interest) | $13,035 ($35 interest) |
| 2 | $12,746 ($246 interest) | $19,118 ($368 interest) | $25,491 ($491 interest) |
| 3 | $19,192 ($692 interest) | $28,788 ($1,038 interest) | $38,383 ($1,383 interest) |
| 4 | $25,863 ($1,363 interest) | $38,795 ($2,045 interest) | $51,727 ($2,727 interest) |
| 5 | $32,729 ($2,269 interest) | $49,153 ($3,403 interest) | $65,537 ($4,537 interest) |
| 10 | $71,094 ($10,594 interest) | $106,640 ($15,890 interest) | $142,187 ($21,187 interest) |
| 15 | $116,612 ($26,112 interest) | $174,918 ($39,168 interest) | $233,224 ($52,224 interest) |
| 20 | $170,673 ($50,173 interest) | $256,009 ($75,259 interest) | $341,346 ($100,346 interest) |
| 50 | $788,780 ($488,280 interest) | $1,183,170 ($732,420 interest) | $1,274,082 ($733,082 interest) |
Increasing your savings rate accelerates your journey to the first $100,000. For a $60,000 earner, saving 15% rather than 10% results in achieving this milestone in just nine years. It’s all about leveraging compound interest to your advantage.
Optimal Ways to Invest $100,000 in Canada
Your investment choices for your first $100,000 depend on your objectives, contribution amounts, and time horizon.
If purchasing property is your objective, consider utilizing a First Home Savings Account (FHSA) alongside a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). For other goals like retirement or education, RRSPs are beneficial, offering options to borrow via the Lifelong Learning Plan or Home Buyers’ Plan.
Diversifying with both an FHSA and a TFSA is recommended for real estate endeavors. A TFSA is ideal for saving towards a car, while retirement planning may involve RRSPs, TFSAs, and non-registered accounts.
Seek out top interest rates from online banks to maximize returns. Additionally, working with a financial advisor can lead to superior rates, with advisors often securing rates much higher than those available directly from banks. Explore high-interest savings accounts with rates ranging from 3% to 5% to enhance your investment strategy.
