# Freedom 55 - 5 million networth! Possible?



## bigmoneytalks (Oct 3, 2014)

Hi all,

Looking for your thoughts as we shift things in gear to ensure freedom 55 comes to reality! I will post updates to keep me accountable.

*Age*: Both wife and I are 40. We have two perfect boys (yes rare), 5 and 8.

*Family income:* $400,000 on average (I am in sales so my income can range from 200k to 400k depending on years. Wife is a steady 85k)

*Assets* (approx. values):

My RRSP: 350,000 (ETFs)

Wife RRSP (Including LIRA): $120,000 (ETFs)

Spousal RRSP: $85,000 (ETFs)

My TFSA: $122,000 (ETFs)

Wife TFSA: $135,000 (CDN Stocks)

My non-registered: $153,000 (Includes ETFs and some RSUs and Stock options)

My Wife’s non-registered: $5,000 (Crypto …just for fun)

Savings: $81,000

Total Investable assets: $1,051,000

House: ~1,000,000 (same home is selling 1.25M but trying to be conservative)

*Total Assets (inc home): $2,051,000*

*all RRSPs and TFSA maxed out, except for my wife’s RRSP, she still has about 40k in contribution room (we are trying to narrow that down by using most of her income while I pay the majority of the expenses)

*Liabilities:*

House: $150,000

Car: $20,000

*Total: $170,000

Net worth: 1,881,000*

*Did not include our RESP of $47,000 since this money is for my children and not part my retirement plan. Also, I did not factor my car as an ‘asset’ even though it technically holds value. Cars simply depreciate so I don’t include them but will include them in my liabilities because it impacts my cash flow. I also have a sports car that holds value (a corvette that I barely drive) that I will keep in the family. I will never sell it! I am a car guy.... Thankfully, we don't have any other debt other than above.

*Goals:*


Age 45 – have 1.5 million in investable assets. Not including the home. 
Age 50 – Have 2.5 million in investable assets. Not including the home. Compound growth and high income should help
Age 52 – Semi retire with 4.5 million in net worth (hoping to do some consulting by then) including the home
Age 55 – Retire with 5 million in net worth. Sell the current home and downsize. Looking at 140k income until 65 when benefits kick in and adjust.
Need to achieve an average 6-7% return across all assets as per calculator (not factoring contributions and dips in the market, just as a guide):










*Strategy:*


Cut down my expenses as much as I can. We have high incomes and we think we can do better with our budgets. We have too many subscriptions we don’t need. We eat out too much, “I” drink too much (nature of my job) etc. Move towards 50% of earned income to investments. Yes very aggressive.
Ensure I stay on course with high-paying employment opportunities. I switch jobs every 4 years since sales reps normally plateau on their earnings so always on the hunt for bigger opportunities. I might have bad years where pulling much lower incomes, but I think I can still achieve my goals if I stay invested and cut down our expenses.
Pursue aggressive growth investment strategy of 80% equities and 20% bonds/fixed income until age 50
At age 50, move towards 60/40 split
At age 55, move towards 50/50 split 
* 

Risks:*


Losing my job is the obvious one and staying invested
Wife pressures me to upgrade my current home, big expense to move into another home. Might impact our investment goal
Market crashes or long bear markets
Family concerns (elderly parents, etc.) I must work on a plan to navigate these concerns as my parents are broke and might need help (financially) in the future.
 

I’m sure there are questions on my points above so feel free to ask and I will elaborate. Thoughts?

This has been fun outlining all of these points. Makes me motivated!


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## mind_business (Sep 24, 2011)

I started a diary thread 10 years ago. I just posted a new thread with an update now that I've reached 55. Our situation is different than yours since we've always only had 1 income, making it much more difficult to save. But, in the end, we reached our goal of $2,000,000 minimum in Net Worth. I'll likely work for 3 more years to give us a bit more cushion. 

From your list of 'Risks', you seem to be reasonably aware of the curve balls that life can, and will, throw at you. But your current income should allow for you to reach your goal with relative ease. I'd say you're probably underestimating your projected net worth at 55. 

