# Kicking it up a notch - My Story



## Kumar (Dec 28, 2013)

I am 34 and my wife is 34. We've one 4 year old son. We are still deciding if we want to have another child or not.

Combined Income: $75000 per year after all the deductions.

Assets:
House: $575K
My RRSP: $68K ($12K VIG ETF and rest split equally amongst TD Canadian Index, TD US Index, and TD International Index e-series funds)
My TFSA: $16K ($10K XRE ETF and rest split equally amongst 3 e-series funds mentioned above)
Her RRSP: $13K (Equal allocations of same 3 e-series funds).
Her TFSA: $0
RESP: $9K (Equal allocations of same 3 e-series funds).
Cash on hand: $31K
Total Ballpark assets: 700K

Liabilities:
Car Loan @ 2.65%: 14K

Monthly expenses: $3200 per month. This includes property tax, credit card bills, cars insurance, daycare, monthly investments etc. 

Job Situation:
Not very good. My wife's company had massive lay-offs. She is OK for now.
I just started a new job but the job prospects in my industry are falling faster than hair on my head. Salaries have gone back to pre dot.com crash era. I will need to figure out a way to successfully transition from my current job to something in demand. This is why we are trying to build up our cash reservoir slightly more. I will use my wife's TFSA to park some of our cash for now.

Monthly contributions:
My TFSA: $150 per month
My RRSP: $150 per month
RESP: $200 per month
Her RRSP: $300 per month through her employer. Matched 100% by employed so it's almost $600 per month.


Plans:

I don't anticipate any changes to monthly contributions to TD e-series unless one of us loses the job. All the investments we have including XRE and VIG have been set to DRIP. I will increase monthly contributions once the car has been paid-off and daycare expenses have been cut to half.

Build a cash reservoir of $60K by the end of this year to give us more flexibility. My wife is interested in becoming her own boss and has started exploring some ideas. If her job situation stabilizes, I may use this money to invest in a rental property. I understand inflated real estate prices make it very difficult to find cash flow positive properties so I am researching as much as I can and will not jump to any decisions.


I also plan to invest $10K per year in a solid blue-chip investment that I can DRIP and hold forever. Plan is to do this for next 10-15 years so we can gradually build up a source of passive income

I wouldn't mind if one of us starts working part-time or stay at home in mid 40's so we can devote more time towards child/children's education.

Will update this thread every 3 months and would welcome feedback on my current situation and what can be done better. I wouldn't call ourselves frugal but I don't jump into impulse buying.


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## b_foot (Dec 16, 2010)

Just my 0.02. Your monthly expenses after subtracting the monthly investments are $2400. Assuming that either one of you lost your job. EI will foot up to ~ 1600 a month for 10-12 months. That combines with salary of another spouse, you likely cover the monthly expense -- at least for the first 10-12 months. You technically don't need $60K of buffer. Again, it is my 0.02.


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## heyjude (May 16, 2009)

Looks like you own your home free and clear. That is a huge advantage! You are right to think ahead and look for opportunities in new, more secure careers. This would be a good time to document your expenses in detail and have an honest look at what is discretionary. In a pinch, you could downsize your home.

Presumably financial concerns are part of the reason you are hesitating about having a second child. Just be aware that your biological clocks are ticking. If you wait too long and then decide to go ahead in your late 30s or early 40s, be aware that the probability of success is lower and the risks are higher.


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## Taraz (Nov 24, 2013)

heyjude said:


> Presumably financial concerns are part of the reason you are hesitating about having a second child. Just be aware that your biological clocks are ticking. If you wait too long and then decide to go ahead in your late 30s or early 40s, be aware that the probability of success is lower and the risks are higher.


If you think she's about to lose her job, it might be a good time to have a kid. (I haven't gone over the EI rules in detail - if you're on EI but have a baby, do you still get full mat leave?)


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## Cdnwife (Sep 10, 2013)

If she were to be laid off and go on EI, once she has a baby, the EI claim changes from regular to Maternity/Parental benefits. However, she will not be able to collect for an additional 52 weeks on top of the regular EI. The only way you get more than 52 weeks is if you have to claim Medical EI prior to collecting Maternity benefits. 

She also won't be eligible for EI after a Mat Leave unless she works the required number of hrs to start a new claim. So if she would get laid off during her Mat Leave, you want to make sure she gets a good severance package that will help her accumulate enough hours for a new EI claim.


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## techcrium (Mar 8, 2013)

$700K assets by age 34 with 4 year old child on a 75K income? Explain!


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## nobleea (Oct 11, 2013)

techcrium said:


> $700K assets by age 34 with 4 year old child on a 75K income? Explain!


I think it was 75K net income.
Still very impressive numbers if there isn't a mortgage.


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## Kumar (Dec 28, 2013)

Yes, it's 75K net income. Some of our assets such as house and investments have also grown
I started working full time when I was 19 and wife has been working full time for almost 8 years with one year maternity break. My previous employers matched 100% RRSP contributions on up to 5% of salary which also helped a lot.


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