# Gladaki Money diary



## gladaki (Feb 23, 2014)

Immigrated to this country few years back with nothing. Started working 2 years back
Found a beautiful girl and got married last year. She will be in school till March 2016 so no income from her side/

About me
Age:32...in Alberta
Gross income:75k$
RRSP contribution :12 % of my income (Started from April)
After Tax and RRSP deduction:3816$
Monthly expenses:2816$


Current Liabilities:
Credit Card Debt : 1700$
Car Loan:18750$ ( 7.5 % interest on it for 5 years ).Got loan of 5000$ from wife and 1000$ from sale of old car so it will soon be down to 12750$.
Total:14450$

Assets
International Investment: 1200$ (Getting 9% interest on it)
Tangerine saving account: 2835$
Index Investing:TFSA:1200$

Goals till 2015 November. 
1.Pay of my car loan before November 2015 by contributing 700$ extra every month.
2.Contributing Maximum to RRSP will be achieving goal of 11000$, all this money will be in TD E series self directed RRSP. My company not a very good pay master, Contributes 50% of 3% of my salary.
3.I will be contributing 300$ per month to my tangerine saving account to create a emergency fund of 6435$.

My Expenses:




Rent1000Gas300Car insurance157Car Payment380outing200Bus pass95Groceries475Home insurance20Phone bills65Shaw cable + internet + landline100Net Amount2816

I will also maintain this diary as my workout diary  so I can have both progress at same place.


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## Janus (Oct 23, 2013)

First impression is that with a 75k income you should be doing fine going forward. That said, why on earth would you buy a $20,000 car with debt? If you can't afford a car, don't buy one - you can get a good used japanese car for under $10,000. The extra $8-9k could be in an ETF instead of racking up high-interest debt.

Kill that car debt ASAP! That interest you're paying is higher than long run stock market returns.


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## SkyFall (Jun 19, 2012)

wow your car insurance is expensive!


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## My Own Advisor (Sep 24, 2012)

re: Goals till 2015 November. 

1.Pay of my car loan before November 2015 by contributing 700$ extra every month.

Good call, kill high-interest debt first.

2.Contributing Maximum to RRSP will be achieving goal of 11000$, all this money will be in TD E series self directed RRSP. My company not a very good pay master, Contributes 50% of 3% of my salary.

If you can max out your RRSP contribution room, that is GREAT!

3.I will be contributing 300$ per month to my tangerine saving account to create a emergency fund.

Keeping a few $k in an emergency fund is a smart call. The reality is, life happens, cars break down and so do things around the house. Paying off those emergencies in cash is a nice feeling, no extra debt.


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## techcrium (Mar 8, 2013)

Janus said:


> First impression is that with a 75k income you should be doing fine going forward. That said, why on earth would you buy a $20,000 car with debt? If you can't afford a car, don't buy one - you can get a good used japanese car for under $10,000. The extra $8-9k could be in an ETF instead of racking up high-interest debt.
> 
> Kill that car debt ASAP! That interest you're paying is higher than long run stock market returns.



Majority of people with half that income buy a $20,000 car as well...


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## Pigzfly (Dec 2, 2010)

SkyFall said:


> wow your car insurance is expensive!


Not really. Also, if you don't have a domestic driving record, the insurance can be absolutely awful. I know an Irish family that's saddled with something like $4000/year for a used mini-van, because the insurance companies won't accept each other's paperwork.


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## gladaki (Feb 23, 2014)

finally got my insurance to 135 per month. With deductitle as 1000 instead of 500. Also my wife is a second driver.


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## Underworld (Aug 26, 2009)

I also travelled to Canada with nothing exactly 8 years ago. All I brought with me was some clothes and some photos.
I've now got a house and basement full of crap! lol


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## scorpion_ca (Nov 3, 2014)

Have you tried Johnson Insurance? When I was looking for my first auto insurance in 2009, I contacted almost 40 insurance companies/brokers and got lowest quote from Johnson. Since then I am with them and I compare their quote with others every year and still their premium is lowest for me. But one of my relatives got lowest quote from Western Direct insurance.



gladaki said:


> finally got my insurance to 135 per month. With deductitle as 1000 instead of 500. Also my wife is a second driver.


