# Late to the Game but hopefully not too late



## Lucasson (Jun 24, 2015)

Hi Everyone,

I just recently found this great website and have been lurking for a while. I am hoping I can get the opinions of others on what you would do in my situation. Reason I ask is that I am in my early 40's, have neglected my retirement, and find myself wanting to pro-actively work on my financial situation.

For the last 10 years I have been working for a Canadian company that matches 100%, in the form of stock, 20% of my salary. Since the company only requires the stock to be held for only 1 year I have come into the following situation:


235,000 approximate mortgage on a 600,000 valued primary residence - mortgage payments shared with spouse.
188,000 approximate mortgage on each of 4 Townhouses valued at 320,000 each - these are providing rental income.
130,000 - in Non-RRSP dividend paying stock in the publicly traded company I still work for - still contributing 20% of salary with 100% company match, so about 40,000 per year.

What I was thinking I should be doing is opening a self-directed trading account, sell a large portion of the current stock I have accumulated, and then re-purchase some other kind of investments utilizing my never used RRSP and TFSA limits. In the future I can have a percentage of my choosing of the company stock allocations automatically purchased as RRSP or TFSA and transferred to my self directed account. I will also purchase additional investments monthly using a portion of my salary.

Please, what advise can you give on what I should be doing? I do not yet have experience with investing but am a quick study so think that self-directed (to a degree) is still the way to go.

Thank you!


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## banjopete (Feb 4, 2014)

It seems as though you should take all the available company shares and at least transfer them/sell them and transfer cash into your tax protected accounts either TFSA or RRSP for starters. There is tons of information on the merits of either choice but if it were me I'd fill the TFSA and take the rest and place it in the RRSP then on the anniversary of the 1 year for your company shares each year I'd keep doing the same. What you ultimately choose to hold is up to you. 

You'd be well served to read extensively on your options as with your real estate holdings there are probably some more intricate moves you could make that would help you out tax wise too such as cash damming but that's a whole other thing. 

You have good problems to have and you'll be very happy with the results of your newly acquired knowledge when it's all said and done. Good luck.


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## peterk (May 16, 2010)

Lucasson said:


> What I was thinking I should be doing is opening a self-directed trading account, sell a large portion of the current stock I have accumulated, and then re-purchase some other kind of investments utilizing my never used RRSP and TFSA limits. In the future I can have a percentage of my choosing of the company stock allocations automatically purchased as RRSP or TFSA and transferred to my self directed account. I will also purchase additional investments monthly using a portion of my salary.


Sounds like a great plan! 130k in one stock, the company you work for, is not a wise idea, imo.

Are your townhouses working out well? making you money, I mean, without excessive hassle?


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## Lucasson (Jun 24, 2015)

Thanks guys,

Yes, the townhouses are working out well, the oldest is 2 are three years old purchased at 239,000 and selling in the same neighborhood now for 320,000. Rent is 1650.00 with a 880.00 dollar mortgage. They are freehold so no condo fees. They were new builds so no issues yet.


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## banjopete (Feb 4, 2014)

Most company matched plans have a once per year free transfer as a way of getting it from their/your account into your own self directed accounts which is how I do my company stuff. It sounds like your rental properties could do some really dynamic things for your investment savings with the amount of cash flow they generate.


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## cashinstinct (Apr 4, 2009)

You could have more mortgage on townhouses, to deduct interest.

More mortgage on investments, less on your house


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## nobleea (Oct 11, 2013)

I'd sell those townhouses and invest the proceeds. They're getting you a little cash flow, but not much. 1650 rent, minus 880 mortgage, minus property taxes (200?/mo), minus insurance, minus income taxes (300?/mo). That's 200-250/mo profit. On 132K in equity, that's 2.2%/yr. Now of course you have the principal repayment, which your tenants are so kind to pay for you. So that increases your return on equity to about 5.4%. If housing continues to go up at a great rate, good for you. If it goes down or tracks inflation you could probably do better in a dividend stock or REIT.

But you're doing great. If you were to sell the company stock and all the townhouses, you'd have +/-550K to invest (after capital gains). Throw that in TFSA and RRSP and let it grow tax sheltered for 10-15 years, at which point your mortgage will be paid off, and you can retire before you're 60.


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