How Canadian millennials can get financial revenge for missing the real estate boom
Kristy Shen, who is in her early 40s, has never bought a home and doesn’t plan to (unless you count her shares in real estate investment trusts).
But when she was in her late twenties and working in the tech sector, Shen felt the pressure to become a homeowner.
Still, after the 2008 financial crisis, Shen said her goals changed drastically after a coworker collapsed at his desk and underwent emergency surgery after overworking himself.
Shen decided she didn’t want to continue working until she was 65 just so that she could pay off a massive mortgage, and sought financial independence instead.
“Instead of taking the money that I saved to put a down payment towards a house, I put it into a portfolio and bought index funds, instead. And then that portfolio grew over time,” she said.
When she was 32, Shen and her husband managed to retire with $1 million in savings and started travelling the world.
The math on homeownership did not make sense for Shen, and doesn’t for many other young Canadians today.
“I think that we need to write a new rule book, because the rule book is coming from our parents who actually were able to afford houses that were only two to three times their annual salary,” Shen said. “And now my peers and the next generation are trying to buy a house that’s 20 times their annual salary. It doesn’t make sense.”
“I think there’s been too much of an emphasis on real estate and that being the only path for people to accumulate financial wealth, perhaps at the expense of other options, like investing in the stock market,” said Jason Heath, managing director and certified financial planner at Objective Financial Partners Inc. “If you were to look at (the S&P 500 index’s returns) over the course of the last 10
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