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## gladaki (Feb 23, 2014)

I took my car loan from Credit servus they have tie up with Johnson insurance, I guess with APPEGA discount its cheaper for me


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## gladaki (Feb 23, 2014)

Change of 2015 Plans:
Goals till 2015 November. 
1.Pay of my car loan before November 2015 by contributing 700$ extra every month.
I am thinking of putting that Money in some Oil and gas shares. Once market is up, I will contribute towards extra payment of cars. Thinking of picking WCP & GIBSON in my TFSA. May be SUNCOR & CNRL if low continues for longer.

2.Contributing Maximum to RRSP will be achieving goal of 11000$, all this money will be in TD E series self directed RRSP. My company not a very good pay master, Contributes 50% of 3% of my salary.
Still on it.

3.I will be contributing 300$ per month to my tangerine saving account to create a emergency fund of 6435$.
Already have 3k$ in emergency fund which I guess is good for now

4.Wife is going to Ivey business school for a year. Which means have to help her with expenses which will be 1000$ per month ..will have a tough one year ahead..Good thing is she got 70k$ scholarship so atleast wont have to
worry about student loan.


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## james4beach (Nov 15, 2012)

Great idea with the emergency fund. This is vital, and much more important than investments to try and earn high returns.

I take it from your Alberta engineering association membership that you work somewhere related to the energy industry. Does your income relate, somewhat, to the energy industry? Including if you provide professional services that are mainly consumed by the energy sector.

I ask this because I believe *it's a bad idea to make investments that are concentrated in your field of employment*. Here's why: it amplifies your risk exposure. If the good times roll, then it's great... your investments perform well, and your income stays solid. However if the sector's fortunes reverse (as they appear to be now) then you have amplified your exposure: your investments crash, *and* you lose your job.

i.e. when it's good it's really good, and when it's bad, it ruins you.

For this reason, I do not recommend investing in an area that is correlated with your employment and income.


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## james4beach (Nov 15, 2012)

Another thought. Alberta has a boom-and-bust economy, historically. These cycles can be quite intense in Alberta.

One of the consequences of this economic pattern is the particularly high incomes that you can earn in Alberta. _The high income compensates you for this boom-and-bust volatility_ -- if you manage your cashflows well. I think you should be particularly conservative in your investments due to the nature of your industry. I'm an engineer as well, and I learned this from others in my field (who have been working in western Canada much longer than I have).

Not to scare you, but boom-and-bust means that you will likely have some periods of unemployment. Expect it. If you build a large cash buffer, you can handle this much easier. Again remember that your high income is compensation for expected periods of unemployment and poor earnings. If you just pump all your income into stock investments, you will face very tough times when you lose your income --- because you can't simply liquidate stocks. If you liquidate stocks, you ruin their ability to earn long-term returns.

There are many warning signs in the energy industry. Smaller companies with less solid credit ratings are seeing their financing costs soar through the roof and are even losing their ability to borrow money for new projects. Commodity markets as a whole are in absolute freefall.

Please, be careful ... if I was working in Alberta, I would be hoarding cash these days and building a very solid emergency fund, because the probability of layoffs is rising.


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## gladaki (Feb 23, 2014)

gladaki said:


> Immigrated to this country few years back with nothing. Started working 2 years back
> Found a beautiful girl and got married last year. She will be in school till March 2016 so no income from her side/
> 
> About me
> ...


Updating my Diary after 2 years


TFSA : 3500 $ (Some stocks all in red, CWB,ESI,HPS.A)
RRSP:27000$ (All TD E series)
International Account : 2500$ (9% interest on INR )
Debt:0 (2 year back, I was in debt of 20,000$ Car loan, thanks to MoA for motivation to finish it by Nov 2015)
Emergency Fund:0 
I had two vacations this year : Mexico & Thailand ..so quite a bit money spend on that side. 

