Our wealth goals, journey, and targets - Page 3
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Thread: Our wealth goals, journey, and targets

  1. #21
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    June 2014 Update

    Before you know it, May is over. Another solid month. We now have our daughter's RESP account set up and funded. Has about $1500 so far, should be around $3500 by the end of the year. Speaking of which, I thought it would be time for an update on our goals for the year.

    Net worth over 725K by the end of the calendar year No problem reaching this. Should be closer to 775K
    Paid off mortgage (fixed portion) in SeptemberOn track for payoff Sep 4.
    Purchased lot for subdivision and residential infill by end of calendar year Found our lot (across the street), have to agree on a price.
    Take at least one month off in parental leave and possibly travel a bit with the new family. Booked for 5 weeks. Heading to Maui for 3 weeks in Nov.
    Replace my car with something bigger, safer. Doesn't look like we'll have saved up for this until late January 2015
    Open TFSA's for both of us. I can certainly *open* the TFSA's, but won't be able to fund them this year. But I guess the goal was open the account, so that's doable.
    Open RESP for the new addition and start contributing immediately enough to get full CESG. Opened, will have full amount for sure.
    Increase XIRR on non-reg portfolio from current 2.7% to 7% XIRR has increased to 5.3%. I think 7% is achievable, though it's out of my hands.

    I sent some unsolicited offers to purchase some lots we like in the neighbourhood this month. The one we like the most got back to me and is interested in selling. An unorthodox approach, but seems to have worked. Older couple that has it as a rental. We'll see if we can nail down a price and then we would take over the renters til their lease is up. Designing and building my own home (not me actually building it of course) has been a dream of mine since I've been 13 or 14. If we do go ahead, I would use our HELOC as downpayment, and then mortgage the remaining 50% of it since it'll be a tear down. Buying the new place was in the plans, but with no exact date, so it may throw off some of our repayment plans and schedules. I want to leave some room on the LOC for rezoning fees, design costs, etc, though I guess there would be some rental income in there as well.

    Assets:

    House - $458,000 (N/C Keeping it constant for the next year)
    SUV - $24,025 (-0.7%)
    Car - $2,000 (-3.6%)
    Non-Registered Portfolio - $75,544 (+6.2%)
    Work RRSP (mine) - $140,337 (+5.7%)
    Pension (wife) - $47,500 (N/C she's on EI, not contributing)
    Wife RRSP - $15,500 (N/C)
    TFSA's - $0 (N/C)
    Cash - $3105 (-45%)
    Miscellaneous assets - $20,700 (N/C)

    Total Assets $788,191

    Liabilities:


    House mortgage - $33,240 (-26%)
    HELOC - $77,662 (-10.2%)
    SUV Loan - $6,075 (-13%)
    Credit cards - $4,276 (this is not a balance, but the amount due. we pay off every month, but a true snapshot must include this)

    Total Liabilities $121,253

    Net Worth: $665,358 (+4.3%, +$27,239 month over month, +42% year over year)


  2. #22
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    Quote Originally Posted by nobleea View Post
    I sent some unsolicited offers to purchase some lots we like in the neighbourhood this month. The one we like the most got back to me and is interested in selling. An unorthodox approach, but seems to have worked. Older couple that has it as a rental. We'll see if we can nail down a price and then we would take over the renters til their lease is up.
    They got back to me on Sunday. We met for coffee today and nailed down a price, terms and possession. It's much less stressful without a realtor. Certainly dealing with someone who views the house as an investment makes it easier. They're much less emotionally attached to the property and can be objective about it. Possession in mid-Aug. There's renters in place, but they're month to month. I hope they are willing to stay until Mar 2015. If not, maybe I will try and find someone else. Will stop by the lawyers over the next week to formalize the deal. The price we agreed to was less than I was expecting to pay and about what they expected to receive, so everyone's happy.

  3. #23
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    "The price we agreed to was less than I was expecting to pay and about what they expected to receive, so everyone's happy."

    Sounds like congrats are in order!

    Well done with killing the debt nobleea. Your assets (outside home value) are great as well. You should be a millionaire (in terms of net worth) within a couple of years.

    I haven't calculated our NW in some time...I'm more focused on killing the debt by X amount and contributing to my RRSP and non-reg. portfolio by Y amount - but the outcome of both of those things will be a higher NW for sure.

    Keep up the great work!
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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  5. #24
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    Thanks! Definitely focusing on the debt (as you are doing as well) and the rest takes care of itself. Living well below your means certainly helps too. Not that our lifestyle is terribly low, but our means are much higher.

    I estimate we'll be passing the 1mil NW sometime around Aug-Sep 2016. Depends on what happens with this house of course.

  6. #25
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    July 2014 Update

    This month, the contract was signed for the new place. You will see the deposit amount for the current value of the new house. It's in trust with the lawyers. We take possession middle of August. I've been doing some casual shopping around with some builders, and I'm fairly confident we'll be able to get what we want for the price I had in mind. When all is said and done and our old house is sold, I hope to be left with a mortgage on the new place of $350K or less. I've been working on some plans (it is my intention to design the house myself), but it will probably take 3 months until we've got something to share with a builder. On the networth side, didn't make a whole lot of progress. I believe some of that was due to the CAD$ which surged a bit. We'll make up for it next month, I promise. We still plan on paying the mortgage off on the first house in September, though we'll have a second house and new mortgage to show for it.

