# 25 starting out well, want to retire early!



## Butters (Apr 20, 2012)

I saved huge money until I was 24, then I moved out of moms and bought a house for 250k. 
I put 20k into repairs and such, and am renting out my house now that i've moved cities for a girl. We plan to return in 2 years


my only debt is
Mortgage 193,000 at 2.99 4 year term (3yr left)





House 300,000
Car 8,000
Chequing 2,000
TFSA savings rate 1.35% 12,000

I'm getting 1850 rent per month (1500 month upkeep 1k mortgage 200 insurance 300 taxes) for my house my dad is there to upkeep it

I pay 60% of 1100 (660)


Insurance and gas for car is about 200 a month

food is typical 300 or so a month and i rarely spend money

I make 3k per month take home

lets just say 500 bucks a month for other expenses, so i can set aside an easy 1500 a month, assuming everything lines up right


my girlfriend makes 1200 a month as a masters student, and has 20k saved up, not that we share money, but just for reference, she's paying 40% of rent/food


I'm in a very good position right now, the only thing the house needs is new windows, maybe doors, I plan to return in 2 years, maybe ill do it then (expecting 15k + hopefully have cash for it)


2k + 12k in the bank is nice, but with the extra money coming in (plan to keep at least 10k for emergency fund, also this will be used to windows in future possibly)

I am leaning towards paying off the mortgage faster (RB allows double up mortgage payments 470$ biweekly)

but Couch Potatoe also interests me, but I don't know how to get started. to be honest, I'd love just throwing a bunch of money on some dividend stocks like the canadian banks, and sitting on them

Anyways, just some rough numbers for this 25 year old, I'll update more later... any advice is welcome

when I get back to the house in 2 years, I plan to start doing 150 a month or so into RRSPs (to pay back my 23k home buyers loan) and keep it going to retirement! probably some lame mutual fund? maybe couch potatoe? i wish i knew how to get into that


I have my banking with PC financial
I have mortgage with Royal Bank, and since then I have free banking, although havent switched over, whats the point when PC rocks

But some how, with Royal, maybe I can get stocks or this couch potatoe thing everyone loves on these forums!
Royal charges 25 quarterly for stock account, unless you contribute 100/month, so that seems do-able


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## SpendLessEarnMore (Aug 7, 2013)

We have pretty similar situation. You can see my diary if you'd like for comparison. I made $2900 take home this month and have couple rental properties too so I can relate a bit to your situation.

That's a lot for insurance and property tax on a 250k house. Must be somewhere in Ontario lol. You don't have rent expense? And you're not paying utilities for the rental house?

Reason I ask is because that's a lot of rental income you'll have to declare. $16,200 and I'd guess interest be about $5000 so about $11k ish not including maintenance. And you're paying your dad to upkeep the place? I don't pay my dad to upkeep or mom to collect the rent lol. But if you declare the upkeep of $660 as an expense that can lower your net rental income considerably though your dad will have to declare it as income.

As well something to consider if you're looking to get into investment. The interest on the rental house is an expense to lower your net rental income and you're paying 2.99% on it. That's very low and your investment may be higher than this 2.99%. But not everything boils down to sound financial reasoning but also psychological. I also accelerated my mortgage payment on my house too just for that 'good warm fuzzzy feeling'.

The only thing I wish I had was your age. You're still young and doing good. Enjoy life spend some more on your girlfriend and yourself.


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## Butters (Apr 20, 2012)

Well just to clarify, the insurance is 1700 a year, taxes are 3500 a year and it's in Winnipeg and I'm paying around 470 biweekly mortgage i took a 25 year 200k loan I put (20%) 50k down avoid the CMHC fees, (250k house) I got a excellent deal on the house, I wasn't the highest offer, but my cheque for 30k made me look serious I guess. after the 20k in repairs, and the excellent deal, the house is valued at 365k by the city, but I think I could sell it for an easy 300k not to be greedy in my calculations it had a foundation crack, which was fixed, so hopefully its all good now! 4bed 2.5 bath 1600 sq feet 70foot x 260 almost half acre!

So, the house(winnipeg), rent is 1000month, and with insurance and taxes, its close to 1500 upkeep like i said... I don't pay my dad anything although I could... and they are paying 1850 plus utilities.
So, 350 profit / month assuming no repairs

In edmonton, I have the same Mailman job close to 60k/year, but I hear taxes are less in alberta, and I can claim moving expenses on my taxes too!
I'm paying 660 rent/month utilities included
and food and other stuff (new furniture) I havent really kept close eye on things yet

But its fair to say I only spend 1500/month including everything where I make close to 3k



I do need some advice. Do you know if Couch Potato is through any bank?

