# Tracking and AlwaysLearning..



## AlwaysLearning (Dec 8, 2017)

Hello all,

I thought it is about time I write a Money Diary so I can gain some feedback/insights into what we have been doing or should be doing. I plan to update this quarterly going forward to track progress.
I grew up in a lower middle-class family where I lost my mother at a young age and then things got “interesting”. I moved out on my own at age 17 while still in high school. While working I finished high school and after a couple years of working went to University where I completed electrical engineering.
Fast forward…
I am 41 and my wife is 39. We have 2 kids ages 8 and 6.
My income is ~ 120K and my wife is 100K (both with recent promotions)

*Assets:*
House $1,200,000
Cars $36,000
Joint account $8,669

*My accounts:*
Unreg $23,589
TFSA $142,413
RRSP $200,008
LIRA $155,027
Company Stock $33,963
DC Pension $10,656
Cash/emergency $23,000

*Wife’s accounts:*
Unreg $42,989
TFSA $147,776
RRSP $130,137
DB Pension $154,788 (as of last annual statement)
Work savings plan $16,104

*Kids RESP’s*: $71,948 

*Liabilities:*
Mortgage: $195,200

*Family net worth: * * $2,212,700
Investable Assets* _(house, cars and RESP’s removed)_ *$904,755*

RRSPs, TFSAs are maxed, RESPs have had the full $2500 per child/year added.

My wife’s job is fairly secure whereas mine is ending in just under a year. (I am incentivized with severance and retention to stay until the end (~80K))

I have been very good at tracking our account progress etc. (live tracked in google sheets) but have not put much effort into tracking our spending. With my job ending I should/will put more effort into understanding our expenses.
I am confident we can cover expenses on just my wife’s income if needed with just a reduced savings rate. Also finding work will not be that difficult but may be at reduced pay as we are unwilling to relocate.
I have been fascinated by the FIRE movement but am unlikely to take an extreme approach. Ideally, I would find a job with less hours required or start my own venture. I am ok with a reduced pay for less time commitment. I think it is unlikely we would want to fully retire before the kids are off to university (12 years age 53).

What do you recommend we do with further savings? Further unregistered investing? Pay off mortgage? Learn to spend more money (I struggle with this one)?

Next year it is possible that I end up with a much higher income than normal (due to severance, retention and working income). Obviously will max out RRSP but will only have the annual max available (~27800). Any other considerations for this? (I know a good problem to have)

Feel free to ask questions on key points I may have left out. I appreciate any comments/advice.


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## Spudd (Oct 11, 2011)

You guys are doing amazing!! Congratulations!

My personal choice was to pay off mortgage once my registered accounts were maxed out. That is a guaranteed return which is not taxable (although these days, it is lower than it was when I had my mortgage). That also saves having to worry about tracking stuff for taxes on investments. 

With today's interest rates it is probably more mathematically prudent to invest in non-reg rather than pay down the mortgage, but it's also riskier, so pick your poison.


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## like_to_retire (Oct 9, 2016)

AlwaysLearning said:


> Pay off mortgage?


You don't reveal your mortgage rate, but can you find a guaranteed, no-risk, tax free return, equal to what you're paying on your mortgage? If not, then look at paying down the mortgage.

ltr


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## nobleea (Oct 11, 2013)

What city are you in?

You have a lot of NW tied up in your home. I would focus any additional cash in to investments. Under 1M in investable assets vs over 2M NW seems low.
Personally I wouldn't focus on the mortgage. You mentioned you have at least 13 more years paying kid bills and in the working world, so let the mortgage roll out until then. If you're in the accumulation phase, I don't think focusing on paying off an already low mortgage should be the target.


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## AlwaysLearning (Dec 8, 2017)

Mortgage rate is 1.5% so very low for sure. (We also have a HELOC which is currently unused so could pull money back out if needed)

We do have a lot tied up in the house. We moved from Toronto to a smaller Ontario city 4.5 years ago to have a better school environment for the kids. We admittedly bought more house than we need but love the home and we bought it for less than what our Toronto home sold for. This is why we have a lot tied up in our home.
The current value I mention is due to a lot of craziness in house prices (Likely I am even underestimating by 200K as current prices seem ridiculous).

Mathematically increasing our unregistered investments makes more since. Psychologically the mortgage paid off earlier would feel pretty good and take much less planning/thought for how to invest the funds.

AlwaysLearning


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## Ponderling (Mar 1, 2013)

Look at what contribution room will be 'left on the table' when your RESP matching grant is all used up. 
Keep plunking in money annually to get the matching grant,
But also lump sum the part that gets you to the 50K max contribution per kid soon.
I did that about when my kids were the age of yours, and now 12 years later the RESP end up at 190K, and that mostly in a pretty bland mutual fund.


