# Road to Financial Independence - My goals and Journey



## CrazyEights (May 17, 2016)

Hi everyone,
After following the forum for about a year, and reading up on a number of members diaries, i thought it would be interesting to also capture my own diary here. And as keep inputting on this forum, see how i've improved or regressed..all while obtaining perspectives and strategies from those in the CMF community. 

For a little background, I am in my early 30s. Happily married. And we are expecting our first little one come September. Scary to think about some times to be honest. We haven't even looked for items for the baby. But at the same we are kind of living in the moment because things can be tough when its not totally tangible for us at the moment. I'm sure as time carries on, we will get there.
My wife and I are both health care professionals (medical rehabilitation). I work in the public system, and my wife both public and private system. 
We make pretty much exactly the same amount in salary. This will obviously be reduced to a single income when my wife goes on maternity leave. However, my wife does plan to return to work as she enjoys work and it provides a sense of purpose and independence for herself as well. Having said that, her job allows her to work flexible hours and even on a 0.5 Full Time employment.

We have separate accounts for the most part, but do treat expenses as shared expenses. All we do is use an app called 'Splitwise' to tally up the monthly expenses, and whoever is owed the other just pays the other back. Our system works for us. But mainly have separate accounts because we had separate accounts before. We have one shared account that we basically are saving to use for our down payment.

We currently rent, but are looking for a place to call home. But there doesn't seem to be anything on the market that fit what we are looking for. I've seen homes here that have been up since last year. We are carrying quite a bit of cash as a result as we are able to put quite a large downpayment. We hope for this to be short-term as we don't want to carry too much cash, but we won't rush ourselves into anything. So most cash is in HISA for the time being.

My goals are:
By 35 is for my family's networth to be about $850,000
Own a home with my wife within the next 2 years
max out wife's TFSA (currently only ~9200 of stated amount) and fully invest
Start RESP fund for the kiddo and max every year

My problems:
Even after putting a down payment on a home, I will likely have a large amount of cash in my non-reg account. So I'm figuring out how to simply life between tfsa, rrsp and non reg account. I have existing stocks and index funds in place, and kind of all over the place to be honest. But I realize I have to also settle on a strategy (i.e. more index funds - eseries, 5 pack done by others, etc - still deciding). If I did plan for a 5 pack, i imagine i would have 5 stocks held by each of us (so maybe 10 in total) and make sure they are different stocks between my wife and I. Hopefully I can get some of a strategy idea I like within the forums - at the same times, markets seem pretty high still.



Enough about me...Here are the numbers for the end of July.
Assets:
Cash (combined): $27,989
Savings (combined) $190,943
Shared account: $37,988
Non-reg (mine): $206,908
TFSAs (combined): $64,534
RRSPs (combined): $83,389
DB Pension (mine): $34,112
DB Pension (wife): $41,228
Car (mine) $8,289
SUV (wife) $8,289 -I depreciate both vehicles @ 0.50% every month to be pretty conservative. For simple tracking, we both valued our vehicles to be roughly the same.
*Total Assets: $723,586*

Liabilities:
Credit cards: averages to be ~2500 between both of us every month (Always paid every month too)
*Total Liabilities: $2500*

*Net Worth: $721,086*


Thanks for reading, and hopefully I will learn an abundance throughout the journey as I continue to update.


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## cashinstinct (Apr 4, 2009)

Good work to have such net worth at your age. No worry for your family!

____

For your non-reg money and your wife not-fully-funded TFSA: you can give your $ to your wife, so she can contribute to her TFSA.

There are no attribution rules in such scenario.

Depending when you did accumulate the $ (before or after marriage), there are consequences I would not venture into.

Did you have an inheritance or other reason why you have $200k non-reg and your wife does not, considering you both make same income ?

____

For your non-reg money and your RESP:

Some article did calculations whether you should fully fund your kid's RESP at $50,000 and forgo the 20% federal subsidy, to avoid paying taxes on non-reg money.

Depending on how much you have left, another option is that you could "jump start" the RESP by adding $14,000 when you open the account (maximum $50,000 - $36,000 in future contributions to get maximum $7,200 federal subsidy).


