My Financial Journal
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Thread: My Financial Journal

  1. #1
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    My Financial Journal

    I haven't been on the site too long, but I've learned a lot in the short time that I've been visiting it. I figured it's time to share our story and continue to learn.

    Profile:
    I'm 34, and my wife is 35, and we have a 2-year-old. We both live in the GTA and work full time. Our combined gross base salary is $140k. Bonuses may vary, so let's say a minimum of $10k, but the average the last 2 years was $25k.

    Assets
    Bank Accounts:
    Chequing - $7k (I typically don't keep this much in here and always move it to savings)
    Savings - $18k
    My TFSA Savings - $10k
    Her TFSA Savings - $10k

    Real Estate:
    Home - $390k purchase price (FWIW, builder selling for $570k nowadays)

    Mutual Fund Investments:
    My RRSP - $96k
    Her RRSP - $51k
    Son's RESP - $7k (maxing out govt contributions)

    Stock Portfolios (using today's prices):
    My Margin - BNS, MFC, BCE, PD, PWF, RCI, RY, SU, TRP - $26,656
    My TFSA - CWT-UN - $2,052
    Son's In Trust - XIC, XSP, XIN, XBB, CDZ, BMO - $8,481
    Wife's RRSP - PG, MCD - $4,719
    Mine/Wife's ESOP - $22k (I unloaded $16k of this last week. My wife and I work for the same company, so I feel uneasy having our jobs and a big chunk of $ tied to the same company)

    Most of the stocks are equally weighted within the portfolio. The stock portfolios have been somewhat a mishmash as I've been learning on the fly. I've tried to focus on dividend-paying stocks for the most part.

    Liabilities
    Mortgage - $150k

    Total assets - $638k (I included our house at purchase price and didn't include stuff such as cars or material possessions)
    Total liabilities - $150k

    Rough current expenses:
    Mortgage - $2200 (Put in ~$600 extra per month)
    Property tax - $420
    Utilities (incl TV, phone, internet) - $420
    Household (incl food, entertainment, toys, clothes, etc) - $400 (We don't buy much groceries cause we eat at our parents' houses since they look after our son after school)
    School/daycare - $600
    Car insurance/gas - $520
    Home/Life Insurance - $345

    Total - $4905

    That should more or less sum it up.

    Short/Medium Term Actions:
    - Have another kid within next year.
    - Start a spousal RRSP to try and equalize portfolio sizes.
    - Pay off mortgage within 5-6 years.
    - Might move to another house, which would likely be $150k more than current house.

    Questions for you wizards:
    - How can I optimize my stock portfolio? That is, with the income difference between my wife and I, should I transfer all stocks into her name?
    - Our son gets a lot of money from our extended family for Xmas and birthdays. He's currently got another $3k that I need to invest. I'm not sure what to do with it right now. I'm debating between just buying a few dividend stocks or just putting it more into the semi-couch potato that I've got going for him.
    - Any other recommendations on what to do?

    Last edited by SW20 MR2; 2012-02-15 at 09:26 PM.

  2. #2
    Senior Member Barwelle's Avatar
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    Just a technicality... if you're borrowing on margin, you should include what you owe for that in your liabilities.

    Unless you didn't include that in you assets?

  3. #3
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    It's technically a margin account, but I'm not borrowing anything.

    Quote Originally Posted by Barwelle View Post
    Just a technicality... if you're borrowing on margin, you should include what you owe for that in your liabilities.

    Unless you didn't include that in you assets?

  4. #4
    Senior Member Barwelle's Avatar
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    Ah, gotcha.

    Ignore me then!

  5. #5
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    I'm too inexperienced to offer trustworthy advice, but I do have a quick question. Why do you have money in savings when the TFSAs aren't maxed? Even if you need the money, you can at least increase the total value of them for the future by earning more interest now.

