# Paying down debt, building wealth...hopefully!



## orange (Oct 23, 2011)

Hi everyone,

I’ve been lurking and reading the boards for a while now and thought I’d sign up, introduce myself, and obtain some feedback from everyone. I’m a 32 year old female, engaged but no kids. I work as a nurse and my net take home pay is about $4000/month.

I spent too many years in university getting a degree to make parents happy, then did another degree to make myself happy – so started in the workforce a little late, with a significant student loan *sigh* in 2005, at the age of 25.

I spent my first working year saving money and paying off student loans. I also bought a pre-construction condo that same year, knowing I’d have a couple of years to save up my 25% down payment. Made a hefty down payment when I finally took possession in 2008 and proceeded to rapidly pay down my mortgage (I don’t buy much and live pretty frugally…and I hate the idea of debt. I did spend a lot of money traveling rather than buying “stuff” and have no regrets – my wanderlust has been satisfied).

I initially maxed out my RRSPs, unfortunately in MFs that didn’t do terribly well…mainly due to fees and timing (bought most in 2007, early 2008) so don’t have much to show for it  I’ve since continued to contribute, but don’t get too much room as I have a partially-indexed DB pension plan at work.

Now I’ve decided to take investing more into my own hands…looking at solid dividend paying companies and index funds/ETFs.

I moved from downtown Toronto to the ‘burbs in Oct 2010 with my fiancé…who doesn’t care about money at all. He has no interest in investing or ever retiring (he loves his job – I think he’s crazy). The good thing is that he too doesn’t spend much – we’re pretty simple people and what he does spend money on (his car – he rebuilt it himself, his videogame obsession – we’ve got a crazy 120 inch projection screen in the man cave) brings him an unbelievable amount of joy, so I don’t care how much he spends. He’s also now very good at saving his money (I take credit for that).

We bought a house we knew we could carry on one income, just in case. We have good cash flow but didn’t have quite enough money for a 20% down payment (15% only after all other fees were taken into account), so we used a line of credit (p+0.5%) for the rest to avoid CMHC fees. I chose not to sell my condo – had I done so we could have bought the house in cash, but my mortgage is small and I knew I could easily carry it and make a profit by renting it. 

So here is where I stand right now:

Assets:
Condo - $232,000 purchase price in 2005 (can easily be sold for >$350,000)
House - $187,500 (my half of $375,000)
RRSP - $32,454
TFSA - $15,434
Non-reg Investments - $7522
Chequing Account - $7,910
Savings Account - $3,737 
Total Assets = $486,557

Liabilities:
Condo Mortgage - $58,508
House Mortgage - $138,920 (my half of $277,840)
HELOC - $2,271 (my half of $4,542) 
Total Liabilities = $199,699


Net worth = $286,585

Net worth = $287,200


We both contribute $2000/month to a joint account from which we pay our joint expenses, then any money left from our pay (about half) goes to paying individual expenses, random extra mortgage payments, savings, etc. 

We spent this year paying down our line of credit and making some small improvements to our home (we do most work ourselves). We spent quite a bit of money this year on the house, but on things that are one-time or long-term deals (e.g. new water tank, refinishing floors, “setting up house” with some furniture (e.g. neither of us owned bedside tables, and we need them!), landscaping, buying tools, etc.). The monthly home maintenance cost should come down significantly this coming year.

Our monthly basic expenses are reasonable, I think:
$1375 mortgage
$300 property tax
$50 insurance
$1150 HELOC payment
$100 gas
$60 hydro
$20 water/sewage
$500 groceries/eating out
$600 home maintenance/setting up house/etc.
$120 cable/internet


There are places we can cut back on, like food and cable/internet – but really, those are pretty much our only sources of entertainment (we like to have dinner parties and eat quality food, and watching movies in our home theatre is way better than at the movie theatre) so I don’t really feel TOO much of a need to cut back. We can do better planning our meals and buying when things are on sale, however. I'm not sure how much utilities should cost (we're in a 1960s 2 story detached home, about 1400 sqft.), but we do try to conserve where we can. Any suggestions on our expenses are welcome.

