# 24, Journey starting to build my portfolio!



## MDavey (Jan 15, 2016)

Hello everyone!

I joined this forum a few days ago and have been going through posts and learning as much as I can from everyone! 

*My Background:* I am 24 and from the GTA. After high school I spent two years in school for music and was graciously given the opportunity to work in the trades. Starting salary was low and my "being frugal" mentality was much lower. Fast forward to 2 years ago and I found "The Wealthy Barber" on a bookshelf. I read through it in a day (couldn't put it down) and it changed my entire outlook on finances. I decided to work hard, pay off debts and buy myself a home! I made 123k that year and invested enough money to purchase my first home. I decided to renovate the basement (using skills learned in the trades), and to rent out 2 rooms to students to pay off the renos. I now sit a year and a half(almost) into my first home ownership and have a new tenant moving in for the full home for April 1st, as I look for a second home to move in and hopefully renovate/rent. 

I strayed off investing a little the first bit of home ownership, between unforeseen issues, costs, new furniture etc. But stuck to my work pension contributions... Here's my not yet very diverse portfolio thus far..~

*First Home:* 
Purchased for $340k, 
Renovated for $11K, 
Appraised at $400K,
Current Mortgage $317k

Equity in house: $83k/ Almost 21%

*Work Pension:*
Started May 2014
Currently: $14.5K 
_Side Note: This has taken a bit of a s-kicking lately... It was at $15.2k a week ago_

*RRSP:*
Initial: $800
Currently : Fluctuates ~$1000

*Liquid Cash:*
Currently: ~1,000
This is soon to be going up since my debts are paid off and I'm in full save mode.


My current goals per month of savings...

*Income:*
Base work income: ~$4,600/mo after Tax
Averaged income w/ OT/DT (We work lots of overtime): $6,600-$8,000+ /mo
_Income Changes: I have a raise coming next month of ~1.00. In 4 months I'll be making 20% more with my full license_

Current tenant income: $1100/mo
April tenant income: $1,800/mo 

TOTAL April Income no OT : $6,400
TOTAL April Income w/ OT: $8,400-$9,600

*Bills/Etc:* _This is for April once my tenant has moved in_
Cell Phone: $60/mo
MISC_(food, going out, lessons, purchases)_: $600/mo
Backup/emerg: $200/mo
OSAP: $100/mo
Landlord Insurance: Quote Coming Soon
Mortgage: $1600/mo

TOTAL : $2,560 (sans insurance)

I am grateful to have a work truck that covers gas/insurance etc and being able to move back to my parents house for free (side note: Mom's Italian... Can't wait for that cooking!)

*SAVINGS:*

Income no OT - Bills = $3,840
Income w/ OT - Bills = $5,840-$7,040

These extra funds I'm going to put straight in savings/find a low risk investment and with extra money each week from the MISC fund I am going to gamble with higher risk ETF/MFs.
I have the option to live at home for as long as I want (Italian Mom, never wants me to leave!), but ideally I am looking to move out after 6 months of saving up. Which means I should
ideally have around $23,040 w/out OT or $35,040-$42,240 saved up, not factoring in the 20% raise. 


*END GOAL:*

This is where I have been trying to read as many success (as well as the opposite) stories of what to do. I was originally thinking of buying another home in 6 months (starting April) for ~$300k and renovate/live in and flip or rent... or invest it somewhere and keep saving... I am open to constructive criticism! 

I have been seeking mentors as well to help with this but I have no clue where to start finding them! :upset:


I appreciate and will take any help and criticism! Let me know if you think this is crazy, a great idea, if I've done horribly or maybe a smidgen of success! I'm very easy going and like hearing the opinions and stories of others!


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## MDavey (Jan 15, 2016)

*Can't find edit!*

Apologies for the double post... I can't find the edit button!

My OSAP is currently around $4000 (getting statement within next month!) and I usually get a tax return from it of $200-$300.


