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



## Walksing (Oct 16, 2012)

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.


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## jerryhung (Mar 28, 2011)

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


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## nobleea (Oct 11, 2013)

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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## scorpion_ca (Nov 3, 2014)

Is your job secured? What is your plan if you lose it?


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## dubmac (Jan 9, 2011)

jerryhung said:


> 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


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## Walksing (Oct 16, 2012)

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.


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## Walksing (Oct 16, 2012)

*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


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## cashinstinct (Apr 4, 2009)

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?


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## Steve Divi (Jul 14, 2016)

Walksing said:


> 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


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## Walksing (Oct 16, 2012)

cashinstinct said:


> 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.
> 
> ...


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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## Walksing (Oct 16, 2012)

I am worry about I could not have a good shape for keeping up with them. but really enjoy in companying with them at every moment


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## My Own Advisor (Sep 24, 2012)

Walksing,

You and your wife are doing VERY WELL financially. 

Personally, I'd focus on the debt from here on out. You never know what might happen to your high income, human capital, other. Hopefully nothing of course!

Once your liabilities are gone in the coming years, you will have more than "enough" to fund your dreams and if you get really bored, you can always consult/work part-time as you please.

Keep up the good asset building. Impressive to say the least.


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## Walksing (Oct 16, 2012)

My Own Advisor said:


> Walksing,
> 
> You and your wife are doing VERY WELL financially.
> 
> ...


thank you ! your blog is on my must-read list. I agree I will be working on debt reduction or consolidation .


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## Walksing (Oct 16, 2012)

2017 monthly update #1
April 30, 2017 
Passive income from investment account :

Dividends & Interests received in April : $2755
Option trade income ( expired or close out in April) :$3448


Year Total passive income from investment accounts:

2016 $25146
2017 $24988
2018 
2019 
2020 


working toward to consolidate investment portfolios: 
diversify dividend growth investment and & indexing


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## cashinstinct (Apr 4, 2009)

Walksing said:


> 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


Good stuff ! I would simply be sure not to call a TFSA "family" because it's an individual account.

For the LOC, as long you keep adequate documentation showing the inflows/outflows of funds tha tthe LOC is only used for unregistered investments, it should stay deductable. One issue is if an investment has return of capital (ROC), which can be messy.


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## nobleea (Oct 11, 2013)

What kind of rent are you getting on the condo and house? Given the size of the mortgage, and the fact the condo will have condo fees, are you cash flowing any reasonable amount?
Selling them and investing the proceeds could easily get you $750 cash flow per month which I suspect is more than you are cashflowing from both properties. Combined with the potential for long term appreciation in equities vs the likely stagnation or drop in home values, and no risk of having to renew mortgages at 1-4% higher interest rates....


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## Walksing (Oct 16, 2012)

Hi nobleea, we don't have free cash flow since we dropped the rent last May 2016 . selling and investing the proceeds ( maximum ~$120K after all the sell cost) is hard to generate $750 by my calculation. we dropped the plan to buy another rental property due to the facts you pointed out. the current plan is hold the property for now mainly for investment diversify and tax efficiency .


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## gibor365 (Apr 1, 2011)

> Manulife whole life insurance for husband and wife : 138K contributed ($1M coverage for two, needs another $ 90K in next 4 years to pay out )


 Curious what is it?


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## Walksing (Oct 16, 2012)

Manulife whole life insurance is Performax Gold policy that we bought in 2011. one of the features of this policy is to get the bank loan against the policy as the retirement income. 
it is not very popular, "most investment guru" suggest buy "term" rather than "whole life.


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## gibor365 (Apr 1, 2011)

Walksing said:


> Manulife whole life insurance is Performax Gold policy that we bought in 2011. one of the features of this policy is to get the bank loan against the policy as the retirement income.
> it is not very popular, "most investment guru" suggest buy "term" rather than "whole life.


Still don't get it...but I wouldn't never buy anything voluntary from any insurance company, all of them cheaters


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## Walksing (Oct 16, 2012)

2017 monthly update #2
May 31, 2017 
Passive income from investment accounts :

Dividends & Interests received in May : $2278
Option trade income ( expired or close out in May) :$4223


Year Total passive income from investment accounts:

2016 $25146
2017 $31457
2018 
2019 
2020 

net worth is flat due to big market drop in our Chinese stock investment .
option outcome is expected to be poor or negative in June ,2017 .