Our HELOC will soon be paid off (within 2 months) and our HELOC payments will automatically be redirected to our mortgage to accelerate pay down.


My financial goals for 2012 are to:

1) Increase my knowledge of investments. I've concentrated on living within my means, reducing debt and saving money, but now I'd like to work on building wealth. I expect wage increases to match inflation but nothing more, so I'm looking to increase through investments. I've done a lot of reading...now need to put things into action

2) Maximize my TFSA and RRSP (not a lot of room as I have a DB pension which takes up space – unfortunately only partially indexed to inflation), for a total of about $9500.

3) Double mortgage payments once HELOC is paid off.

4) Build a portfolio of stocks with dividend reinvestment plans and refine my TFSA/RRSP holdings to build a nice, integrated, well-diversified overall investment portfolio.

5) Get fiancé to start retirement savings! (wish me luck)


So that’s it in a really large nutshell! How are we doing? Any advice/suggestions?


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

It looks like you've got it all figured out. Only thing I would suggest is to bank some more cash as your emergency savings account. You could hold this in your TFSAs.

Good job!


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## jamesbe (May 8, 2010)

Wow good job, looks great to me. Not even sure how you cold cut back on food and groceries if you only spend $500 a month including restaurants. We spend $450ish a month and never eat out, we've tried reducing but its not really possible without starving.

Your utilities are also very low! Lucky you, you guys will be very well off in a short time!

I guess the only place is $600 a month for maintenance? Seems like a lot to me, but you do have an older house and I'm not sure what that contains.


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## MoneyGal (Apr 24, 2009)

Hard to find anything to criticize about this plan! 

As a nurse, your income is "bond-like." You might want to take a look at Moshe Milevsky's book, Are You A Stock or a Bond? 

Here's a shorter piece on the same topic: http://online.wsj.com/article/SB10001424052748704904604575262712612181000.html?KEYWORDS=milevsky

The jist of this way of thinking is that if your income isn't affected by stock market gyrations (i.e., if you are a nurse!), then the human capital allocation on your personal balance sheet is like a giant bond (when you are young). Thus your overall allocation - including your human capital - is already weighted towards bonds...which means you may want to include more stocks in your financial allocation than someone else (i.e., banker) whose income is much more stock-like (it fluctuates with stock market returns).


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## Sampson (Apr 3, 2009)

Is the condo being rented out? and if so, is it worth your time and effort?

I would suggest you are quite heavily weighted in real estate, 86% of your assets are from the two properties you any 'correction' in the housing market can affect you dramatically.

I personally would consider diversifying a little, selling the condo, using some of the proceeds to pay down your debt, and the other half to invest within other types of assets.


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## Saniokca (Sep 5, 2009)

Agree with Samson 100%


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## orange (Oct 23, 2011)

Hi Everyone,

Thanks for all of your feedback!

@TRM - yes...I can always use a larger cushion! I don't really have an emergency fund...but the chequing account listed always has about that balance "just in case". My pay gets deposited into it, then money is immediately taken out and redirected to other accounts...for example, $2000/month goes to our joint chequing account to pay expenses. I didn't list the joint account at all because it's shared and because I consider that money to be transient - meant for spending.

I've been struggling with whether to keep my TFSA for cash emergencies...but I feel like the tax benefits would be wasted if I did that. As well, it's difficult to convince my fiance that wee need cash for emergencies when his response is always "if we really had a big emergency, we have a line of credit". 

@jamesbe - we are very fortunate - the home we bought seems to be quite efficient. The windows were replaced about 10 years ago and everything is nicely sealed. Of course, my fiance is a furnace so our house is never warmer than 67F when we're home during the day (63F at night and 60F during the day while at work )...and I wear a million layers  

The maintenance cost will come down this year - it takes into consideration all of the money we spent getting the new house set up (e.g. our large back yard was a neglected jungle...it cost a pretty penny and many hours of hard work to transform it).

