two incomes become one income with two young kids , are the goals still achievable?
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Thread: two incomes become one income with two young kids , are the goals still achievable?

  1. #1
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    Oct 2012
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    two incomes become one income with two young kids , are the goals still achievable?

    Hi Everyone;

    I have been in this forum for a while and received lots of great advice for my questions on house and portfolio. I've really enjoyed reading the perspectives of others and would like to share our financial situation .
    Both wife and I are 42 years old and have a two and half year boy . the new baby is one the way in this summer . I am an engineer working for oil &gas upstream and earn around 170K per year (base salary and bonus) . my wife had a similar income but was laid off last winter.

    Assets
    residential property : $650K
    Cash/Savings: $170K
    Husband's registration account RRSP/TSFA/Company DC: $246K
    wife's registration account RRSP/TSFA: $255K
    Boy's RESP :$ 12K
    Two unregistered investment account : 160K
    holding company investment account : 247K
    rental 1 single house : 400K
    rental 2 Cando: 350K
    Manulife whole life insurance for husband and wife : 110K contributed ($1M coverage for two, needs another $ 110K in next 5 years to pay out )
    Total Assets: ~$2.78M

    Liabilities
    Mortgage for two rentals : $590K ( both renewed last year at Prime - 0.7$ interest rate)
    LOC : $100K ( two year term at 2.54% interest rate)
    Total Liabilities: $690K

    Net Worth: $2.06M

    all the assets were built within 12 years after we immigrated Canada thanks for oil booming .

    our long term goals to 55 years old retirement :
    a. build $3M retirement income pools : 1) $1-1.5M dividend stock pool ;2) $1M rental properties ;3) $1M whole life insurance
    b. support two kids to finish university ;

    three years short term goals:
    a. buy the third rental property;
    b. change to a bigger house(~$1M) in the community that has a great school ;
    c. use available $200K LOC fund to build a long term dividend income portfolio;

    all these goals were set up based on two incomes before .I am not certain if my wife can find a similar income job in late 2017 or 2018 in Oil &gas upstream industry . we are facing to reprioritize our goals and make them to be more realistic . we would like to listen any insight and advice on our situation . we will also keep update on our journey toward a comfortable retirement.
    we are all ears here now.


  2. #2
    Senior Member
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    You've done VERY WELL, so why not just slow down, re-adjust/lower your goals, take it easy


    I'm single-income and my wife home with 2 small children (4 & 2), no regrets on it vs. working & paying day care

  3. #3
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    Oct 2013
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    Edmonton
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    What do you get in rent (gross and net) for both rental properties? They seem kind of pricey. What do the finances look like on the third property? Have you run simulations on your finances if you had to drop rental rates 10, 20% in a down market? Or had one or two of them vacant for 3-6 months at a time?

    I assume you are in Calgary.

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  5. #4
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    Is your job secured? What is your plan if you lose it?

  6. #5
    Senior Member dubmac's Avatar
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    Quote Originally Posted by jerryhung View Post
    You've done VERY WELL, so why not just slow down, re-adjust/lower your goals, take it easy
    I'm single-income and my wife home with 2 small children (4 & 2), no regrets on it vs. working & paying day care
    I agree with this ^. When you have kids, time and energy are important

  7. #6
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    I agree we need to slow down and enjoy the life with young kids.
    regarding to the third rental , there is no visible property that generates positive cash flow. but we are willing
    to take a negative cash flow for a few years and wish win in a long run.
    my job will be secure in the foreseeable two years . hopefully the oil price can pick up again.
    take an advantage of the down market to build a passive income pool should be the main focus now. as the Motley fool suggested , we are in a buying mode now and should be happy if everything is on sale.

  8. #7
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    Oct 2012
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    Journey on FIRE

    Hi CMFs;

    I have been spent almost one year for studying finance and investment . I have learned many great ideas from this Forum and lots blogs .
    I think I am on the journey with a more solid plan and would like to share and learn from all of you . here is my new financial status and goals :

    as May 1st 2017, new financial status
    Assets
    residential property : $650K
    Cash/Savings: $57K
    Husband's registration account RRSP/TSFA/Company DC: $346K
    wife's registration account RRSP/LIRA/TSFA: $334K
    Family RESP :$ 24K
    other family TSFA : $80K
    joint investment account : $553K
    holding company investment account : $348K
    Lending Loop : $30.2K
    private company investment :$50k ( the value is very likely to be zero)
    rental 1 single house : $400K
    rental 2 Cando: $350K
    Manulife whole life insurance for husband and wife : 138K contributed ($1M coverage for two, needs another $ 90K in next 4 years to pay out )

    Total Assets: ~$3.45M

    Liabilities
    Mortgage for two rentals : $571K ( both renewed 2015 at Prime - 0.7$ interest rate)
    LOC : $352K (HLOC for investment)
    Total Liabilities: $923K

    Net Worth: $2.48M


    our long term goals to 55 years old retirement by 2029 :
    a. build $4M retirement income pools : 1) $2M dividend stock & Couch potato portfolio ;2) $1M rental properties ;3) $1M whole life insurance
    b. support two kids to finish university ;

    short term action items:
    1) learn and practice to generate income for option trade including naked put and covered calls
    2) consolidate dividend stock and Couch potato portfolio : diversify is the key
    3) gain knowledge and improve on tax efficiency
    4) Build a will

  9. #8
    Senior Member
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    Apr 2009
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    Congrats for your current progress.

    Will should be number 1 on your prioriry list, examply to specify who will take care of your children should something happens.

    Do you max out RESP $2,500 per year per child? Are there previous years you did not max out? You say you have 2 children and want to support them to finish University.

    What do you mean by "family TFSA" ? A TFSA is an individual account, it's either yours or your wife.

    For the 352 k$ LOC, which investments is related to that line of credit? Is it the joint investment account?

  10. #9
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    Quote Originally Posted by Walksing View Post
    Hi Everyone;

    Total Assets: ~$2.78M
    Both wife and I are 42 years old and have a two and half year boy . the new baby is one the way in this summer .
    Wow, congratulations on an amazing net worth at 42.

    You are going to need to retire at 55 if your kids are as active at mine! My 10 year old plays rep softball 5 days a week. I'm exhausted and am only 37, I can't imagine doing it at 52!

    Keep up the great wealth building, you look to be pretty set.

    Cheers

  11. #10
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    Quote Originally Posted by cashinstinct View Post
    Congrats for your current progress.

    Will should be number 1 on your prioriry list, examply to specify who will take care of your children should something happens.

    Do you max out RESP $2,500 per year per child? Are there previous years you did not max out? You say you have 2 children and want to support them to finish University.

    What do you mean by "family TFSA" ? A TFSA is an individual account, it's either yours or your wife.

    For the 352 k$ LOC, which investments is related to that line of credit? Is it the joint investment account?
    yes, my wife is working on the will now ;
    our kids are young, we max out RESP on the first day every year ;
    Family TFSA has two accounts , each one has roughly $40K
    $352K LOC is for the joint unregistered account we have recently consolidated . the borrowing cost is tax deductible


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