Like I have free banking set up with Royal bank(multiple accounts), would I be able to open some sort of Direct Investing account with them to get in on couch potatoe ETF
(direct investing fee is 25 quarterly unless you contribute 100/month)


Jan 02, 2009 TRANSFER IN $5,000.00 $5,000.00
Jan 04, 2010 TRANSFER IN $5,000.00 $10,073.54
Jan 04, 2011 TRANSFER IN $5,000.00 $15,218.63
In 2012 I added my $5,000 and took out $9,714.51
I have not contributed in 2013 yet



I currently have $11,128.73 sitting in my PC financial TSFA at 1.40%

How much could I put in now for 2013, and how much in 2014

I figure that Couch potato will allow me to earn more than 2.99% and it could be used a back up emergency fund. If say, my renters sucked, or I lost my job in a few years. I dont think Mail will ever go away since now we do the parcels, but I'm already bored of the Job, and it is pretty exhausting now that they cut so many jobs, the long hours are very taxing... and I do triathlons, I can barely do my 40 hours of work 
I have a University Degree in KIN, and wouldnt mind going back and getting a teaching degree... Even subbing would be neat, I think by the time all that happens, I will already be well off! I want to work more now, and less later on in life 
Anyways, stick with the Post for now, see where I'm at in a couple of years! Girlfriend should be done her masters, and we will be back home to winnipeg! both making decent money!




Also, in 2014(i think) I need to set up RRSP as I used 23k home buyers for my mortgage (2012)...
So I'll set up some contribution of 130-150 bucks a month into RRSP and hopefully get it in ETF couch potato, once I figure this stuff out

I guess if I'm saving 100+/mo in TFSA
and 130/mo in RRSP
plus paying my mortgage only 21 years left biweekly 470$
plus my pension at work

I should be in good shape

So, any advice on how to start? (couch potato)

*Edit, oh, and should I just switch everything over to Royal Bank (ie my job pay cheques), since thats where my direct investing will be... soon I hope
I mean I can keep the PC open, because its free, and why not?

or maybe I should just invest in Bank stock... because of the dividends


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## SpendLessEarnMore (Aug 7, 2013)

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html

If you can login to see your tax assessment it will show you how much contribution room you have for the year and your RRSP contribution room too.

Another passive investment option is the popular TD E-series that you may want to look into. There's no commission to buy and sell TD E-Series and low MER of about 0.33%.

You are definitely in good shape.


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## Butters (Apr 20, 2012)

Thanks, I have 15k room in my TFSA I think I can get close to maxing it out by next year...

but the question is where!

I saw a few posts talking about peoples choice bank having 3% TFSA, that is very interesting to me

I had set up an appointment at Royal Bank to get in on their brokerage account making 100/month payment so its free (not 25/quarterly)
And I wanted to buy a ETF named VDY under the TSX
I understand there is some fee per trade like 10-20 bucks... so 1 payment next week, of maybe 3000 wait a few more months until I get another couple thousand(month or 2) and see what interests me then

but that 3% savings account sounds juicy, although they could change that rate at any time (i remember collecting 4% at PC financial when it first came out, now its a pitiful 1.4%


anyways, I have some more free time next week, and I'll fully update my net worth
and decide if I want to get my feet wet into the stock market, or cop out with the easy 3%

thanks for the replies spendlessearnmore.... any other comments would be appreciated, as I still have lots to learn!


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## the-royal-mail (Dec 11, 2009)

5 year GICs are now available at 3% from RBC and possibly ScotiaBank. Check into that before taking risks and hassling with a relatively obscure facility.


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## Butters (Apr 20, 2012)

5 years is a long time to hold funds for me in this stage of my life!

I have doubled my mortgage payments for now...

but I still want to do this stock thing!

I was looking more into Royal bank, and I figure I would only do like 3 trades a quarter... but their fee for me would be 30 bucks a trade

i also noticed
http://canadianmoneyforum.com/showthread.php/10864-Sponsored-50-in-FREE-trades-w-QUESTRADE!
questrade is wayy cheaper for a beginner like me

I definitely want to get a brokerage account open very soon

I wish someone told me the low down on how to get started :-D in a low fee conservative matter!

Anyways, I promise next week I will update my net worth, and keep updating it!


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## the-royal-mail (Dec 11, 2009)

Better do your homework. A lot of us have had a lot of problems with that cheap broker you mention, despite what the spin doctors will say.


