12 Years for Average Canadian Grad to Save 5% Mortgage Down Payment: Study Choice of Career has Major Implications for Future Wealth
TORONTO, ONTARIO--(Marketwire - Sep 25, 2012) - Securing the Canadian dream - a good job, nice car and an affordable mortgage - may be increasingly out of reach for the millennial generation. A new research study from RateSupermarket.ca, Canada''s independent personal finance comparison site, offers the projections of future costs of living for young people starting out today. As the cost of owning a home continues to rise and jobs are very hard to come by, the picture is not pretty.
The study found that starting salaries and typical annual increases are not keeping pace with the rising cost of living. This means even those working in careers once thought to be secure and lucrative are struggling to meet their financial goals.
"What we discovered is that some paths we typically expect people to thrive in are not the money makers they once were," said Kelvin Mangaroo, President of RateSupermarket.ca. "Some people choose careers for interest rather than earnings, but we were surprised by the numbers, particularly with certain professions."
Accountants, for instance, do not make as much money as would be expected, relative to the cost of living. As outlined by RateSupermarket.ca''s recent infographic "Can Canadians Afford The Future?", with an average starting annual salary of $44,500, it will take the average accountant 13 years to save enough for a 10% down-payment on a house.* A paramedic will need 9 years to save the same amount.
Following the findings, RateSupermarket.ca polled Canadians on which careers they thought had the most future potential; respondents got it backwards. While lawyer was the top choice with 39.5%, statistics indicate that the field is facing a growing job drought.
On the flip side, while 0% of respondents thought Library Sciences was a field worth pursuing, it is actually one of the most promising career paths for this generation, according to human resources experts, with the opportunity to transfer existing skill sets to online applications.
The Numbers
Average house price in 2011: $357,085 | ||||||
Average expected house price in 2020** $553,008 | ||||||
Position | Entry Level Salary Gross | Years to save for a 5% down-payment | Years to save for a 10% down-payment | |||
Accountant | $ | 44,500 | 8 | 13 | ||
Research Analyst | $ | 37,000 | 12 | 22 | ||
Mechanical Engineer | $ | 50,894 | 8 | 13 | ||
Paramedic | $ | 60,000 | 5 | 9 | ||
Network Administrator | $ | 44,527 | 7 | 12 | ||
Library Sciences | $ | 53,141 | 8 | 14 | ||
*Interest calculations were based on the assumptions of 5% gross annual income being put toward debt, with 3% annual interest rate, compounded annually. Occupational income was subjected to increases over time based on industry-specific factors.
** Costs were based on annual appreciation in house prices of 4.98%.
About RateSupermarket.ca (www.ratesupermarket.ca)
RateSupermarket.ca is the largest impartial rate comparison service for personal finance products in Canada. Founded in May of 2008, their easy-to-use comparison engine provides much needed transparency to the Canadian financial market and allows visitors to quickly find the best mortgage rates, credit cards, bank accounts, and GIC rates.