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## AlwaysLearning (Dec 8, 2017)

I have looked at bumping things up to the full 50K (while not losing any grant) but I am still torn....

I want to make sure the kids have some funding for school and I expect with just doing the maximum grant amount the total for the two of them will be over 160K or 80K each. _I am just using E-series funds right now with their equity exposure reducing as they get closer to age 18 where it is nil. _
Another side of me feels that this is already so much money to have for school should they need more they should be paying for it.

While in University I noticed a difference between the kids that had to pay their own way and those that had their parents paying.
I know myself if I had failed a course that means I need to take it again in an off term which would mean I pay for it and lose out on time I could be working and making money to pay for school and living expenses. That added drive made it so I had no choice but to find a way to succeed. Some kids where everything is paid for them didn't care as much and would give up and allow failure to be an option.
Now I want it to be better for my kids and with at least 80K each it will be much better. I also want to be able to say this is how much you have for education from us. That money is yours to manage and pay for your expenses. If you need more you will need to earn it. If you have scholarships etc. and need less then you have extra at the end.

I guess the reality is if we put more in they could return that portion to us with the gains taxed at their tax rate..

This is something that takes more thought for sure. I do see the advantage to doing that lump sum early and getting that extra growth...


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## nobleea (Oct 11, 2013)

Our kids are a bit younger 7, 5, 3. We have 80K in our RESP.
I expect cost increases on post secondary to outpace regular inflation by a good chunk over the next 20 years. I think tuition and books (no rent) would run around 20K/yr for a university when your kids start university.
For those that have full RRSP and TFSA, RESPs can just be one more part of family investments to maximize values.


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## AlwaysLearning (Dec 8, 2017)

*End of Oct 2021

Assets:*
House $1,200,000 (likely under estimated given crazy markets)
Cars $36,000
Joint account $20,235

*My accounts:*
Unreg $35,438.79
TFSA $151,410
RRSP $217,316
LIRA $157,895
Company Stock $26,112
DC Pension $11,059
Cash/emergency $28,661

*Wife’s accounts:*
Unreg $46,915
TFSA $152,382
RRSP $133,659
DB Pension $154,788 (as of last annual statement)
Work savings plan $22,063

*Kids RESP’s*: $74,492

*Liabilities:*
Mortgage: $189,071

*Family net worth: $2,291,941
Investable Assets* _(house, cars and RESP’s removed)_ *$981,450*

Seeing many work opportunities so I am not concerned about finding work in the area. 
We have a few expenses coming up with large home purchases (Electrical work, Hot tub, EV charger) which is the reason for the high amount of cash on hand.
I still have a savings/emergency account but likely does not make since.. Could just use LOC for emergencies and have less cash drag...

Both markets and savings rates recently have allowed us to increase out investable assets well... I am looking forward to breaking the 1 million mark which could/should happen before the end of the year...


AlwaysLearning


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## banjopete (Feb 4, 2014)

Looking really good, you're in great shape by the looks of things. One thing that jumped out to me is what you pointed at in your assessment at the end and that's all that cash you're keeping around. You indicate that you have upcoming expenses but it looks like you have $49k in cash just sitting. Everyone has a different comfort level but if I were in your position I'd be trying to get nearly all of that into some beneficial investments rather than just sitting as cash. An LOC costs nothing to sit idle and would cover whatever items came up.

Pretty exciting to be on the cusp of such a big investable asset milestone as well, congrats.


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## Plugging Along (Jan 3, 2011)

AlwaysLearning said:


> I have looked at bumping things up to the full 50K (while not losing any grant) but I am still torn....
> 
> I want to make sure the kids have some funding for school and I expect with just doing the maximum grant amount the total for the two of them will be over 160K or 80K each. _I am just using E-series funds right now with their equity exposure reducing as they get closer to age 18 where it is nil. _
> Another side of me feels that this is already so much money to have for school should they need more they should be paying for it.
> ...


One thing to keep in mind is if you top off to the max $50k in the RESP, this is your money, you don't have to give it all to them for schooling. So if you have the cash, you can put it in the RESP, have it grow tax free, and then take it out in the most effective manner. 

My thought is your kids are still pretty young. If you have the room and the money can always put it in to get the tax free growth and distribute as you see fit. I think it would be worse to not have enough and want to give them more, than to have more than enough and just keep it. We currently have about $260K in RESP's and In trust accounts for my two (13 & 16). Based on their current aspirations, I am not sure it will be enough. They may or may not get scholarships, but they are two really hard working kids and I would have no problems funding their full education.