    Assets:

    House - $458,000 (N/C Keeping it constant for the next year)
    New house lot - $10,000 (deposit amount)
    SUV - $23,850 (-0.7%)
    Car - $1,925 (-3.9%)
    Non-Registered Portfolio - $30,644 (-60%)
    Work RRSP (mine) - $139,021 (-0.9%)
    Pension (wife) - $47,500 (N/C she's on EI, not contributing)
    Wife RRSP - $15,500 (N/C)
    TFSA's - $0 (N/C)
    Cash - $3322 (+7%)
    Miscellaneous assets - $20,700 (N/C)

    Total Assets $751,633

    Liabilities:

    House mortgage - $28,644 (-14%)
    HELOC - $43,282 (-44%)
    SUV Loan - $5,200 (-14%)
    Credit cards - $3,205 (this is not a balance, but the amount due. we pay off every month, but a true snapshot must include this)

    Total Liabilities $80,349


    Net Worth: $669,983 (+0.7%, +$4,625 month over month, +41% year over year)

  7. #26
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    August 2014 Update

    Not a whole lot to report this month. We just got back from a 1wk trip to California for a wedding and our first trip with the little one. Most expenses were already prepaid. We go to the lawyers on monday to sign the paperwork for the new house/teardown. Take posession next Thursday. Have to get insurance worked out today on the new house. Wife worked her 2.5 weeks of summer school in July, we lost a couple weeks of maternity EI because of it, but the pay more than makes up for it. She's now on parental leave for EI. Made some good progress on paying down the mortgage. The current one will be paid off on Sep 12th, though unfortunately we'll have a new mortgage to show for it by then. The appraisal on the new place came in fine dollar wise, though they estimated the house had 20yr economic life left, so the bank would only allow a 20yr or shorter ammortization. So be it. Went 2yrs fixed at 2.54% which seems to be reasonably competitive for a big bank rate in Alberta. Through our main bank, so that's nice. That term should be up for renewal roughly when the new house will be completed.

    Assets:

    House - $458,000 (N/C Keeping it constant for the next year)
    New house lot - $10,000 (deposit amount)
    SUV - $23,500 (-0.7%)
    Car - $1,900 (-1.3%)
    Non-Registered Portfolio - $29,452 (-4%)
    Work RRSP (mine) - $138,533 (-0.4%)
    Pension (wife) - $47,500 (N/C she's on EI, not contributing)
    Wife RRSP - $15,500 (N/C)
    TFSA's - $0 (N/C)
    Cash - $1,037 (-68%)
    Miscellaneous assets - $20,700 (N/C)

    Total Assets $747,499

    Liabilities:

    House mortgage - $13,886 (-52%)
    HELOC - $43,211 (-0.2%)
    SUV Loan - $4,325 (-20%)
    Credit cards - $3,835 (this is not a balance, but the amount due. we pay off every month, but a true snapshot must include this)

    Total Liabilities $65,527

    Net Worth: $680,940 (+1.6%, +$10,957 month over month, +39% year over year)

  8. #27
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    Apr 2009
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    Congrats for everything !

    Considering your high incomes and potential retirement income, TFSA should be the next step in your plan.

    For example, do you have lots of unrealized gains or losses on your non-reg porfolio? You could transfer the positions to a TFSA account if they have small gains (or sell positions and transfer $$$ if they have losses).

    I did this recently when I realized the $$$ I had to contribute to my TFSA was in my non-reg investments.

  9. #28
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    Quote Originally Posted by cashinstinct View Post
    Congrats for everything !

    Considering your high incomes and potential retirement income, TFSA should be the next step in your plan.

    For example, do you have lots of unrealized gains or losses on your non-reg porfolio? You could transfer the positions to a TFSA account if they have small gains (or sell positions and transfer $$$ if they have losses).

    I did this recently when I realized the $$$ I had to contribute to my TFSA was in my non-reg investments.
    Yes, I certainly want to get the TFSA going. Our non-registered investments are leveraged, so donating in kind (or selling and donating) would lose the tax deductibility of the investment loan, so that would be repaid first, leaving nothing to transfer.

    It is hard to decide how much should go to invest and how much to debt repayment. The last 5 years we have focused on paying off the mortgage with all free cash going towards that. So now it's sort of become habit to want to pay down debt. With a new house coming up, that will be a new mortgage to pay down as well. I think we will set the new mortgage up to pay off in 10 years, and any spare cash after that will go to TFSA first, then after that get split between RRSP/non-reg and spending. We'll have 62K of unused TFSA room starting in 2015 so that should take us a couple years to fill up.

    I've always thought that debt pay down is good as it's after tax dollars. Our mortgage rate is low and would equate to a before tax return of 3.5%. Guaranteed, that's not bad. Any other investment is pre tax (even RRSP, which is tax deferred). I'm of the opinion that our RRSP's will likely be comfortable (combined with wife's DB pension) and we may get in to an issue with larger mandatory withdrawals than wanted (and thus higher taxes). So it makes sense to max out the TFSA through the years and non-reg after that.

  10. #29
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    I understand your position on your non-reg portfolio. Your loan would not be tax deductable if investments are in TFSA... I am not sure it should be a "show stopper" to consider the transfer or not. You could repay the loan like you will do with the mortgage.

    It makes sense to max out TFSA first in your current situation with cashflow left after paying mortgage. It depends how soon you want to fill up the TFSA.

    Either way, being able to save this much is a good problem to have

  11. #30
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    For example, over the next 2 years, we'll have a decent balance on the LOC for new house expenses (downpayment, design fees, some construction, etc). The rate for the forseeable future is 3.5%. Putting cash flow against that would be a guaranteed 3.5% after tax return.
    Putting cash flow in a TFSA would probably get 5.5% return including dividends but not guaranteed. Since it's tax free on the way out, that would also be an after tax return. If one expects the market to correct at some point short term, then the debt paydown seems smarter. I don't see the point in using the TFSA as a bank account to save money. It should be for investing.


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