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## CrazyEights (May 17, 2016)

cashinstinct said:


> Good work to have such net worth at your age. No worry for your family!
> 
> ____
> 
> ...



Thanks Cash.

My wife actually has enough cash to max out, she just was late to the game to fully invest it. the "Savings Account" is mostly her funds. Ideally what i mean is to invest her TFSA fully (also since edited goals). Just unsure how best to deploy since the market is high (i think).
There's never been any inheritance. Just good savers more or less. We probably on average save about 58% of total income. Compared to my wife, who really only started working 3rd year university, i saved a lot and worked 2 part time jobs during both high school and university. I also invested in RE fairly young and recently sold them. These are probably the biggest reasons how i was able to accumulate 200K in the nonreg. My wife recently sold her duplex, and the "Savings Account" is largely her funds. Having said that, about 420K of the networth is personal to me, where as my wife is about 300K


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## nobleea (Oct 11, 2013)

Great to see your journey here on 'paper'. Looking forward to it.

As cashinstinct mentions, you can jumpstart your RESP. For those that have the money, I think it's better to max out the 50K lifetime amount asap, even at the expense of foregoing matching CESG grants. The added benefit of tax free growth for longer more than makes up for it.

I would say your car depreciation amounts are a little on the low side. $100/mo at a minimum.

If you're due in Sept, no point in looking at houses right now since it would be a disaster to move anytime from now until just after xmas.
Aside from having a crib/bassinet and a few clothes and diapers, there's not really anything to get ready for for a baby. They just sleep for the first month. I'd suggest booking a good newborn photographer as they're only newborn once.


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## CrazyEights (May 17, 2016)

The problem i have for both my wife and I is that we carry most cash in HISA, so just figuring out how to deploy and allocate accordingly once we are to find a suitable house.
TFSAs is mostly cash or HISA as well.


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## nobleea (Oct 11, 2013)

CrazyEights said:


> Having said that, about 420K of the networth is personal to me, where as my wife is about 300K


Unless you have a pre-nup signed, the networth is equally split between you, aside from maybe the pensions.


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## CrazyEights (May 17, 2016)

nobleea said:


> Great to see your journey here on 'paper'. Looking forward to it.
> 
> As cashinstinct mentions, you can jumpstart your RESP. For those that have the money, I think it's better to max out the 50K lifetime amount asap, even at the expense of foregoing matching CESG grants. The added benefit of tax free growth for longer more than makes up for it.
> 
> ...


Thanks nobleea. Yes about time i did this. I hope to get more feedback just like this. It's been something i've meaning to do. 
Noted on the car depreciation. I will reflect that on the next statement..

These are both interesting thoughts both you and Cash bring up regarding the upfront RESP contribution. i'll have to look into that and do some general math. Likley will depend on whats leftover.

I did have a discussion with my wife regarding the house. We are both certain we likely won't find anything or purchase anything. Part of it is if she is due in Sept and goes on maternity leave, there goes one income for qualifying (but not really to concerned about this anyways). But we do have the bassinet (free) and lots of clothing (free) locked down. If anything we need a stroller and a car seat. They won't let you leave the hospital without one.


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## nobleea (Oct 11, 2013)

My experience is that the banks don't care if you're on maternity leave. As long as you are employed after. The last two loans we've gotten my wife was on maternity leave, I mentioned it during the application, and they didn't care.


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## redsgomarching (Mar 6, 2016)

nobleea said:


> My experience is that the banks don't care if you're on maternity leave. As long as you are employed after. The last two loans we've gotten my wife was on maternity leave, I mentioned it during the application, and they didn't care.


Mostly they will do anything to push the mtg through - they will use last 2 yrs of tax returns for income verification.


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## CrazyEights (May 17, 2016)

So its been a busy month this past month. 

I now join the new dad club. Baby is in the NICU, but all signs says he's recovering well and dramatically, and mum is doing well as well. I commend all the staff at the NICU that help those little guys get better, they are truly the best. Now my focus is now on boy, and ensure he develops well. I guess its always scary how kids grow up to become especially after going through traumatic delivery and them being in the NICU.