@MG - thank you so much for the links. It's an interesting idea that I've been thinking about for a while. My job is much more secure than those of most people, and I'm pretty sure I'll have it for as long as I want it. Definitely bond-like. My asset allocation should probably be more risky, but I'm easing into things!

@Sampson - it certainly looks like I'm overweight in real estate...and that's why I don't have any investments in REITs (despite how attractive they are). I'm ok with it though, as I'm actually far less leveraged and more diversified than most people at this age, due to the reasonable mortgages. 

The condo is rented out - and currently it's very much worth my time and effort...because it's new construction there isn't much maintenance related to the unit that falls outside of the condo corporation's responsibilities. I've thought about whether I should sell it - I don't actually _want_ to be a landlord, but financially right now it's too good to give up. I also want to keep it for my parents down the line...when the time comes that they need to be in a one-floor home, they can live in it. But I'm not married to the condo, so you never know! 

I'll be updating the thread monthly with my financial position, to keep track of debt paydown, wealth building (however slow and painful it may be). I'll also be articulating what I'm planning to do with my TFSA ans RRSP money. Please feel free to provide comments, suggestions and advice. I want to hear it all - the good, the bad, and the ugly!


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## Jungle (Feb 17, 2010)

Welcome to the forum! We look forward to your replies and interaction. I would say you are responsible for your own success so far and so far you are doing really well.


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## orange (Oct 23, 2011)

*Monthly Update*

Hi All,

So here is a bit of an update for the month. Not a whole lot has changed. I had hoped to be HELOC free by the end of the month, however I ended up making a fairly large purchase this month that I hadn’t anticipated (NOT an emergency, so no e-funds were used…simply a large gift), so I will work on getting rid of the HELOC next month. 


Assets:
Condo - $232,000 (purchase price in 2005) (no change) 
House - $187,500 (my half of $375,000) (no change)
RRSP - $33,841 (+$1,387 = +4.27%)
TFSA - $16,419 (+%985 = +6.38%)
Non-reg Investments - $10,500 (+$2,978 = 39.59%)
Chequing Account - $7,068 (-$842 = -10.64%)
Savings Account - $3,778 (+$41 = +1.10%)
Total Assets = $491,106 (+$4,549 = +0.93%)

Liabilities:
Condo Mortgage - $58,235 (-$273 = -0.47%)
House Mortgage - $138,455 (-$465 = -0.33%)
HELOC - $1,021 (-$1,250 = -55.04%)
Total Liabilities = $197,711 (-$1,988 = -1.00%)


Net worth = $293,395 (+$6,810 = +2.37%)


I still managed to get my net worth up a bit, mainly due to paying off debt, increasing non-reg contributions and the luck of an upward stock market, which helped investments along. I have yet to make my TFSA contribution for the year, nor my RRSP, but I will be doing the TFSA shortly, hopefully. As for the RRSP, I don’t have a huge amount of cash right now, so I will be making monthly contributions throughout the year.


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## Financial Cents (Jul 22, 2010)

It sounds like you have a very good plan in place.

If the condo isn't causing you too much hassle, keep it. My wife and I did the same thing in Ottawa. Kept our condo for a couple of years, until we got tired of playing landlord when things went wrong. It wasn't a new build, it was a 30 year-old building. Your situation might be very different with a newer build. 

We just managed to payoff our line of credit (LOC). Felt great! 

Continued success to you. No doubt you'll have it with the diligent tracking you've already started.


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## orange (Oct 23, 2011)

Thanks FC!

Yeah...it's a pretty new condo so I don't anticipate much hassle...so far, so good. I'm not sure I want to be a long-term landlord, though, so we shall see what happens in a few years.

Congratulations on paying off the HELOC! There's always a HUGE sense of satisfaction when you clear a debt...saving $30,000 in my RRSP is nowhere near as satisfying as paying off $30,000 worth of student loans! Can't wait to see my HELOC wiped out!

Thanks for the words of encouragement!