Debt: 10000$ (Wife just finished her MBA school)(0.5 + prime)

Target by Dec 2016
Emergency Fund:3000$ (Increase of 3000$)
International Fund:5500 (increase of 3000$)
RRSP:40,000 (increase of 14,000 from 26,000)
Home Fund:14000$ (From 0 to 14000)

I am very inclined towards start indexing in TFSA ..But I have intentions to buy home may be 1.5 year from now so I guess, its better to hold Cash..Hopefully once My spouse start working
we will able to come up with good downpayment. My budget for first home is close to 300k$, Hope calgary has some good townhomes in that range in future. With salary freeze from last two year in
oil sector its very uncertain what happening in future. 

My wife has still unused loc of 50,000$, Is it a good idea to just borrow 10,000 from her and invest in some strong bank stock like BNS (5% yield and pay off the loan in 10 months).
Its like getting 5% atleast for next one year

I will try updating more in future. Thanks to all CMF members, learned a lot here.
Thanks


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## Video_Frank (Aug 2, 2013)

You can hold cash in a TFSA. For example, People's Trust offers 1.75% for cash within their TFSA.

Nice work paying your car debt off.:smile:


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## peterk (May 16, 2010)

james4beach said:


> Another thought. Alberta has a boom-and-bust economy, historically. These cycles can be quite intense in Alberta.
> 
> One of the consequences of this economic pattern is the particularly high incomes that you can earn in Alberta. _The high income compensates you for this boom-and-bust volatility_ -- if you manage your cashflows well. I think you should be particularly conservative in your investments due to the nature of your industry. I'm an engineer as well, and I learned this from others in my field (who have been working in western Canada much longer than I have).
> 
> ...


Good historical words James. I'm starting to regret my huge investments in the oil industry, and am trying to vow to not add any more (it's hard) in the future. I supposed I could always get out, but it feels much too late for that now and not a good time to be selling oil stock... Hopefully things turn around, but if they don't I have to be prepared for the worst. Right now my cash cushion is down to 70k. I'd like to get that up closer to 100k so that I have a solid 3-5 years of emergency money, just in case.

At least I don't own a $700k (now 600k and falling) house... you neither Gladaki - good save! Ever since moving to Alberta at the start of 2013 people have been pressuring me to buy a house. Family, friends, and especially co-workers. I imagine for you it's been even worse since you're a few years older than me and married. Perhaps the housing market will bottom out in 2017 and if you can manage to hold on to a good job it might be an excellent time to get into Alberta real estate.


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## scorpion_ca (Nov 3, 2014)

Would you mind to share your wife's experience about completing MBA? How did she choose the school and is she satisfied with that school after completing the MBA ? Was it part-time or full-time? What was the major and how is the job prospects? Does she regret or feel accomplished now? 

The reason I am asking all the above questions is that someday I wish to pursue MBA in Finance.


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## james4beach (Nov 15, 2012)

peterk said:


> Good historical words James.


Thanks, hopefully this helped someone. I know it's very tempting to invest personal money in your own industry 



> I'm starting to regret my huge investments in the oil industry . . . Right now my cash cushion is down to 70k. I'd like to get that up closer to 100k so that I have a solid 3-5 years of emergency money, just in case.


Your emergency cash sounds pretty good... 3-5 yrs worth might be overkill. Currently I have 3.0 years expenses in cash and it feels a bit high to me. Besides, when you have a GIC ladder they will mature _at least_ annually to help replenish your cash, if you need it.


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## gladaki (Feb 23, 2014)

scorpion_ca said:


> Would you mind to share your wife's experience about completing MBA? How did she choose the school and is she satisfied with that school after completing the MBA ? Was it part-time or full-time? What was the major and how is the job prospects? Does she regret or feel accomplished now?
> 
> The reason I am asking all the above questions is that someday I wish to pursue MBA in Finance.


MBA is worth if you have some experience b4. I think
two best places for MBA is queens and IVEY for 1 year MBA, it saves opportunity cost though fee is same whether you go for 1 or 2 year program.

I dont think she regrets it, since she got 65k$ in scholarship and at the time of graduation she will
have only 10k$ in debt (Her LOC)..Finance and consulting has excellent placement from above two schools.


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