# Diary of a (still) young man



## youngdad3 (Jun 29, 2013)

*About myself*
Currently 29 years old, soon to be three-times-father (last one) in 1 month.
started litterally from scratch at 18yrs old when we had our first son,
decided that welfare and food coupons was not the life I wanted to have
so I fighted and never stopped since then.

Assets:

*Banking:*
Checking accounts (2): 9000$
HISA account: 11,000$
ING - TFSA GIC: 10,000$
ING - RRSP GIC: 15,000$
TD - TFSA HISA: 3,000$

*Trading:* 
Non-Registered account: 27,500$
TFSA Account: 12,500$
RRSP Account: 11,000$

Current home: 380,000$

Assets total: 479,000$

Liabilities:

home mortgage: 77,200$ (3.19%, maturity Jun2015)
Car loan: 665$/month until nov 2015
credit card balances: none

Current networth: 401,800$


My goal is to be Financially Independant by 2020 and here are the 3 steps I want to accomplish to achieve it:

1- Pay off that mortgage by the time it gets to maturity
2- Limit spending to 25,000$/year
3- Buy&hold&drip strategy with dividends stock

first step is doing well, I've put about 40k$ on my mortgage for the last 2 years so it shouldn't be a problem for the 2 years to come.
second step still needs some adjustments, I've been in a material-accumulation phase for the last couple of years (including a luxury-car loan I'm stuck with)
but it seems to be coming to an end and I actually envoy more to get rid of something than buying a new toy that won't make me happier in the end.
third step is what I'll be working for the next years, I'm currently earning ~2900$/years in divy's and interest, which is about 10% of my ultimate gold (WOOHOO) but I feel like my portfolio isn't optimal right now. I'm debating whether I've got too much cash sitting in GICs in a rising market thus loosing opportunities or I should still wait for the next correction before going all in. All comments/suggestions welcome!


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## Yoqui (Mar 5, 2013)

Wow that's pretty amazing for 29 yrs old. I think we'd get a better understanding if you told us your income from your career. 

Imo, as you said you are still young, you should have a lot more in the markets. A rule that I like just because it's easy to understand is that your age should be the percentage of how much you allocate in to savings, so 29 yrs old you should have 29% in banking accounts, though in the end it's how ever much you feel comfortable with. In the long run markets rise (hopefully) so you shouldn't be gambling on a correction. And you don't have to go all in now, putting more in the markets in increments is much better for the mind.


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## kcowan (Jul 1, 2010)

You have to decide whether you want to learn about trading. It is a lifelong endeavour. Meanwhile buy a worldwide ETF. You main decision will be how much C$ and US$ to allocate. This will take the pressure off. Congratulations, you are doing well.


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## youngdad3 (Jun 29, 2013)

thank you for your kind words.

As for income, while I've had good years in the past, I'm in the PC business, and as you all know it's currently in a declining trend, so I expect it to decrease to 80-100k/yr in the coming years (hell maybe even less, hard to predict). That's partly why I'm focusing right now on paying down the mortgage (the monster as I call it) because I feel like I'll have a half-a-ton relief of pressure as soon as it's over. 

I've been "playing" in the markets since 2008, in fact my first buys ever where near the very bottom. The problem is, they were NEAR the bottom, So I found it pretty scary when I bought 100 TD shares @ 39,50$ and next thing I see is they are 35$. Same when I bought 200 MFC @ 12.40$ and then they were down at 9.5$. I then sold most of them as soon as they were back to the levels were I bought them so you can imagine I missed some great opportunities. I had a 50k$ portfolio at TDW (just enough for 9.99$ fees) it went up to 60k$ then got back to 53k$ because I lost about 7k$ in another newbie move involving a yellow overleveraged income trust that converted into a corporation. I then decided I had enough and sold all my positions. 

In fact I just got back into the markets a few weeks ago and recently bought D.UN, T, BCE, SLF, CM with the intention of holding them. No more "playing" this time around.
I know I should look at ETFs but to be honest I find them boring, to me there is much more pleasure in holding directly some shares of a company then through an ETF. I've only got some bonds ETFs right now (XCB and CBO) and I'm having a hard time not to pull the trigger on the sale button on those ones ..

As for USD vs CAD allocation, my intention is to stay on canadian markets right now because
1- I've already put 10K$ into my RRSP this year, so I'll wait until next year to add more and I would only buy dividend-paying stocks so i don't want to be paying witholding taxes
2-I see it more risky to buy on US markets because on top of the up and down of the markets risks you've got the currency risk. I still don't understand why the USD is holding so well with all the money that was printed through the various QE programs. Guess I have much more to learn about global economy


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## youngdad3 (Jun 29, 2013)

Just a little quick update to my situation 1.5 years later.

1- I'm on track to pay off mortgage by march-april 2015 which is 2-3 months before maturity. Current balance is 22k$. I can't wait !!
2- The bmw car loan is gone and was replaced by a cash-purchased 3 years old toyota
3- Spending is not that great though, at 99k$ for the year, including mortgage payments and car purchase. It should be better next year.
4- I just crossed 5k$ in forward 12-month dividends payments at 5034$ !! I'm slowly getting there ...

Aiming for FI by 2020


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## james4beach (Nov 15, 2012)

youngdad3 said:


> I've been "playing" in the markets since 2008, in fact my first buys ever where near the very bottom.


That's great; sounds like you got lucky. Nobody can time the bottom in a market and it's a great experience if you happen to get in near the bottom.

If that was your first experience with the stock market, you probably developed an unrealistic and over-optimistic view of "how easy it is". Beware of this bias; markets are not always in bull phases.

If we enter a bear market, and especially if you make some big purchases near the top, you will discover how difficult and ugly the stock market can be. History has shown that stock indices can sometimes go nowhere (or even decline in real terms) for periods as long as 10 to 20 years. And if a prolonged decline begins, you will find that it feels very different. Every trade you make ends up losing money. You chronically under-perform, etc.

I'm just saying, watch out for a false impression you may have gotten about how "easy" the stock market is.


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## youngdad3 (Jun 29, 2013)

@james4beach: Yes thank you. In fact it did not go all that well. I got burned in 2011 chasing high yields with Yellow Media and lost my 1000 shares @ 5.65$ea. Not such a big amount but it did hurt at the time and I sold everything else I had back then. Naturally I lost quite a few opportunities along the way so right now, even though the market seems highly valued to me, I prefer to stay in rather than lose another potential market appreciation.
My main strategy now is to buy long term dividend hikers (financials, some utilities, some telecom) and honestly I'm more thrilled by a dividend increase than a paper gain which is a little irrevelant because I don't intend to sell anything in the next few years. I hope I would feel the same way should a market correction occurs. A paper loss is no different than a paper gain. It is not real until you hit the sell button :hopelessness:

Also, having some income is great but perhaps the most important part towards my goal of being FI is to reduce spending. I learned not so long ago that money in fact does not buy happiness.


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## Westerncanada (Nov 11, 2013)

Great to see all the focus and hard work paying off..

on a side note, love D.UN.. great fund, very undervalued right now and the DRIP is buying me 5-6 shares more per month and climbing!


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