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## Just a Guy (Mar 27, 2012)

One glaring thing I noticed right away was your insurance costs. It sounds like you have owner's insurance (as if you lived there) as opposed to rental property insurance (as in you own it for the purposes of renting it) which is significantly cheaper (less than half). Your dad should gave tenant insurance to cover his stuff (around $200 usually per year). 

Right now you are probably paying too much and can be denied a claim because it's not the right type should something happen.


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## PrairieGal (Apr 2, 2011)

Here is a website that will explain couch potato investing. http://canadiancouchpotato.com/

Personally, I am a novice investor with a small portfolio and I use the ING Streetwise Fund for my investing. http://canadiancouchpotato.com/2013/09/12/the-one-fund-solution/


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## Butters (Apr 20, 2012)

Thanks for everyone's comments!

I have set up an account with Questrade, it was easy.

I was ready to buy 1000 bucks (the min required to open an account) in the EFT VDY, it gives monthly dividends
but then, looking at the portfolio, its just the major banks, why pay a mer
So I looked at the banks and choose the cheaper one, who I thought was safer and had more space to grow.
It was tight between Royal Bank, and BNS
I went with BNS, which has been on a tear!! RY has too

The next week I transferred another 1000 bucks, and waited a few days, the US default was coming closer and I knew they would get their loan, so I impulsively bought 1000 bucks of Coca-Cola, after they got their loan, it went up quite a bit... looking more into this stock I noticed a 2 for 1 split... so this KO is at a pretty high value


I have also doubled up my last 2 mortgage payments, got my car transferred to this province, etc...


Anyways

Chequing 515.55 paid this thurs 1400, and Nov 1st I get 1850 for my rental house, cheque for 350 coming (old insurance)
TFSA 11,141.53 this is at 1.4% interest

BNS 16 units 1,005.61 
KO 26 units (us)1,008.02 combined 2,043.27 + 13.61 cash = 
2056.88 (which is strange because questrade shows me 70 dollars profit where did 13 dollars disappear, my trades were free, i saw the 4.95 go back into cash[must have something to do with market value, and sell value, OR SOMETHING???])

House worth 280k (maybe 300k+ on a good day)
Car worth 5k (maybe closer to 7k)
Tri Bike worth 1k (really 3k but you'll all give me slack for putting this in here)

*299713.96*

Debt
192,683.15 on mortgage
that's it

upcoming mortgage house 476 bucks (might double up)
a few minor weekly purchases in Credit Cards
(prepaid rent here until feb 2014)
(house/car insurances are paid off, nothing else big expected, until maybe taxes, then 3.3k house taxes in june)

Net worth without the incoming transactions +/-
*107,030.81*


Now, I have to buy at least 1 EFT per quarter so Questrade doesnt charge me an inactivity fee (because i dont have 5k there)

I feel like at the end of this week, I will pull out my TFSA, wait for my pay cheque and pump 12k into the mortgage for my annual lump sum

The stock markets are super super high right now... If I pay off some my house its a full 3% return on my money in the long run, maybe even more if rates go up
or I could risk some more in the market
TRQ is going up like 15%, it wouldnt be too late to catch, it still has another 30% upcoming
REI.UN has been beat up, went up like 5% last week but just dropped 1.48% today
ENB is one im looking at, but would like to get in at 42, its over 43
ENF their fund is looking okay
XBB a bond index

So anyways, I'll think about it at the end of this week, and put most of my 1.4% savings account in another area... any suggestions would be lovely! can even PM me

then november 1st I will have my 1850 rent cheque and keep that into my "emergency fund" with some other incomes my paycheques, by december it should be a healthy 6k and another 1k in my questrade gambling  if my furnace or something really bad happens, i could use my HELOC or borrow money from a family member, temporarily

Renting the house has been going awesome, my dad's had to fix a couple things, and call the plumber twice, but it was his friend and very cheap! They have an adult independence group home in there, and finally got 2 adults in there! Things are running smooth and they finally have steady income now, although they paid bills on time before, now I'm happy they have their little business going finally!



What I would Love to do, is wait until the markets collapse (perhaps less than 2 years), and buy when its much lower, and maybe even do the Smith Maneuver, my HELOC only has 10k room right now (mortgage was 250k i put 50 down, over the year i guess I've paid 10k off)

My questrade account right now is in TFSA
weird that i have 2 dividend stocks in there... i hear they aren't as bad on taxes as per interest


Anyways, I got my feet wet, doing some positive stuff, i think! Comments Appreciated


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