Thanks for posting your situation. It provides inspiration to those at your similar age range. Good luck in your financial journey.


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## bigmoneytalks (Oct 3, 2014)

mind_business said:


> I started a diary thread 10 years ago. I just posted a new thread with an update now that I've reached 55. Our situation is different than yours since we've always only had 1 income, making it much more difficult to save. But, in the end, we reached our goal of $2,000,000 minimum in Net Worth. I'll likely work for 3 more years to give us a bit more cushion.
> 
> From your list of 'Risks', you seem to be reasonably aware of the curve balls that life can, and will, throw at you. But your current income should allow for you to reach your goal with relative ease. I'd say you're probably underestimating your projected net worth at 55.
> 
> Thanks for posting your situation. It provides inspiration to those at your similar age range. Good luck in your financial journey.


Thanks much appreciated. I know we tie our goals to a financial number but it's all about the journey getting to your goals. It builds character and wisdom. I for example haven't considered investing seriously until I was 28 or 29. I had zero knowledge of how all this works. But with forums like this, and the wealth of information on the internet, anyone can do it. But boy...I wish I had this mindset when I was 18!


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## mind_business (Sep 24, 2011)

bigmoneytalks said:


> Thanks much appreciated. I know we tie our goals to a financial number but it's all about the journey getting to your goals. It builds character and wisdom. I for example haven't considered investing seriously until I was 28 or 29. I had zero knowledge of how all this works. But with forums like this, and the wealth of information on the internet, anyone can do it. But boy...I wish I had this mindset when I was 18!


Everyone wishes they can go back in time and kick their 18 yo selves in the butt. I wouldn't worry about starting investing in your late 20's. That's WAY earlier than most people.


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## scorpion_ca (Nov 3, 2014)

bigmoneytalks said:


> *Family income:* $400,000 on average (I am in sales so my income can range from 200k to 400k depending on years. Wife is a steady 85k)


Would you care to share more about your career? What do you sale? Yearly $200k to $400k a lot of money. What would be your suggestion if anyone wants to follow your career path?

What is your asset allocation? What type of ETFs do you have?


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## bigmoneytalks (Oct 3, 2014)

scorpion_ca said:


> Would you care to share more about your career? What do you sale? Yearly $200k to $400k a lot of money. What would be your suggestion if anyone wants to follow your career path?
> 
> What is your asset allocation? What type of ETFs do you have?


I am tech so I sell software. My suggestion is if your new to software sales, get in at a start up as a business development rep. It's grunt work for sure and you won't make big bucks but that will come with time. I have almost 20 years selling software and the past 10 years I started making the big bucks.

It's not easy. I don't make a sale and go golfing for the rest of the day like most people think of sales. It's hard work, lots of travelling and there are a lot of ups and downs. The pressure is intense. (I struggle with anxiety, a symptom of the job..but the money keeps me going)

You can make a lot of money but if you miss your targets in a month or quarter, your gone. Not everyone makes it big. The 80/20 rule is evident but with experience, it gets easier...and I am example of that. I know what deals are worth working on and ones that are not. Also, with experience, you build a strong network of contacts so if a job isn't meeting your earnings expectations, you just move on to the next opportunity you can find.

Lastly a business degree helps. There is an art and science to the profession. You can be a smooth talker but if you don't know how build the business case backed with the ability to quantify value, you're toast. Generally, finance and marketing courses are ideal areas of focus.
Hope this helps.

I'm 80 percent equities and 20 percent bonds.
Equities: vgro, xaw, xic, zre VTI, vxus, and zcn, BNS, SLF,BCE and ENB.
Bonds: zpr and xbb split 50/50


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## james4beach (Nov 15, 2012)

Congrats on the super high income @bigmoneytalks



bigmoneytalks said:


> I'm 80 percent equities and 20 percent bonds.
> Equities: vgro, xaw, xic, zre VTI, vxus, and zcn, BNS, SLF,BCE and ENB.
> Bonds: zpr and xbb split 50/50


Just beware that ZPR is more like equities, not bonds. So if you're counting ZPR as part of your bond allocation, you're probably actually over 80% equities.