  6. #6
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    Good question. What I'm hoping for is that some of the advice/feedback given here will help with where this money goes. I haven't put money into TFSAs yet since I'm not sure whether I should pay down the mortgage, continue to buy stocks, etc. I'm also thinking about doing laser eye surgery as well.

    Quote Originally Posted by Koala View Post
    I'm too inexperienced to offer trustworthy advice, but I do have a quick question. Why do you have money in savings when the TFSAs aren't maxed? Even if you need the money, you can at least increase the total value of them for the future by earning more interest now.

  7. #7
    Senior Member the-royal-mail's Avatar
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    This is pretty good - not too much wrong here. Note that putting money in a TFSA has nothing to do with buying stocks. You may get into that for your TFSA if you like but lots of us just use the TFSA as a place to hold money for a while, it's readily accessible and you get 1% interest on the money. I am also wondering about your insurance and utilities costs. Those seem a bit high. Can they be reduced somehow?

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    I'm in the same boat for some of my TFSA contribution room this year. Some is invested/planned, but I have to figure out what to do with the rest. I look forward to hearing what you decide to do!

  9. #9
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    Quote Originally Posted by the-royal-mail View Post
    This is pretty good - not too much wrong here. Note that putting money in a TFSA has nothing to do with buying stocks. You may get into that for your TFSA if you like but lots of us just use the TFSA as a place to hold money for a while, it's readily accessible and you get 1% interest on the money.
    What I meant is that, I could've simply transferred the funds into my TFSA savings account in the interim. However, I didn't want to do the transfer in case I decided afterwards that I wanted to put it into my TFSA stock account instead. I'll figure out what to do with it first and then move the funds.

    I am also wondering about your insurance and utilities costs. Those seem a bit high. Can they be reduced somehow?
    Here's how it breaks down.

    Utilities (incl TV, phone, internet) - $420
    Cable TV - $55
    Internet - $31
    Home/Cell Phone - $93
    Electricity/Water - $121
    Natural Gas - $121

    Now that I think about it, the home/cell phone costs have gone up since we both got smartphones since I last did the monthly budget. It should be $161 for the phones.

    Home/Life Insurance - $345
    Home - $80
    Life - $265

  10. #10
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    Quote Originally Posted by SW20 MR2 View Post
    Questions for you wizards:
    - How can I optimize my stock portfolio? That is, with the income difference between my wife and I, should I transfer all stocks into her name?
    You don't actually tell us what the difference in income is, you only list combined income. Tough to know how beneficial this would actually be.

    In our household, we do precisely this. The high income earner pays all the bills and the low income earner invests/saves all their money. Be careful how you do this since gains on money gifted to your spouse for her to invest is still taxed in your hands.

    Quote Originally Posted by SW20 MR2 View Post
    - Our son gets a lot of money from our extended family for Xmas and birthdays.
    You could open a trust account for him, since you won't be able to invest directly under his name. We keep track of gifted money, but end up putting this into our own accounts. There is no point in a 3 year old having $3000 to his name. Perhaps you can use those funds to invest into his RESP rather than using your own.

    Quote Originally Posted by SW20 MR2 View Post
    Any other recommendations on what to do?
    I would step back and really take a look at your investments - it seems you have the time and knowledge to tackle a DIY ETF based portfolio and your combined assets are large enough to warrant this approach. I would recommend you consider your entire portfolio as a single unit, look at all the mutual funds, individual stocks, etc and determine if the breakdown is (i) low-fee, (ii) fitting of you risk tolerance/profile, (iii) capable of producing returns to meet your mid- to long-term goals.

    I personally wouldn't worry too much about your expenses - don't let them inflate much higher by lifestyle creep. If I understand correctly, your household takes in roughly $8000-$8500 monthly after tax. With expenses averaging $4900 - that means you are still saving 39-42% of your take-home pay, nothing to be shy about. Make sure you plan to meet your goals, and heck, if you are on target, make sure you take advantage of your efforts and have fun.

    Last edited by Sampson; 2012-02-16 at 01:05 AM.

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