Life - Act III: Working for Money - Page 3
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Thread: Life - Act III: Working for Money

  1. #21
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    haha - thanks guys. I'm not too worried. Even if Fort Mac is messing me up somehow, I'm not gonna be here forever!


  2. #22
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    Quote Originally Posted by peterk View Post
    August 2013

    Core Expenses

    Rent (all in): $900
    How are you living for $900? Are you sharing a basement suite with 8 other people? I live in Fort McMurray too.

  3. #23
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    September 2013

    Big update since August: 3 pay cheques, $1900 quarterly bonus, 10 hours overtime, and about $1500 market gains

    Assets

    Stocks - $23,300
    ---TFSA: $10,800
    ---RRSP: $12,500

    Cash - $21,350
    ---TFSA: $12,500
    ---Savings: $8,850


    It appears I'm building up quite a cash hoard that I'm not sure what to do with. I may be looking at buying a house in the next couple years but I also may not. It'll depend on career decisions that are unpredictable at this early stage, relationship decisions that are up in the air, and the housing market. I've pretty much decided that I'll be renting until at least spring 2015 (when my retention contract is up and when I'll have a big enough down payment).

    I'm leaning towards keeping an asset allocation as if I'm not planning on buying a house and not worrying about it. This would mean mostly stocks, with a reasonable cash pile for emergencies and/or investing opportunities. I'm not sure what reasonable is at this point. I think having 20k cash seems OK...

    Liabilities

    Zero - Or is it? I have some stipulations on the signing bonus and the rental subsidy that I received that would require me to pay back many thousands of dollars to my company if I were to terminate employement today. I have every intention of fulfilling the vesting periods of these monies.

    Do you guys think this should this be considered a liability in a net worth calculation?

    Net Worth

    $44,650


    Income

    $6350 after tax monthly

    After 6 months employement my company matched savings plan kicked in. Gives me an extra ~$60 net each month.


    Expenses

    Non-essential expenses in September included new shoes, new winter coat, new clothes, and a trip to Edmonton.

    September Spending --- $2238
    August Spending --- $1907
    6-month moving average --- $2724
    Last edited by peterk; 2013-09-26 at 01:05 PM.

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  5. #24
    Senior Member Jon_Snow's Avatar
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    Pretty damn good... Not sure you will be retiring at 35 though.
    (You are the guy that mentioned ER at 35, right?)

  6. #25
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    Hopefully Jon! My goal is more to be financially independent by mid 30s. I could always work until 40-45 I suppose if my lifestyle isn't too constricted by a job and I want more money for fancy things.

    At age 36 I come up with a net worth of $800k @ 3% raise, 3% returns and increased spending $500/month. $1.2m @ 5% raise, 9% returns and current spending levels.

    There's of course a decent chance I'll change jobs between now and then for a lower salary and things may get set back by a couple years.

    I'm also in the brainstorming & learning phase of building up some online income. At the end of my engineering career I hope to have something in place where I can work part time on a computer to make an extra 1-2k monthly and supplement investment income.

    Working a leisurely 10-20 hours/week from a home office is the end game. Half the year in a cool Canadian city like Montreal, Halifax, Kelowna, or Vancouver - Half the year in some interesting southern destination. Buenos Aires, Lima, Christchurch, Bangkok, or maybe the Mediterranean. (working on getting my European passport)


    Well, now I've gone and spilled the beans on "the dream" haha.

  7. #26
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    Quote Originally Posted by peterk View Post
    At age 36 I come up with a net worth of $800k @ 3% raise, 3% returns and increased spending $500/month. $1.2m @ 5% raise, 9% returns and current spending levels.
    Pro-tip:

    Do your projections in today's dollars, to take future inflation out of the equation. To calculate future NW in today's dollars, use real rates of return and real (above inflation) raises.

    3-4% real return is a good assumption. 9% is not, unless you think you are the next Buffett.

    3% raise = 1% real, if inflation runs at 2%.

  8. #27
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    Quote Originally Posted by GoldStone View Post
    Do your projections in today's dollars, to take future inflation out of the equation.
    +1!

    Makes things much easier.
    Mike Holman
    Hidden Content Investing and Personal Finance

  9. #28
    Senior Member My Own Advisor's Avatar
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    If you get 9% returns, I want your KoolAid

    Seriously, well done and killer savings rate peterk.

    Just remember, planning is good but don't forget to live. You're only young once.
    Hidden Content - Saving and investing my way to a million dollar portfolio.

  10. #29
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    Thanks for the tip!

    How do you determine what inflation is? CPI? real world inflation? personal inflation? What if I move cities or countries where it's cheaper or more expensive? What if canadian housing is at the top of a bubble and these highs won't be reached again for another 40 years until all the boomers are dead and gone and the world economy picks up again? Seems all too nebulous for me to properly predict...

    MOA - due to my excessive indecision & jackassery in university, I'm 3 years behind all my same-age peers career-wise. This period of intense savings and working in the boonies is somewhat of a self inflicted punishment and an attempt at playing catch-up.

    "not forgetting to live" in Fort Mac would involve paying $2500+ rent, buying a 40k truck, 3-4 apple devices, and $7 beers on the weekend. I don't see the bang-for-buck of doing this while living here, and have resigned myself to being reserved in my spending/"living" for the time being.

    Not to worry though, heading home for 3 weeks at Christmas with a side trip to NYC. Planning a 3-4 week Asia trip in the winter, 1 week in the rockies next summer, and 2-3 weeks in Europe next fall. Life ain't so bad

  11. #30
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    Quote Originally Posted by peterk View Post
    How do you determine what inflation is? CPI? real world inflation? personal inflation? What if I move cities or countries where it's cheaper or more expensive? What if canadian housing is at the top of a bubble and these highs won't be reached again for another 40 years until all the boomers are dead and gone and the world economy picks up again? Seems all too nebulous for me to properly predict...
    This is precisely why you should do your NW projections in today's dollars, using real rates of return. This method takes future inflation out of the picture. You don't have to define what inflation is. You don't have to guess the rate. It doesn't enter the calculations in any way.

    You might ask: how do we know future real rates of return?

    While we can't know future returns in advance, the estimates of expected ranges are widely available. For example, see this article on Bogleheads wiki:

    http://www.bogleheads.org/wiki/Histo...pected_returns


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