Here's a chart demonstrating why ZPR is equities. This is an overlay of ZPR and the TSX Composite. They crashed together and then rallied together.


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## bigmoneytalks (Oct 3, 2014)

james4beach said:


> Congrats on the super high income @bigmoneytalks
> 
> 
> 
> ...


You're right. I might have to adjust that. I was looking at zpr based on the income it provides...


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## Juggernaut92 (Aug 9, 2020)

Good stuff. Thanks for sharing your job situation as I was going to ask about it as well.

I think 6.5% a year for the next 15 years is quite doable and you look to be in quite a good position. 

I think if you declutter your expenses then you should be able to pay for everything (family, housing, etc) with just the low end of your salary and then throw the rest into investments.

Last thing I would say is that if you have time then look into reading a book called "your money or your life". Very interesting book about the role work/money plays in your life. Also, it will most likely help you declutter any expenses you do not need.


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## bigmoneytalks (Oct 3, 2014)

Juggernaut92 said:


> Good stuff. Thanks for sharing your job situation as I was going to ask about it as well.
> 
> I think 6.5% a year for the next 15 years is quite doable and you look to be in quite a good position.
> 
> ...


Thanks. Will look into that. I enjoy reading so looking for my next book. We've been spending too much these past two years. Blame it on COVID but it's important for us to make sure our expenses are reasonable. My income isn't consistent and I may have some bad years so better to establish good habits now.


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## Letran (Apr 7, 2014)

First of all Congratulations!!!. It takes discipline, vision and drive to achieve what you currently have. You could lose all your wealth tomorrow but you will still have those qualities. 
Secondly, you will be fine.
Thirdly, In a few short years you will come back and with an adjusted retirement goal of 10 million.

Have fun its not all about the destination. the journey getting there is fun too. Cheers


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## Ponderling (Mar 1, 2013)

The big danger in my eyes for your situation is the temptation with big sales income is to live big as well. 

That can be a long term wealth killing habit. 

I started working after graduating uni broke but with no debts 32 years ago.

Since the first pay I have always put something aside. Even when first married and with wife at home with kids I made full rrsp contribution, and saved. 

As I got raises I saved them ( or made annual payments against outstanding mortgage balance) and kept the life style pretty much the same. 

Combo of saving before buying a house, buying a not too big for us house, aggressive paying a not too big mortgage had the house paid off in 10 years. Never got tempted for a vacation property or boat, etc. Then acted as though the house payments were still there but steered the same money monthly, and raises beyond that into equity investments. 

Now I am 55, was making $145k gross a year before I decided that working 3 days a week felt better if I want to keep at it for a few more years. Wife, 56 is early retired 4 years already after leaving a $52K gross a year job. . We have invested assets of $3M, and house worth north of 1M. But we still live on spending $75K per year, plus any retirement savings. That is up from $60K a year when kids were younger. 

my 2 Kids family RESP peaked at $190K. They are nibbling at post sec school until COVID fades and full time in person learning gets going again.


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## Ponderling (Mar 1, 2013)

I also second the getting older but still very real Money or Life. as a life changing book. Another is 'How Much Is Enough' by McCurdy. 

Also a good idea is time value of money. 
Works like this: Add up all your core annual living expenses, all investment saving goals, all taxes, etc. Then subtract them from your gross. The spread is your mad money.- disposable to spend as you want.

Now divide that the mad money by the number of hours you work in a year. Idea might have cone from the first book 

So then say you want to buy something that costs $500. Big picture you say 'I make a ton - who cares, buy it.
But from this calc you see that this might translate to what is the mad money that comes fro working for say 10 days. 

Then the thing is not "just $500" but 'is it worth giving up all other mad money things for 10 days to buy it'. 

Plus consider what other things are you likely to buy to work with the $500 thing. 

Plus any ongoing costs to it? 

Do you have time to actually use it. 

These questions are a lot more important as they keep you away fro just spending to keep up with the Joneses or you golf buddies, etc.


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