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## orange (Oct 23, 2011)

*HELOC be gone!*

Just paid off the HELOC balance! Wasn't a huge amount left, but feels great to eliminate something outright!


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## Four Pillars (Apr 5, 2009)

orange said:


> Just paid off the HELOC balance! Wasn't a huge amount left, but feels great to eliminate something outright!


Nice work!


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## orange (Oct 23, 2011)

*End of Feb Update - not for steve41 (he thinks it's creeeepy) *

Hi All,

Another monthly update. This month really just reflects a lot of reallocation of funds. 

I used cash from chequing and savings accounts to fund my RRSP and my non-registered investments. This was mainly for timing reasons – I didn’t get paid until today but had some larger bills to pay (property taxes) and didn’t want my chequing account balance to get too low (I just like having a big cushion). 

I still have not contributed to my TFSA as I wanted to get some money into my RRSP before the deadline and just don’t have an extra $5,000 to spare. Why? Partly because I PAID OFF MY HELOC! What remained wasn’t huge, but it feels great to have one less thing to worry about, and now that money can be redirected to either investing or paying down the house.



*Assets:*
Condo - $232,000 (purchase price in 2005) (no change) 
House - $187,500 (my half of $375,000) (no change)
RRSP - $38,806 (+$4,965 = +14.67% - mostly contributions)
TFSA - $17,483 (+$1,064 = +6.48% all investment returns)
Non-reg Investments - $13,019 (+$2,519 = 23.99% - about half new contributions)
Chequing Account - $4,861 (-$2,207 = -31.22%)
Savings Account - $1,956 (-$1,822 = -48.23%)
Total Assets = $495,625 (+$4,519 = +0.92%)

*Liabilities:*
Condo Mortgage - $57,961 (-$274 = -0.47%)
House Mortgage - $138,058 138,455 (-$397 = -0.29%)
HELOC - $0 (-$1,021 = -100%)
Total Liabilities = $195,974 (-$1,737 = -0.88%)


*Net worth* = $299,651 (+$6,256 = +2.13%)


The increase reflected in the investments is about equally split between new money contributed and stock market gains. I am young(ish) and it is clear that most of my net worth increase will come from savings and paying down debt, rather than investment returns…however the markets were kind in February!

You might be wondering why I added to my non-registered investments before my TFSA…this is because I have been having a hard time finding good value for my money. I am not a sophisticated investor (yet!) and don’t really “trade” or use strategies like options, and so I am having a hard time finding stocks I want to own at current prices. As I am trying to build DRiP positions in my non-registered account, which will eventually be moved into my TFSA, I decided to invest my money in building those positions for now.

Going forward I plan on building back up the savings I raided and re-starting monthly RRSP contributions (this was the first year I have ever had to put money in "by the deadline" – I have always usually made monthly contributions but slacked off last year). Additionally, like I said, I will build my DRIP positions and likely transfer something to the TFSA this year if I cannot find a better opportunity for the money. If I had a lump sum to contribute I would probably just park it in the TFSA and wait for a buying opportunity in something, but I will only be able to contribute a few hundred each month, so the DRIP seems the way to go for now. Any thoughts about this? Reasonable or am I missing a potential opportunity?


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## Sherlock (Apr 18, 2010)

If your after-tax pay is $4000/month how are you increasing your net worth by $6000+ each month?


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## crazyjackcsa (Aug 8, 2010)

I was wondering the same thing. Pension allowance perhaps? Or is it a reflection of growth of investments? 

The only thing I might suggest is potentially rolling some things in together with your fiance.

For instance: The house and the mortgage. I can understand keeping bank accounts separate (although my wife and I don't do it) but there is no need to "My half" the house and the debt associated with it.


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## orange (Oct 23, 2011)

the numbers are a little skewed due to timing - i don't NORMALLY increase my net worth so much each month...about half of the growth each month (~$3000) was due to growth in investments, which is really just a reflection of the tear the stock market had been on in Jan and Feb. I don't expect that to continue. 