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## Moneytoo (Mar 26, 2014)

Welcome to the forum!  I'm twice your age (with not much to show for it lol), was obsessed with buying an investment condo two years ago (after we paid off the mortgage on our Toronto house), but husband really hates debt even more that the idea of becoming a landlord, and suggested that I'd better focus on our neglected for years RRSPs. So now I'm obsessed with saving and investing - with a bit of gambling to keep it fun: http://canadianmoneyforum.com/showthread.php/62561-What-are-you-buying-Notes-over-Volatility 

If you're looking for a RE mentor, it sounds like *Just a guy* is your guy: http://canadianmoneyforum.com/showt...s-HouseAggedon?p=975666&viewfull=1#post975666


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## MDavey (Jan 15, 2016)

Thanks Moneytoo, I appreciate it!


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## Davis (Nov 11, 2014)

You're off to an excellent start. I started saving at 26, and aimed to retire at 52. I overshot, and will retire in April at 50 with more money than I expect to need, and I can bring my wonderful husband into a comfortable retirement with me. It's hard in your 20s to plan for something so far away, but my friends who are my age are all now regretting not having started as early as I did as they talk about their next eight, or nine or more years of work. Good luck on your journey, and keep your eye on the ball. 

And stop buying mutual funds. They're just too expensive.


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## PrairieGal (Apr 2, 2011)

I think you are doing great, especially for your age. Just a reminder to keep all your receipts for anything related to the two rental units as you are going to need them to do your taxes. 

You should google Mr. Money Mustache, if you don't know about him already. And there is a forum on his website with a real estate section. Lots of people there that would be willing to help you.


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## MDavey (Jan 15, 2016)

Davis said:


> You're off to an excellent start. I started saving at 26, and aimed to retire at 52. I overshot, and will retire in April at 50 with more money than I expect to need, and I can bring my wonderful husband into a comfortable retirement with me. It's hard in your 20s to plan for something so far away, but my friends who are my age are all now regretting not having started as early as I did as they talk about their next eight, or nine or more years of work. Good luck on your journey, and keep your eye on the ball.
> 
> And stop buying mutual funds. They're just too expensive.


Thank you very, very much! Congratulations on your soon-to-be-retirement... That would be a great feeling - Knowing you can retire without going back to work, and doing it early! I agree... Thankfully after reading through money books I found the importance of Compounding Interest and making it work for you. 

Haha, what's wrong with mutual funds?? I am still relatively new in the game!


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## MDavey (Jan 15, 2016)

PrairieGal said:


> I think you are doing great, especially for your age. Just a reminder to keep all your receipts for anything related to the two rental units as you are going to need them to do your taxes.
> 
> You should google Mr. Money Mustache, if you don't know about him already. And there is a forum on his website with a real estate section. Lots of people there that would be willing to help you.


Thank you! Great advice and 100%... Ever since I was a kid my parents always pushed me to keep the receipts for everything - turns out it was a good habit to get into! 
I will definitely go and check it out - thanks for the suggestion!


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## Davis (Nov 11, 2014)

Something like 85% of mutual funds have worse returns than the stock market index. This is largely because mutual funds cost a lot to operate - managers, advertising, distribution costs. The result is that mutual funds take between 1% and 3% of assets in a year to cover their costs. 6% return is the stock market isn't bad, but that means a mutual fund is only going to be able to return 3-5% after fees are deducted.

Exchange traded funds just buy the stocks that are in the index - no managers to pick stocks. You have to buy them through a stock broker (or a discount broker), so it is a bit more of a hassle, but their fees are typically 0.1%-0.5% per year.

You won't beat the market, but your investments won't perform worse than the market like most mutual funds do. 

An exception to this general rule is TD e-series index mutual funds, whose fees are lower than most other mutual funds, although not quite as low as exchange traded funds (ETFs).

Check out vanguardcanada.ca and blackrock.com/ca who are two of the big ETF sellers.


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