# Diva Dan - Lurking member with lofty goals



## DivaDan (Jan 17, 2014)

First of all I really have to thank everyone that's a member of this community. Seemingly segmented from anyone that has sees the world the same way I do its absolutely fantastic to find a community that shares a passion for the financial world as I do. To all of you from all walks of life and all corners of this magnificent country; thank you. 

Now down to the nitty gritty let me tell you a little about myself. I am a 29 year old male living in Edmonton. I hold a semi-sales position with numerous skill sets. Originally very blue collar my sights have always been on the white collar elite world. I'm a budding entrepreneur, with a passion for stationary. I've taken a step tonight and actually put down on paper what some of my goals are for the next two years and tucked them in my wallet. I've accumulated a fair amount of credit debt over a few accounts. I'm living common law with my life partner and we purchased a house together on a 2/3 -1/3 ownership basis. As hard as this is for me, (and I'm sure most on this forum will be able to relate to the pain of doing this) I'm revealing a few notes about my current financial positions. 


*Liabilities*

Credit cards and line of credit:

$34,532.75

Mortgage

$197,000 (2/3 of $295,000 for which I am responsible for)

Car Loan

$24,000 @ 0% interest over 7 years


*Assets*

Mutual funds

$3200


Chequeing

$4200


Savings

$500


Receivable loans

$16,000



I know the numbers look grim and I am well aware that my financial snapshot looks bad. Last year was my resolution to make a commitment of going to the gym 5 times a week and bettering my life through physical fitness. Now I'm turning my focus to my financials as fitness is now a habit. My goals are lofty. I've always in my heart believed that you aim out of the galaxy and regardless of where you land your still among the stars. 

*Goals
*
Pay off current debts

$255,532.75


Purchase a downtown condo/loft

$650,000


Purchase a 1kg gold bar. (This has been a dream since childhood)

$70,000 - assuming price will go up before I can afford to.


Money to travel

$45,000


A dream trip to New York - Wall Street.

$10,000


Lofty goals for right now but in my eyes not unachievable. I was reading that you need to do two things. Write down your goals, and tell someone that will hold you accountable and remind you why you are doing this. I'm on the cusp of 30, interest rates are rising and I've worked like a dog for what I have. Its time that I finally buck up and use my head to get what I want and not relying on my back and brute strength. I want to become a trader. I want to learn. I know education combined with desire and passion are going to be the keys to my success. One day at a time; and with that I want to add a quote that I recite almost every day to myself as my final words in my introduction. 

_"Do not wait to strike till the iron is hot; but make it hot by striking." 
William B. Sprague
_


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## lonewolf (Jun 12, 2012)

I can enjoy the stars without traveling to them. All the passion & desire in the world to travel out of the galaxy is not going to allow someone to travel out of the galaxy without a practical method of doing it. I have a more practical goal that most can obtain which is to enjoy life by living within & or below my means. 

Lets get real here your in major debt & your dreaming of spending money you don't have. With this type of thinking you will always be in debt you already have a mortgage & want to buy a condo what are you thinking???? Reset your goals they are not practical @ this time. Wanting to spend 45,000 for vacation when in debt is just crazy. The creative person does not need no 45,000 vacation to enjoy life.

William B. Sprague who ever he was could not have been a successful trader.

Come on Dan your making life to complicated by setting a goal of living beyond your means it is not a  path


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## DividendLuvr (Mar 5, 2014)

Welcome to CMF! Looking forward to reading about your financial journey, DivaDan! 

To start, over what time frame are you hoping to achieve these financial goals?

And a budget is the first step to achieving any of these objectives. Do you have one?

As lonewolf says, it's great to have lofty ambitions, but if you don't have a practical plan to achieve those ambitions, it's never going to happen.


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## Janus (Oct 23, 2013)

Welcome to CMF! You're taking the right first step in assessing the state of your financial life.

So a few things stick out to me from reading your post:

1. The first thing that sticks out to me is that you didn't list the value of the house in your assets. Yes you have mortgage debt, but you also own an asset. Include it in the assets section. Then, subtract your liabilities from your assets to get a Net Worth number so we can track that over time.

2. A trip to NYC sounds great, but it doesn't cost $10,000, and Wall Street is without a doubt the most boring part of Manhattan. You literally walk the street for a bit, see the bull and the buildings, then move on. That trip can easily be less than $1,000.

3. If you want to own a gold bar then that's great, but hopefully by the time you can afford one you'll realise that you'd rather have that $70,000 in an asset that produces income (dividends, interest, etc.).