My take home is slightly higher than $4000/mth - I rent out my condo and after expenses I have about $200/mth left over, so make it $4200/mth. Plus, the condo mortgage gets paid down by about $275/mth, which adds to my net worth.

But, yes, actually...I pretty much save most of the money I earn, and my major expenses are debt repayment (HELOC and mortgage), which directly contribute to my net worth. I only spend about $1000/mth on expenses that don't increase my net worth (food, property tax, utilities, transport, etc.).

If markets were to remain even, I would expect my net worth to increase by ~$3000/mth, not $6000. I am sure this will be reflected as the year goes by and markets cool off.

@crazyjackcsa - thanks for your suggestion. In "real life" there is no "my half, his half" of the house/mortgage...we have a joint account that we contribute to and from which all household expenses are paid...but since this was a record of my financial situation and progress, I needed to include my home...but I didn't think it fair to claim the entire home as mine, even if it came with the entire mortgage liability...so I just didn't know how else to reflect that.


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## K-133 (Apr 30, 2010)

Being a real estate investor I tend to disagree with the advice to sell simply due to your allocation. If you are willing hang in for the long haul, a correction in the housing market is likely to have a well mitigated impact on your plan, though it may limit your options should you choose to alter course in the future. The only reason I would advise you to sell this property would be as a means of transferring such equity to pay down your principle home mortgage as that interest is not tax deductible. This would be my advice as a means of improving your plan. In addition however, you may wish to consider at that point to purchase another pre-construction if the price makes sense (I didn't notice where you lived). My advice in this regards is also influenced by my personal assessment of the appreciation rate of real estate assets over time where I generally view 5 years as the move on point. Given that pre-construction is now priced at present or even future values in many areas, this may be a difficult move at this point in time. As an alternative, I do believe that the stock market is likely to outperform the real estate sector over the next 5 year period (in Canada). 

Therefore my advice would be similar to the previously mentioned to consider reallocation but for very different reasons which focuses on projected performance rather than a blanket rule regarding allocation. But I would also assert to you that I believe your current course to be healthy over the long run.

As an aside, are you discounting your tax liability from your rental income or is that $200 take away before you pay taxes on the $200 profit + $275 principle payment? If the latter, I'd also advise to adjust your planning records to reflect.


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## orange (Oct 23, 2011)

@K-133 - thanks for your comments and insight into the real estate aspect of this thread...I always appreciate hearing people's opinions and suggestions, especially when they have expertise in a particular area. 

I've said it before - I certainly don't consider myself a real estate investor - I just happen to have a rental property because it just didn't seem to make good financial sense to sell the property when I moved. This is one reason why I am conflicted about what to do with the property. As far as I am concerned, I will keep the property as it is cash-flow positive, and I feel like it will continue to appreciate over the long-term. It also provides me with a lifestyle option should I ever want to move back to the city - I won't have to worry about being able to afford to buy into downtown. 

Despite the enthusiasm of many people who suggest a real estate crash will wipe me out, I believe I am still ahead (I would have otherwise been invested in the stock market when it tanked and would only be breaking even or marginally ahead now)...and even a significant correction will likely leave me with a gain on the property. I bought pre-construction in 2005, back when pre-construction really was a discount, in a semi-industrial area of Toronto...which has since been developed with "boutique hotel/condominiums", thriving retail and entertainment...so I will be ok  I do agree with you - I think over the near-term the stock market will perform better than the real estate market, but I am looking at the condo for income in the short term and capital appreciation in the long term.

Since I am in the GTA I would not think of buying another property, even pre-construction. I just don't see opportunity like I did in 2005. I wouldn't buy a single-family home, so it would be a condo. I don't know why anyone in the GTA would want to live in a condo unless it was in Toronto...you live in the burbs for the houses/land...not a condo. Maybe Mississauga, but Mississauga condos are priced just like Toronto ones, but rent for less - no point.

As for the tax liability, yes, that is $200 after all expenses and taxes owed on the income.