On the home front, we had put an offer on a house that was way over priced based on all metrics and comparables. Even their real estate agent had thought it was overpriced, but what can you do. After some back and forth, they were not willing come down more, so we walked away with no problems on our end. 2 weeks later, their agent contacted ours to see if we were still interested, of course we were, but not at that price. They ended up offering another price to us, but we held firm with our last offer. No word, but we will see what happens. Keep you all posted.

My goals are:
By 35 is for my family's networth to be about $850,000
Own a home with my wife within the next 2 years
max out wife's TFSA (currently only ~9200 of stated amount) and fully invest
Start RESP fund for the kiddo and max every year
Finish building this darn coffee table i've been building before our boy came.

My problems:
still figuring out exactly how to sort out non reg investments with RRSP and TFSA. I'm leaning to just putting all RRSP in something like MAW104, dividend companies in non-reg and TFSA, and just make it so that my wife's account and my own have separate companies in our holdings.

*Assets*
Cash (combined chequing and savings for future posts): $268297.27 (+39.94%) - we are big savers 
Non-reg (mine): $207,200.07 (+0.14%) 
TFSAs (combined): $64,286.68 (-0.38%)
RRSPs (combined): $82,426.04 (-1.16%)
US Account (converted to CAN at current rate): $20,124.80 (+1.07%) - forgot to add last time
DB Pension (mine): $34,112 (n/c)
DB Pension (wife): $41,228 (n/c)
RESP: to be done, mostly from gifts from friends and family.
Car (mine) $8,206.72(-1%)
SUV (wife) $8,206.72 (-1%)
Total Assets: $723,586

*Liabilities*
Credit cards: averages to be ~2500 between both of us every month (Always paid every month too)
Total Liabilities: $2500

*Net Worth*
Total: $734,089.07 (+1.45%)


Most of the increase is from saving a lot of money. We aren't big spenders by any means. Any decreases from our portfolio has been due to due to the choppy markets, but i'm sure everyone has felt it. For my sons RESP, i have thought about what other said about just putting the full max (if capable) and let that compound, but we will see...may end up doing a lump sump of 10K, and adding 2K each year. All will likely be in TDeseries to keep it simple stupid.

Thanks for reading, and hopefully I will learn an abundance throughout the journey as I continue to update.


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## nobleea (Oct 11, 2013)

Wow, big changes. Congrats on the new one. NICU can be stressful for sure, but they all come out fine. I've photographed dozens of kids that have spent time in NICU when they were born (some for months) and they turn out just fine. My sister works in the NICU.

What neighbourhood/area are you looking at for homes? Certainly, there are a few listings that are a bit out to lunch for pricing, but generally, everything seems to be moving fairly promptly. Do you guys have a lot of unused RRSP contribution room, or is it pretty close to max?

Focus on the coffee table for the next 3 or 4 months. They just sleep a lot.


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## CrazyEights (May 17, 2016)

Thanks nobleea. That's reassuring. I know he's in great hands with the NICU, but he has improved dramatically and we expect him home fairly soon.

Neighborhoods that we are looking at are closer to the south central core. This particular property is in Allendale.

In terms of RRSP, I'm pretty close to max, part of it is because of my DB Pension. My wife has a bit more unused space. We likely will not contribute too much this year for her since her income will be low already, so we'll save it when she goes back to work.


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## kelaa (Apr 5, 2016)

Not to nit-pick, but I want to comment that 0.5% depreciation per month is overestimating the value of your car, unless your car has superb resale value. If you work with the assumption that a car should be worth 10% of it's value in 10 years, that's 1.8% of current value per month. Or if you are doing it as straight line depreciation, that's 0.75% value of the original value per month.


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## CrazyEights (May 17, 2016)

kelaa said:


> Not to nit-pick, but I want to comment that 0.5% depreciation per month is overestimating the value of your car, unless your car has superb resale value. If you work with the assumption that a car should be worth 10% of it's value in 10 years, that's 1.8% of current value per month. Or if you are doing it as straight line depreciation, that's 0.75% value of the original value per month.


Kelaa - thanks for the feedback. i received the same feedback from others, and actually adjusted it to 1% depreciation in the September line so that should be corrected. Both cars are actually worth more by both blue book, and general Kijiji based comparables. The number shown is fairly conservative. It is straight line depreciation that i am using for simplicity.