4. The credit card debt really says it all. You have a spending problem. Forget about building up your assets, and work on paying down that debt ASAP. I'd even think it makes sense to think of your financial journey in 2 parts: paying down your debt, and then building assets afterwards. It makes absolutely no sense having money in mutual funds and receivable loans making a pittance when you're paying 20% interest on the credit card. Liquidate low-return assets to pay for high-interest debt, to the extent that you can.

5. No clue why you need a $24,000 car. I have a pretty high income and get to keep more of it because I don't even own a car. But if you have to own one, what's wrong with a 3-5 year old Japanese sedan for $10,000?


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## mind_business (Sep 24, 2011)

Wow! Definitely some lofty goals considering your current financial situation. I truly hope you're successful, but I have my doubts. 

I'm assuming one of your initial goals will be to increase your income to finance debt? Although I don't know what your current income is per year, I'm assuming it's not enough to keep up with your standard of living due to your 35k of credit debt.

One area I find very interesting is the asset listed as "Receivable Loans". Is this through a business, or personal loans to friends/family? I would definitely collect on this right away to wipe out some higher interest debt.

You obviously have passion for things that interest you. This will bode well in your financial journey. As others have said, you might want to take a look at a realistic plan on getting you from point A to point B. Know what your all-in expenses are. Figure out how you're going to pay down your debt (more income, cut expenses, win lottery  ). Figure out a timeline of all these events. The more unrealistic your expectations are, the more disappointed you will be in not achieving your goals. Reach high, but not to the point of failure.

Looking forward to reading your updates. Yours will be an interesting journey.


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## Plugging Along (Jan 3, 2011)

Welcome to CMF. You are right, by signing up and posting here, you have taken a first step. This will also make you more account able, as the members here can be opinionated but they generally have good advice and want people to succeed financially.

You have written out your dreams, they are not realistic goals yet. For them to be attainable, you need to make them SMARTer. You need to make detailed plan on how you will achieve these dreams, that's what will make it a goal. 

The first thing you need to clear is your debt starting with the credit card and line of credit, the the car loan, then the mortgage. Start with your budget and spending. You may want to post here you chasflow with expenses. 

Also, I see that your dreams almost all have to do with saving money to spend more. You may want to consider a different mindset. It is important to found balance and enjoy life, but that also means saving for the future. You may want to consider balancing saving for trips and spending at the same time as saving for retirement and rainy days. Otherwise, you will never break the cycle of debt, as you pay off one you will spend it all to rack up more. Then if something bad in life happens, you are in real trouble. 

Finally, I see you want to be a trader, this based on the rest of your post indicates to me that you may be on the impulsive side and looking for the short term. Before you just on here, you may want to get all the other areas in your finances in order. 

Good luck. I look forward to seeing your posts.


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## Mechanic (Oct 29, 2013)

The credit card is not your friend. The compounding interest is a huge burden. My focus would be on retiring that debt first. Don't get me wrong, credit cards are very useful and I have a couple. I use one for nearly all purchases but I don't put anything on it that I can't afford to pay when the bill comes. I think my credit card interest rate is about 19%, why would anyone even consider paying that kind of interest, the bank won't even give me 1% on my cash sitting there. You have to have a place to live so mortgage debt is ok as you have the offsetting asset of the property. A reliable vehicle is pretty important to me and 0% loan is the way to go if you don't have the cash. In any case the credit card debt needs to be gone before anything elso imo. Good luck.


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## DivaDan (Jan 17, 2014)

Thanks for the feed back everyone! 

First of all I understand the rate of interest on the credit cards. The portions of the credit debt are divided 3 different rates as follows:

$13,955.01 @18%
$11,706.38 @13%
$8,132.35 @5.7%

Figuring in the interest rates and payment schedules I will have the credit debt completely paid off in 23 months. As I pay off the debts I'm taking advantage of balance transfer rates if they make sense and swapping the debt from the higher rate cards to the lower rate as it becomes possible. 

I do have a budget made, although I'm tweaking it still trying to make as much room for my debt repayment plan to expedite the process as much as possible. 

Janus, I want to cover a couple of your points. The first point is the house. The approximate appraised value of the house is sitting around $315,000. I haven't gotten around to making up a net worth calculation sheet, its still on the to do list. The gold bar, a childhood dream.  As things progress I'm sure that my sights will change but as for right now it's something that I can aim for. Granted a trip to New York will cost far less than what I budget for, I always budget more than what I need. I guarantee Wall Street is only a small part of the trip. As for my car it is actually a necessity. I did buy new for the 5 year warranty and unquestionable reliability and dependability of the vehicle. I am not a mechanic, I do not pretend to be know anything about vehicles. With the hours that I work public transportation is definitely not an option. 