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## orange (Oct 23, 2011)

*March Update*

Another monthly update! The markets in March were up and down, but I had small overall gains on my investments. Again, the biggest changes in my net worth were related directly to my savings rate. 


Assets:
Condo - $232,000 (purchase price in 2005) (no change) 
House - $187,500 (my half of $375,000) (no change)
RRSP - $39,685 (+$879 = +2.27% - investment gain)
TFSA - $17,796 (+$313 = +1.79% investment gains)
Non-reg Investments - $17,159 (+$4,140 = 31.80% - about 3/4 new contributions)
Chequing Account - $5,260 (+$399 = +8.21%)
Savings Account - $1,984 (+$28 = +1.43%)
Total Assets = $501,384 (+$5,759 = +1.16%)

Liabilities:
Condo Mortgage - $57,717 (-$244 = -0.42%)
House Mortgage - $137,461 (-$597 = -0.43%)
Total Liabilities = $195,178 (-$796 = -0.41%)


Net worth = $306,206 (+$6,555 = +2.19%)


I think the most striking thing for me this month, when looking at the assets/liabilities breakdown, is just how little money is going to paying off liabilities at my current rate. Up until this month I had being pounding away at my line of credit, which was paid off last month. I had planned on taking the amount of money that had been spent on the HELOC payments and redirecting them to extra mortgage payments, but never ended up doing this – instead most of the money went to extra investments. The result? Well, looking at my liabilities – barely a dent has been made without extra payments! $796?? It’s kind of depressing, actually. So, today I put in a request to automatically increase my house mortgage by almost what I was paying on the HELOC.

I still haven’t made my TFSA contribution for the year, but the plan is not to add new money to it but rather to transfer in some shares from my non-registered DRIP holdings when I build a large enough position to DRIP synthetically within the TFSA.


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## orange (Oct 23, 2011)

*April Update - Ouch! The Stock Market Hurts!*

If you needed proof that my net worth increases were mostly due to the luck of the markets, here it is. I got smoked in April, with my investments losing over $2000. Yikes! But additional contributions soften the blow to about $1600, or a little over 2% loss. The start of May isn’t looking good either!

Assets:
Condo - $232,000 (purchase price in 2005) (no change) 
House - $187,500 (my half of $375,000) (no change)
RRSP - $38,970 39,685 (-$715 = -1.80% - investment loss)
TFSA - $17,620 17,796 (-$176 = -0.99% - investment loss)
Non-reg Investments - $16,447 17,159 (-$712 = -4.15% - investment loss)
Chequing Account - $5,570 5,260 (+$310 = +5.89%)
Savings Account - $1,930 1,984 (-$54 = -2.72%)
Total Assets = $500,037 501,384 (-$1,347= -0.27%)

Liabilities:
Condo Mortgage - $57,465 57,717 (-$252 = -0.44%)
House Mortgage - $136,587 137,461 (-$874 = -0.64%)
Total Liabilities = $194,052 195,178 (-$1126 = -0.58%)


Net worth = $305,985 306,206 (-$221= -0.00%)


This month I started with the increased mortgage payments on the house, which works out to an extra $500/month for me. I look forward to seeing that mortgage balance fall a bit more quickly. I continued my regular $500/month contribution to my non-registered account, but beyond that I made no more contributions. 

I used my excess cash this month to pay my taxes ($1400!). I’ve never owed money come tax time before, but this was due to the rental property income. At the end of last year I asked that I have more money deducted at source from my employer so that I will not owe tax. I realize this is the opposite of what most people do – I am giving the government an interest free loan – but I would rather have my income fixed and know that I do not need to come up with more money next April to pay taxes. 

Paying down debt has neutralized most of effect of the investment losses on my net worth, leaving me essentially unchanged on the month. 

The coming months will have more big expenses, so I do not anticipate making additional contributions to investments. Hopefully the markets play nice and I see some recovery in my portfolio!