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## CrazyEights (May 17, 2016)

Monthly update: 
Getting settled with the newborn. Definitely different. Definitely tired as well. Decided to take 1 week off from work to help my wife and I get settled with routines and figure out the pace of this little guy. At 31 years old, i’m feeling like i’m much older at this point. Just got to get into the groove, and i’ll get back my energy.

Managing and figuring out the "in-trust" account and RESP is a bit of battle, but otherwise his should be setup. Just got to wait for the birth certificate to officially register his RESP. I will be registering it with TDDI, and the plan is to just put the funds in eSeries index funds. I also decided just to put the yearly maximum of $2500 into the RESP account, to obtain the $500 from the CESG. As long as i am able to get the RESP in process before years end, I should be able to get the $500 in the account for this year.

An update on the house front. It looks as though my wife and I bought the house i mentioned above. The sellers accepted our offer at 50K less than they were asking. Maybe there were starting to sweat a little bit, as it did appear the market started to slow down quite a bit here in Edmonton. Plus there are some new mortgage rules expected to come in and interest rates going a bit higher...so who knows. We know the sellers put in over 100K in renos, and bought the house in 2014 - a high point in RE in Edmonton. Likely the sellers just wanted to finally let go and move on. We just finished the inspection this week, and our mortgage commitment documents are in place. Just have to see how the RPR compliance report comes in. I'm not expecting anything out of the ordinary from the report, but if there was it would be the sellers responsibility to fix it. I had some initial questions on the deck, so we will see how it goes. What's nice is that the house is in a central mature neighbourhood, but the house itself is only about 30 years old. So "shouldn't" have the headaches that older homes in the area would have. The other thing is that the home has a legal basement suite in it that can easily compete with anything on the market, especially with 8.5 feet floor to basement ceiling. We plan on renting it out for a few years which should help with mortgage payments, but also with my wife now on maternity/parental leave. After a couple of years, maybe try Airbnb. But we will see how renting it out goes. I'm been a landlord for many years before, so this is nothing new to me. At least with this being where i live, it should in theory be easier to manage, and we can be pickier on who we want living with us. We can remove conditions at any point, but we'll probably wait a little longer to see if this rush RPR report will come in earlier. In terms of the down payment, we plan to put about 60% down, which should help quite a bit. Reminds us why saving is important.

My goals are:
- By 35 is for my family's networth to be about $850,000
- Mortgage free by 40 (new).
- Own a home with my wife within the next 2 years (not official yet, but could be achieved fairly soon)
- Max out wife's TFSA (currently only ~9200 of stated amount) and fully invest (with the purchase of this home, the plan is to put about 26K into her account in the mean time).
- Start RESP fund for the kiddo and max every year (in the process of registering for RESP and opening in-trust account).
- Finish building this darn coffee table i've been building before our boy came (almost done).
- Figuring out the right asset mix for TFSA, RRSP, and non-registered (something likely many of us are challenged with).

Assets
Cash: $44,779.02 (14.33%) – with my wife going on Maternity Leave, the savings rate likely will go down next month simply because the max income she will get from EI is about $2200 per month.
Non-reg: $207,654.70 (+0.22%) 
TFSAs: $64,549.28 (+0.41%)
RRSPs: $84,811.77 (+2.89%)
US Account (converted to CAN at current rate): $20,556.93 (+2.15%)
DB Pension (mine): $34,112 (n/c)
DB Pension (wife): $41,228 (n/c)
RESP: in process
Car (mine) $8,124.65 (-1%)
SUV (wife) $8,124.65 (-1%)
Total Assets: $743,070.88 (+1.22%, +$8981.81 from the previous month) 

Liabilities
Credit cards: averages to be ~2500 combined every month (Always paid every month too)
Total Liabilities: $2500

Net Worth
Total Assets: $740,570 (+1.22%, +$8981.81 from the previous month) 
*I forgot to subtract the liabilities from my networth last time my apologies


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## nobleea (Oct 11, 2013)

Congrats on the house! Given the area you've chosen, you should be able to get a quality tenant from the university. Maybe a masters student or similar. Sometimes the RPR will show a corner of the fence being out, or no permit pulled for a deck, etc, but most are pretty small. Often the lawyers and bank will push title insurance even if the RPR is clean. 
The guy across the alley from us just sold his house. Upon getting his RPR, he found out he built his garage over a foot closer to the alley than he was allowed to. And this was just built a year ago. Shocked that he could have f-ed that up as the rules are pretty clear. Had to apply for a variance and get buy in from all his neighbours. So newer renos don't necessarily follow the rules either.