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## Walksing (Oct 16, 2012)

half year summary on July 1st 2017:
Total Assets $3441595 +3.43% since Jan 1st 2017
Liabilities: $919303 -1.25% since Jan 1st 2017 
Net worth: $2472292 +5.35% since Jan 1st 2017 
Cash $61559 -6.31% since Jan 1st 2017 
liquid investment: $1730067 +7.61% since Jan 1st 2017

*2017 monthly update #3
*June 30, 2017 
Passive income from investment accounts :

Dividends & Interests received in June : $5208
Option trade income ( expired or close out in June) :$1822


Year Total passive income from investment accounts:

2016 $25146
2017 $38486
2018 
2019 
2020 

Monthly dividend reached new high , but total value of investment is slight lower than last month .


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## Walksing (Oct 16, 2012)

*2017 monthly update #4*
July 31, 2017 
Passive income from investment accounts :

Dividends & Interests received in June : $3038
Option trade income ( expired or close out in July) :$6558


Year Total passive income from investment accounts:

2016 $25146
2017 $48059
2018 
2019 
2020 

Monthly option trade income had reached a new high. put options BZUN ,TD, VRX were running well for July. August will be a challenge month for option since a couple of put options are ITM now .


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## Walksing (Oct 16, 2012)

Hi CMFs;
Happy 2020! Three years to learn and improve our financial situation. 
Great learning and lots of mistakes during the journey. 

Here is the financial status as Dec 31,2019. 

Assets

residential property: $650K
Cash/Savings: $83K 
Husband's registration account RRSP/TSFA/Company DC: $524K
wife's registration account RRSP/LIRA/TSFA: $382K
Family RESP: $ 46K
joint investment account: $500K
holding company investment account: $507K 
Lending Loop: $3.4
private company investment: $50k (likely to be zero by end of 2020)
rental 1 single house: $360K
rental 2 Cando: $260K
Manulife whole life insurance for husband and wife: 192K contributed ($1M coverage for two, 2020 is the last payment)
Total Assets: ~$3.70M

Liabilities
Mortgage for two rentals: $444K (both need renew in 2020)
LOC: $151K (HLOC for investment) 
Total Liabilities: $595K

Net Worth: $3.1M

Goals to achieve: 55 years old retirement by 2029, aim to 2024 for semi retire.

Aim to $1M pool for registered accounts by 2021 
Investment: keep simple – 60% Couch potato portfolio and 40% motley fool picks
Option trade: trade small – aim to achieve $2500 per month
Pay out all debit by end of 2024


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## scorpion_ca (Nov 3, 2014)

I heard recently that you would pay more taxes if your RRSP value is greater than $500k during retirement/withdrawals stage. You can check with your Financial Planner about it.

Your salary was $170k in 2016. Would you mind to share it your present salary as you are in the O&G industry?


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## Retiredguy (Jul 24, 2013)

scorpion_ca said:


> I heard recently that you would pay more taxes if your RRSP value is greater than $500k during retirement/withdrawals stage. You can check with your Financial Planner about it.
> 
> Your salary was $170k in 2016. Would you mind to share it your present salary as you are in the O&G industry?



"I heard recently..." Your post adds nothing but creates a rumour. Not helpful. If you have a source post it.


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## scorpion_ca (Nov 3, 2014)

Retiredguy said:


> "I heard recently..." Your post adds nothing but creates a rumour. Not helpful. If you have a source post it.


I heard it from a person of a personal finance group in our city. That's why, I mentioned to check with the financial planner. They will do an analysis for you. 

I will find out more about it once my RRSP reach to $500k.


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## Walksing (Oct 16, 2012)

Last year 2019 total income was 200+ k. It is not so impressive at my age in o&g industry


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## Walksing (Oct 16, 2012)

Rrsp sweet point definitely needs a good plan.


