# 28, In Pursuit of 1/4M



## hedgehog88 (Nov 18, 2012)

Hello all,

First and foremost, I would like to say thank you for all the inspiring and motivating dairies on CMF. If it wasn’t for the users sharing their PF journeys, I wouldn’t have thought of including myself in this community.

*My story:*
I have been fortunate, proud, and thankful, in my 20s thus far to have a great lifestyle; I graduated from school, living in a great place (shared with my siblings), and working a stable job bringing in a decent income. Though I do not want to brag about it any further I feel the importance of wanting to share with you all that what was provided and accomplished thus far by and for me does not guarantee future fortune. And so for that, I start and share my journey on a challenge, which is to reach $250K. I personally believe with what I know, with what I worked for and saved, and with the help of this fine forum and other resources, I can achieve that value mark. Now why $250K you may ask? To me I believe it’s realistic and achievable with my current status, plus it’s my personal short term goal before 2015.

_Note: I would say I am average in financial knowledge, enough to understand and describe in basic the different types of accounts, and securities, if someone ask me. When it comes to strategies and in-depth analysis, not so much, but am eager to learn if I can apply to my situation._

*Current status (approx.):*

*Net Income:* $4500 monthly

*Asset breakdown:*
*Real Property:* $45,000 down payment 
*Vehicle:* $4000

*Savings:*
*Registered:* $45,000
*Non-Registered:* $7000
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*Holdings:* 80% invested in stocks and precious metals in registered, and the down payment for the real property.

*Liabilities:* $5000 aka engagement ring – aside from that, I am very disciplined when using my credit card; I am paying off 100% and in control with my limits.
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*Total asset: ~$105,000*
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I would say my spending habits are very low majority of the time; I make my own food, seek and purchase only on sale items, make use of items till their completely useless. But when it comes to the need of something (not want) I usually purchase affordable high grade quality.

So now that you have an good idea on where I stand financially, I have some *questions*:

*1)* I’m looking to further diversify my portfolio on top of what I've listed, and looking for investments that can give me some good income. I have only looked into ETFs, but I know there’s other options such as bonds, options, and GICs. Can anyone give me some advice if its good or not good to enter those or other security vehicles at this time?

*2)* When it comes to strategies to maximize my income, does my situation have what it takes to hit the $250K mark, or should something be changed now? I don't have any major expenses till the end of 2014 which then I take over my real property.

*3)* I’m looking for additional income, more on the passive side. Is there anything anyone can recommend at this time?

*4)* Other than my questions, any advice, opinions, arguments with my status are warmly welcome.

Looking forward to meeting and reading all user responses. If I'm missing any information or if required additional please let me know. I would like to get the most out of this journey. 

Thank you!


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## Janus (Oct 23, 2013)

hedgehog88 said:


> Working on it...


Some detail might help! What do you have now, what do you make, what are your costs, and when do you think you'll get to 1/4M? When do you WANT to have it by?


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## arrow1963 (Nov 22, 2011)

To get this straight:

You have ~$100,000 now.

You'd like to have @$250,000 next year.

You're going to earn ~$50,000 over the next year.

Best case scenario, that $50K isn't 'earnings', but is 'post tax savings'. In that case, you're asking an internet forum how to double your money in a year ($100K assets + $50K savings + $100K investment earnings, ignoring taxes).

More likely, the $50K isn't savings, and the $100K includes funds that can't be invested.

So, is the question you're asking 'How do I quadruple my money in a year?'.


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## hedgehog88 (Nov 18, 2012)

arrow1963 said:


> To get this straight:
> 
> You have ~$100,000 now.
> 
> ...


Too aggressive then??? How about 200K??? I understand what you're saying, and now thinking about it, I would be working with my 2014 income and needing to double that. That would be quite difficult as I will have expenses. Thanks for pointing that out. So in this case, is there anything I can change with my current investment?


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## Janus (Oct 23, 2013)

hedgehog88 said:


> Too aggressive then??? How about 200K??? I understand what you're saying, and now thinking about it, I would be working with my 2014 income and needing to double that. That would be quite difficult as I will have expenses. Thanks for pointing that out. So in this case, is there anything I can change with my current investment?


I think you're missing the point of his comment. Don't start with a number and work towards it - sit down, open Excel, and add each month's net income (after-tax salary minus expenses) and add those to your net assets (or net liabilities as the case may be). See what it adds up to. Then start playing with the expenses number to see if being more frugal will get you there. Unfortunately you can't just pick a number out of thin air!

BTW your mortgage is a liability, it should be on the list.

Edit: oh, and you're doing well, good job so far.


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## hedgehog88 (Nov 18, 2012)

Janus said:


> I think you're missing the point of his comment. Don't start with a number and work towards it - sit down, open Excel, and add each month's net income (after-tax salary minus expenses) and add those to your net assets (or net liabilities as the case may be). See what it adds up to. Then start playing with the expenses number to see if being more frugal will get you there. Unfortunately you can't just pick a number out of thin air!
> 
> BTW your mortgage is a liability, it should be on the list.
> 
> Edit: oh, and you're doing well, good job so far.


Thank you, Janus. In defense to my numbers, I actually have a spreadsheet going and those are the numbers rounded. I probably should've detailed more on what I would like to get out of posting this post. Basically I'm looking for alternatives and/or additions to my portfolio that allow me to progress from where I stand. Perhaps a change such as selling some stocks and moving to GIC, for example, whatever. My investments now can only hold up for so long before I have to sell or take a hit, and that is why I'm posting. My main goal, like everyone else, is to get some financial advice. Rather I decide to take it or not, at least I can get some sense that I'm on the right track.


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## rd_aaron (Jun 24, 2011)

You really should run the numbers in a few scenarios to see what a realistic goal would be.

Let's just look at an extremely optimistic scenario:

Let's say you can save $3000/month of that $4500/month. Let's also say you put that $3000/month into investments that make 10% per year. Let's also say you're trying to hit your goal for the end of 2015 (Dec 2015).

With compounding interest, you would have roughly $150k in investments at the end of 26 months (Dec 2015). Add to that, you'd have your $45k in equity from purchasing your property, and any equity you build from the time you take possession to the end of 2015, so you could potentially be close to that $200k by the end of 2015.

Realistically, I'm guessing you don't put $3000/month into investments every month, or get 10% return every year. What you need to do is track your expenses for a few months and see how much you're spending on average per month. Once you see how much you're able to put away, start taking that money off the top as soon as you get your paycheque. As for what investment vehicles to use, that depends on what your goal for this money is. If you're planning on using this for retirment in 30 years, then you can afford to put this money in higher risk investments. If you want to use it in a couple years, then you should put it in lower risk investments.


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## Feruk (Aug 15, 2012)

Your net income of $4,500... is that after just taxes or after all expenses? I assume after taxes only. How much do you plan to put away?

Realistically, let's say you're a relatively safe investor and make a market return of 6% on the 52K (45+7); that grows to only 55K. I think on 4.5k/month after tax, you can save maybe $2K/month. So there's another $24K. With those numbers, a year from now you'll have 52K + 24K + 45K (down payment) = $121K. Your car is not an asset unless you subtract fuel/insurance/repairs off your income. If it broke down, you'd have to buy a new one, so it's probably more of a liability... But let's not count it. Ring is not an asset any more than your TV is. So in one year you'd grow from $97K to $121K or 25%. This is so low because 45K is locked away in a property.

You're $124K short... So to get to $250K in a year, you'd have to get a SECOND job that pays you $124K net (double your primary job salary). So gross of ~$167K assuming 24% tax.


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