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## orange (Oct 23, 2011)

*August Update - Debt repayment pays off!*

So it has been a really long time since I updated this since I haven’t been around much and haven’t been keeping track, but I am back into my normal routine, so I will update this as of the end of August, and possibly just move to bimonthly or maybe even quarterly updates, as it’s really not that exciting!

Assets:
Condo - $232,000 (purchase price in 2005) (no change) 
House - $187,500 (my half of $375,000) (no change)
RRSP - $38,756 (-$214 = -0.55%)
TFSA - $14,695 (-$2,925 = -16.60%)
Non-reg Investments – $21,819 (+$5,372 = +32.66%)
Chequing Account - $6,638 (+$1,068 = +19.17%)
Savings Account - $2,616 (+$686 = +35.54%)
Total Assets = $504,024 (+$3,987= 0.80%)

Liabilities:
Condo Mortgage - $55,878 (-$1,587 = -2.76%)
House Mortgage - $127,480 (-$9,107 = -6.67%)
Total Liabilities = $183,358 (-$10,694 = -5.51%)


Net worth = $320,666 (+$14,681= +4.80%)

Most of the changes to the investment/asset section are related to simply moving money around – I withdrew some from the TFSA, but am waiting for next year to put it back in, so for now it sits in the “non-registered” account. The gains are essentially related to the markets recouping some of the losses from April.

Most of the net worth gains are related to debt repayment. I’ve made good progress on paying down the house mortgage – in April we started the increased mortgage payments, but we also ended up making a couple of larger lump-sum contributions. 

I’ve also slightly increased my condo mortgage payments starting in August – and extra $100 biweekly. I know some people don’t believe in paying down their rental property mortgage before they’ve cleared their primary residence mortgage, but the interest rate on the condo is significantly higher (more than double) than the house rate…so I feel more comfortable paying that down.

Net worth has continued to increase nicely…if anything, this money diary is a good example of how something as simple as paying down debt/saving excess cash – rather than relying on making huge inestment gains – can really increase net worth. Being successful in the markets is great, but not everybody has the ability or the interest in doing so…but we can ALL pay down debt and live below our means.


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## orange (Oct 23, 2011)

*Year End Update*

Not a lot has happened since the last update, so let’s get to the numbers. 

As usual, most net worth gains are due to debt repayment. Increased regular payments, plus a number of lump sum contributions, have resulted in significant progress with regards to principle residence mortgage paydown. No new contributions were made to investments – gains are the result of the market, making up for the losses sustained over the summer

*Assets:*
Condo - $232,000 (purchase price in 2005) (no change) 
House - $187,500 (my half of $375,000) (no change)
RRSP – $39,267 (+$511 = +1.32%)
TFSA - $18,067 (+$3,372 = +22.95%)
Non-reg Investments – $22,754 (+$935 = +4.29%)
Chequing Account - $5,809	(-$829 = -12.49%)
Savings Account - $4,850	(+$2,234 = +85.40%)
Total Assets = $510,247	(+$6,223 = +1.23%)

*Liabilities:*
Condo Mortgage - $53,660	(-$2,218 = -3.97%)
House Mortgage - $121,660	(-$5,820 = -4.57%)
Total Liabilities = $175,320	(-$8,038 = -4.38%)


*Net worth* = $334,927	(+$14,261= +4.45%)



From an annual perspective:
*Total Change from 2012:*

*Jan 1, 2012* *Jan 1, 2013* *Change*
Assets: $486,557 Assets = $510,247 + $23,690 (+4.78%)
Liabilities: $199,699 Liabilities = $175,320 - $24,379 (-12.21%)
Net Worth: $286,858 Net Worth = 334,927 + $48,069 (+16.76%)

I am very please with the progress made this year. We paid off the HELOC and automatically started to contribute that same amount of money to our mortgage. This year was heavily focussed on debt repayment, and now that we’ve got a good system in place, we will simply stick with it and chip away at that mortgage debt.

Our spending didn’t change much, but we did manage to cut down our house expenditures significantly (they were originally high due to the “start-up costs” of a new home), and our cable/internet bill has been halved since we cut out cable.