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## scorpion_ca (Nov 3, 2014)

Walksing said:


> Last year 2019 total income was 200+ k. It is not so impressive at my age in o&g industry


Thanks. What's your role...process, mechanical or PM discipline? I have seen contractor makes around $280k to $300k in the O&G industry but at the same time lots of people lost their jobs too.


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## Walksing (Oct 16, 2012)

Hi CMFs;
Happy 2021! The year 2020 was unlike any other. Certainly, within my lifetime, this past year was the most disruptive. Fortunately, family and friends are doing well so far, we can all look to a better and brighter future in that respect.
Great learning and lots mistakes during the journey. We like the idea from "my own advisor" - financial independence and working on your own terms, our long-term goals to 55 years old retirement by 2029, aim to 2024 for semi retire.

Here is the financial status as Dec 31,2020.
Assets
residential property: $650K
Cash/Savings: $49.6K
Husband's registration account RRSP/TSFA/Company DC: $725K
wife's registration account RRSP/LIRA/TSFA: $505K
wife’s margin account $383K (newly established in Dec 2020)
Family RESP: $ 85.6K
joint investment account: $386K
holding company investment account: $799K
Lending Loop: $16.8K ( gradually withdrawing all the money now) 
private company investment: $50k (very likely to be zero during 2021)
rental 1 single house: $0 (sold in 2020 Dec)
rental 2 Condo: $260K
Manulife whole life insurance for husband and wife: 213K contributed ($1M coverage for two, 2020 was the last payment as planed, it might extend the payment in 2021)
Total Assets: ~$4.2M
Liabilities
Mortgage for two rentals: $0 (paid out in 2020)
LOC: $196K (HLOC for investment)
Total Liabilities: $196K
Net Worth: $3.99M

Goals for 2021:
Let time be your friend, patiently grow wealth with it
Sell the Condo when tenants moving out
Investment: keep simple – CAD index ETFs and US Spy, QQQ etfs and motley fool picks
Option trade: trade small and trade often – aim to US$6000 per month (it roughly covers whole family spending)
Managing net debt ~$200K and enjoying the low interest rate


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## milhouse (Nov 16, 2016)

Fantastic numbers. Any background on why you are selling the condo?


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## Walksing (Oct 16, 2012)

milhouse said:


> Fantastic numbers. Any background on why you are selling the condo?


too much headache on special assessment, buying REIT is better than owning the properties in Calgary.
BTW, milhouse, enjoy reading your journey on retirement, will be a great model for our plan


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## milhouse (Nov 16, 2016)

I can kind of understand the special assessment issues. The inlaws own a low-rise condo unit as a rental property in a pretty old building but the misses ends up helping deal up various issues who ends up venting to me. lol 
It's strata council hell trying to get agreement on what to fix. They're just patching at this point and trying to determine if it might be better to see if they can sell the entire property to a developer to build a high rise building.


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## Walksing (Oct 16, 2012)

Hi CMFs;
Glad to see we are on the way back to our normal life! Kids are very happy to play with their friends!

Here is the financial status as July 1st,2021.
Assets
residential property: $650K
Cash/Savings: $36K
Husband's registration account RRSP/TSFA/Company DC: $869K
wife's registration account RRSP/LIRA/TSFA: $571.6K
wife’s margin account $474K
Family RESP for kids ( age 7 & 4): $ 102.5K
joint investment account: $433K
holding company investment account: $912K
Lending Loop: $11.6K
private company investment: $50k (very likely to be zero during 2021)
rental 1 single house: $0 (sold)
rental 2 Condo: $260K (on the market for sale now)
Manulife whole life insurance for husband and wife: 233K contributed ($1M coverage for two, done the last payment in 2021)
Total Assets: ~$4.68M
Liabilities
LOC: $188K (HLOC for investment, renewed in June )
Total Liabilities: $188K
Net Worth: $4.49M

Updated Goals for 2021
Let time be your friend, patiently grow wealth with it - on track
Sell the Condo when Tenants moving out – on track
Investment: keep simple – CAD index ETFs and US Spy, QQQ ETFs and motley fool picks – on track
Option trade: trade small and trade often – aim to $6000 per month (realized ~$9000/month to date for 2021)
Managing net debt ~$200K and enjoying the low interest rate - on track
Move into a bigger house before May 2022 – new goal/on track


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