Mind_buisiness, the reason for the $35k of debt was largely a e-commerce startup that did not work out as planned. An investment in stock that didn't move as planned. Granted I still have the stock and am liquidating it as fast as I can to recover my costs. I am looking to invest in my own education so that I can move up and augment my income. Trading is my something that fascinates me, and you have better odds of succeeding at than dumping that same money into the lottery that you will never win. I know my goals are high but I don't believe they are unachievable. I have passion and a willingness to learn. 

Plugging Along, I'm working on my plan. Reverse engineering at its finest. Start at a final result and working back from there. Once I have everything all nicely laid out I'll post it here for critique and advice. I know that while my dreams seem impulsive and short sighted I promise there are longer term goals in the works for retirement plans. Granted trading is my fascination, it is not my only obsession. 

I'll be following up in the future with updates as my plans are formed and results start coming in. 



Dan


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## DividendLuvr (Mar 5, 2014)

Dan: Why have you not consolidated all of your credit card debt into a low-interest LOC? You allude to transferring funds to a lower-rate "as it becomes possible" - are you not able to secure a LOC for the full amount of the debt?


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## DivaDan (Jan 17, 2014)

To be honest DividendLuvr, I haven't tried to apply for an increase of credit on my LOC to encompass the full amount of the debt. I'll try calling into the bank on Monday.


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## DividendLuvr (Mar 5, 2014)

That is the first step to significantly reducing your interest payments and freeing up more cashflow to pay off principal. Good luck.

As others have suggested, you should also explore options to trade in for a cheaper car in order to free up cashflow. I'm absolutely confident you can find something that suits your needs for at least $10k less (especially if it's a 1- or 2-year-old model). Buying a brand new car is one of the best ways to "invest" in a depreciating asset, and a complete waste of money when you're in debt.


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## Janus (Oct 23, 2013)

"$13,955.01 @18%"

If any of your assets make 18% a year, or even half that, I'd be very surprised. Selling assets to kill this portion at least makes total sense.


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## andrewf (Mar 1, 2010)

Also, cut up your credit cards. If you can't avoid carrying a balance at 18%, you should avoid the temptation.


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## Janus (Oct 23, 2013)

DivaDan said:


> Mind_buisiness, the reason for the $35k of debt was largely a e-commerce startup that did not work out as planned. An investment in stock that didn't move as planned. Granted I still have the stock and am liquidating it as fast as I can to recover my costs. I am looking to invest in my own education so that I can move up and augment my income. Trading is my something that fascinates me, and you have better odds of succeeding at than dumping that same money into the lottery that you will never win. I know my goals are high but I don't believe they are unachievable. I have passion and a willingness to learn.


This is a bit confusing - so your *credit card* debt is due to a failed startup and money borrowed to buy stocks? No clue why you went the credit card route as opposed to using an LOC or margin. 

Just trying to understand how much of your debt is caused by buying things you don't have the money for - the debt might be borrowed from the wrong sources, but might not reflect bad consumer habits.


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## TK.61 (Mar 27, 2012)

As others have said to OP, great place to start, but you seem to have listed dreams rather than goals. But its ok to dream! 

You have yet to share a timeline for your goals listed in your first post, but I assume it is a long term plan. Eliminating 255k of debt while trying to save 55K for vacations and 70k for a gold bar all while planning on taking, what I assume, is a much larger mortgage to purchase a 650K condo does not seem short term. Do you mind sharing your income vs a breakdown of your expenses? That can give us readers a better idea of your situation.

I think you should break your goals down into more reasonable steps. Saving for any kind of asset, while holding significant debt @ 18% is something you should reconsider. Work on paying your debt down, and try to consolidate it to a lower interest rate before thinking of making any more significant purchases.


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## Feruk (Aug 15, 2012)

To understand where you're at, and if your plans (to be posted later I take it) are realistic, we need to understand how much you bring in. Combined ATAX income?

What is that $16.5K in receivable loans?? Depending what it is, your chance of collecting changes greatly.

Car: I see no problem with a $24K car at 0% for 7 years. If you bought a beater for $10K (as was suggested), chances are you're paying ~$1,500/year in maintenance anyway. After 7 years, you'd be at $20,500, and that's if nothing major goes wrong. On a used car, you're guaranteed to pay a higher interest rate. As long as it was negotiated well, I don't see an issue with the car purchase...

Mortgage: Your debt isn't 6 figure, because it's mostly mortgage debt. No issues here.

CC & Savings: Because it's been addressed, I'll skip over it, but CC debt is almost always a case of someone with a spending problem.


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## Underworld (Aug 26, 2009)

Haha I totally want a 1kg gold bar now


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