Late Starter...Help me with a Plan

[steve41]

What is the likelihood of the mortgage rate staying at 4% for 25 years?

You could say that about the 3% market as well. I could adjust the 2 rates upwards at some future time, but didn't.

[Sampson]

Now that I look back at it, you have 1% real returns going forward? You must be a bigger bear than some of the famous CMF bears.

[steve41]

Now that I look back at it, you have 1% real returns going forward? You must be a bigger bear than some of the famous CMF bears.

Also, you might guess (correctly) that I am not in the 'biz'. (Except for the s/w biz, of course)

[Soils4Peace]

Is there an options market for your company shares? You could
Write covere calls on them till they finally get called away.

[lonewolf]

I would start with the money management of your budget.

Liz Weston recomends 50/30/20 budget, but also recomends starting to save as soon as possible.


50% of after tax money on Needs the things you need to spend money on or else you end up in the grave i.e., food, shelter, clothing & transportation for job. ( shelter can be anything from a card board box to a castle)

30% of your after tax income for having fun i.e., entertainment , vacation etc

20% of your after tax income for saving & investing


By only having 50% of after tax income for needs it allows you to take money from income for having fun & put it to needs & savings if salary should drop. If salary drops to much I would reduce percentage of money for having fun.

The most important thing is to save @ least 20% of your income. You will most likely be miles ahead of someone that chases after large returns but saves very little.

Best

[kcowan]

In Vancouver, the average family has to commit 84% of their family income to shelter for the average SFH. Add in the other needs and the total reaches well above 110%.

Yes the insanity continues...

[snowbird]

Thanks to everyone for your inputs. I am doing a lot of reading, revising my plans and adjusting accordingly.

I have 2 quick questions

- if i were to transfer the RRSP Balance invested in a Canadian equity MF to a different investment vehicle (say an ETF) at a loss, would i be able to claim a capital loss and then apply this to potential capital gains from selling my shares in the company i work for?
- how does one buy a US holding in an RRSP since contributions are in CAD?. I was thinking of buying VTI or some other US exposure from the proceeds of the MF

Thanks so much for your time.

[Spudd]

1) RRSP's are tax-sheltered, that means that neither capital gains nor capital losses apply within an RRSP. So if you change investments at a loss, there's no paperwork involved. You also can't use a capital loss in an RRSP to counteract a capital gain outside an RRSP.

2) Your broker will convert the currency for you when you buy a US issue in your RRSP. The exchange fee can be somewhat high, so if you're planning to do it with a large amount of money it can be worth looking into something called "Norbert's Gambit". I won't get into the details because I think it varies by broker and stuff, but if you Google it or search this board you should be able to find information.

[snowbird]

Thanks for the feedback guys.
So far so good...RRSP maxed for 2011. TFSA funds set aside for 2013. Next - cancel debt

I am wondering if i should cancel my credit cards and or/line of credit.

Line of credit $5,000@ 7%....current balance is $2K, to be paid off by Aug 31
2 CCs, each with $4K limit...current combined balance is $800 on both...to be paid off by end of Aug.

Once these are paid off, i will only have mortgage debt. I want to pay for everything using cash and i really don't need any credit.

So, do you think i should close these accounts or keep them or ask for smaller credit limits. What are the implications of closing them on credit score, etc

[mind_business]

Not sure why you're wanting to reduce CC's, and close your LOC??? Aside from a large mortgage, hard to avoid in Calgary, you don't seem to have a problem with debt control. Used responsibly, a LOC and CC's are very useful.

If you don't mind me asking, what is your goal with your mortgage? Are you content with minimum payments, or do you have a plan to actively pay it off with larger payments? How long does your plan require to pay it off completely?