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## bigmoneytalks (Oct 3, 2014)

AlwaysLearning said:


> *End of Oct 2021
> 
> Assets:*
> House $1,200,000 (likely under estimated given crazy markets)
> ...


Well done! You will break the 1m investments barrier soon! Your TFSA amounts are outstanding. Can you share what investments/securities you have and how long have you been investing in your TFSA?


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## AlwaysLearning (Dec 8, 2017)

bigmoneytalks said:


> Well done! You will break the 1m investments barrier soon! Your TFSA amounts are outstanding. Can you share what investments/securities you have and how long have you been investing in your TFSA?


I started the TFSA just as a savings account in 2011 (Tangerine) I was contributing regularly but didn't do much. I then used their investment account with 1 fund until the end of 2016. In parallel between I started investing in various stocks within a direct investing account at my bank but was always below the maximum. It wasn't until 2017 that I maxed my TFSA contributions.

I have used it as a trading account with both winners and losers. 
My wife's account is a better story. Hers was maxed out a little earlier than mine (2015 I think) and had a small amount in it before that. but she did just simple couch potato with E-series funds. Over time there were times I had more after some of my stocks did well etc. But generally she tracked around the same as my account (currently ahead slightly).

I have learned a lot about investing by following companies, reading reports, etc. etc. but in the end keeping it simple and rebalancing annually. (IE doing what I say and not as I do) has yielded comparable results over the long term. 

I am moving towards the simple approach now with my accounts and more often than not new investments are going into VEQT for my TFSA. (I have lower risk in LIRA and RRSP but am keeping my TFSA as all equity at this point).

Currently I have 15 different stocks and VEQT in my TFSA. Mostly Canadian companies but also have Google, BRK.B and GE. No point going into details on the best/worst stocks I have owned in my TFSA as in the end the result is about the same (or slightly trailing) as a couch potato. 

But through all of it I can say I am AlwaysLearning.


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## bigmoneytalks (Oct 3, 2014)

AlwaysLearning said:


> I started the TFSA just as a savings account in 2011 (Tangerine) I was contributing regularly but didn't do much. I then used their investment account with 1 fund until the end of 2016. In parallel between I started investing in various stocks within a direct investing account at my bank but was always below the maximum. It wasn't until 2017 that I maxed my TFSA contributions.
> 
> I have used it as a trading account with both winners and losers.
> My wife's account is a better story. Hers was maxed out a little earlier than mine (2015 I think) and had a small amount in it before that. but she did just simple couch potato with E-series funds. Over time there were times I had more after some of my stocks did well etc. But generally she tracked around the same as my account (currently ahead slightly).
> ...


Thanks! We have been contributing since 2011 and maxing out our amounts each year. We've never taken out any money. We have been investing in cdn stocks like bank stocks, telcos and insurance companies. Our performance doesn't match what both of you have achieved and got me wondering if we need to review our strategy... Was also thinking switching everything to vegt as well. Not sure if my TFSA performance is average for being able to max things in the past 10 years. Need to look into calculating my returns


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## Money172375 (Jun 29, 2018)

nobleea said:


> Our kids are a bit younger 7, 5, 3. We have 80K in our RESP.
> I expect cost increases on post secondary to outpace regular inflation by a good chunk over the next 20 years. I think tuition and books (no rent) would run around 20K/yr for a university when your kids start university.
> For those that have full RRSP and TFSA, RESPs can just be one more part of family investments to maximize values.


I thought 20k a year all in for university would be enough. Now, we’re finding tuition alone can be $20k in some high demand programs.


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## AlwaysLearning (Dec 8, 2017)

*Mid October 2022 update*

I was doing much better earlier in the year. Have made some good progress on the mortgage as interest rates increase but overall am about where I was last year... Kind of tough given all the extra income and bonus etc. just keeps me from sliding backwards...

*Assets:*
House $1,200,000 
Cars $36,000
Joint account $12, 778

*My accounts:*
Unreg $71,517.11
TFSA $158,990.57
RRSP $223,327.37
LIRA $140,468.25
Company Stock $31,642.98
Cash/emergency $6,838.21

*Wife’s accounts:*
Unreg $47,022.00
TFSA $136,027.00
RRSP $120,153.00
DB Pension $160000 
Work savings plan $5,464.00

Kids RESP’s: $64,176

*Liabilities:*
Mortgage: $116,605

*Family Net Worth $2,294,643
Investable Assets $994,470*


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