*How’d I do on my 2012 goals?*

*1) Increase my knowledge of investments. I've concentrated on living within my means, reducing debt and saving money, but now I'd like to work on building wealth. I expect wage increases to match inflation but nothing more, so I'm looking to increase through investments. I've done a lot of reading...now need to put things into action*

DONE! I’ve learned a lot in the past year, and strengthened my knowledge of how to evaluate the fundamentals of a company. I have also use that knowledge to shuffle my investments (see #4). My journey, however, has shown me that the best way to build wealth has actually been to pay down debt and save. 

*2) Maximize my TFSA and RRSP (not a lot of room as I have a DB pension which takes up space – unfortunately only partially indexed to inflation), for a total of about $9500.*

PARTIAL SUCCESS I contributed to my TFSA and RRSP but it was partially through contributing funds from the non-registered account, not all new money, in order to rejig portfolios. 

3) Double mortgage payments once HELOC is paid off.

DONE! (sort of) Our mortgage payments are just under twice the original, plus we make lump sum contributions.

4) Build a portfolio of stocks with dividend reinvestment plans and refine my TFSA/RRSP holdings to build a nice, integrated, well-diversified overall investment portfolio.

DONE! Since my last update I have mainly been focusing on rearranging my portfolio for tax optimization, moving my US and foreign equities into my RRSP, using my TFSA for Canadian equities which I hold for capital appreciation or as shorter term investments (trading), and non-registered account for my long term Canadian DRIPs.

5) Get fiancé to start retirement savings! (wish me luck)

FAIL! He is super focussed on paying down the mortgage (which I am ok with, I would just prefer a more balanced approach). Better luck in 2013


Goals for 2013:
1)	Maximize TFSA
2)	Maximize RRSP
3)	Learn more about conservative options strategies
4)	House mortgage below $105,000, condo mortgage below $50,000


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## Pennypincher (Dec 3, 2012)

Great work! I think you are doing great. I also think it is fantastic that you have a job that is considered very stable.


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## orange (Oct 23, 2011)

Thanks Pennypincher! Yes, I am taking a lot of comfort in the stability of my job right now as my husband's job is precarious and will likely be lost within a year. It's funny, my job has good pay and stability, but nobody wants it, lol.


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## orange (Oct 23, 2011)

*Q1 Update*

A little late, but here’s my Q1 update, as of April 1st: 

After a nearly 3 year pay freeze I got a nice bump in pay in the second half of last year, which has increased my take-home pay by about $250/month and which will certainly help going forward. The condo is still rented and I am very happy with the arrangement. 

I made both RRSP and TFSA contributions in the first quarter, however funds came from already existing non-registered accounts. This is how I plan to make contributions until I have my assest allocation correct, with new money then going to non-registered accounts. Overall my assets grew as a result of a combination of new money invested and stock market gains (which are currently being wiped out, lol). 

I made a good dent in the mortgages, with a decent lump sum being applied to the house in March. I appear to be on track for meeting both mortgage goals.

Assets:
Condo - $232,000 (purchase price in 2005) (no change) 
House - $187,500 (my half of $375,000) (no change)
RRSP – $47,106 (+$7,839 = +19.96%)
TFSA - $26,449 (+$8,382 = +46.39%)
Non-reg Investments – $15,039	(-$7,715 = -33.91%)
Chequing Account - $7,024 (+$1,215 = +20.92%)
Savings Account - $4,421 (-$429= -8.85%)
Total Assets = $519,539 (+$9,292 = +1.82%)

Liabilities:
Condo Mortgage - $52,209 (-$1,451 = -2.70%)
House Mortgage - $114,832 (-$6,828 = -5.61%)
Total Liabilities = $167,041 (-$8,279 = -4.72%)


Net worth = $352,498 (+$17,571= +5.25%)



Goals for 2013:
1)	Maximize TFSA – on track 
2)	Maximize RRSP – on track
3)	Learn more about conservative options strategies – started
4)	House mortgage below $105,000, condo mortgage below $50,000 – on track


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