When would you take posession? Hopefully not too close to Xmas as it'll take a good month to get settled in and set up, especially with a new kid.

On the RESP, by the time everything's set up and you can make purchases, it'll be close to the end of the year. And with the new year you get the additional contribution. Our son was born 11 months ago in Nov and we're still not caught up on his RESP contributions since he has 5K room already.


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## CrazyEights (May 17, 2016)

Thanks Nobleea. We hope so. We're okay renting it for a bit lower than market if it means we get a solid and consistent renter for a few years. We figure even if it was at $900/mo (for example), it is still over 10K a year, so nothing to cry about.

Possession would be in Late October. 

Ouch - yeah, that would suck and especially if it was only built a year ago. I'm not too worried about the RPR (although i have my suspicions regarding the deck since they "rebuilt it"). And If something were to come up that we weren't expecting, our plan is to just have the seller deal with it and pull whatever permit they needed to. They actually did initially want the previous RPR (2008) to be accepted with title insurance, and that RPR had a memo from the city outlining some encroachment agreements (utitlity lines) and the non-conforming garage that was grand fathered in. With regards to title insurance in this situation, I did speak to my lawyers office regarding title insurance - they stated it only really works if there were issues that were unknown to you, and it never covers all the expenses that you might incur. They suggested the RPR was a better route, just so that it is the responsibility of the seller to ensure it it is compliant before transfer. 

i've learned that the RESP is a process to register....but MORE importantly, i've learned when you go to TD or any bank really...many of the "advisors" have no idea what to do. Which makes the process longer than it needs to. If i can my son's registered by the end of next week...and get the CESG come in by end of November i'd be a happy guy with a little less stress.


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## nobleea (Oct 11, 2013)

The encroachment agreements should show up on title, which can be pulled for $10 through Land Titles Spin 2 website.

When setting up our RESP, out of the 20 people that worked at our closest TD branch, only 1 knew what to do in regards to getting us set up on e-series. The CESG is about a month delayed. They put it in to some pricier balanced fund automatically, so I have to transfer it to an e-series once the amount hits $100.


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## CrazyEights (May 17, 2016)

Another month has passed. And let me tell you, I am tired. New respect for parents. I see all that was done to raise kids. Not easy, especially juggling work, life, and ensuring relationships with your partner is always top of mind.

We finally took possession of the home. It was a lot of work juggling the closing process and moving with the baby. As other suggested, wasn't easy by any means. Probably got a few more grey hairs. But things will settle, and now have a bunch of basic house things on the list to do. 

With regards to our mortgage, we saved enough money to put in a fairly large down payment. This was done through probably having a savings rate of about 55-60% of our monthly income, and selling rental properties that we had owned. Saving the amount of money we did from being practical was the biggest reason we were able to afford a large down payment (amounted to ~55% downpayment). No doubt. We saved enough to the point no stocks had to be sold (only HISA in the taxable account), and RRSP and TFSAs weren't touched at all.
Overall we made about 40K from our properties altogether from appreciation, not including the cashflow component we had (nothing to complain about, but nothing to brag about). I am happy to get rid of the rentals that we had, as i was being drained, and lessons learned:
#1 Have a good partner - don't necessarily do it with family at all
#2 Make sure you outline who's responsibility is what, or else you just end up doing all the work while the other gets a free ride. 

But at least i can cross off a few things off my goals for this year.
- I did complete my coffee table, and looks very slick.
- I did set up my son's RESP with TDDI - process was difficult only because some reps don't even know how to setup a trust account, let alone set up RESP account with TDDI. It took 2 advisors, but eventually got it with the last one. I have already put in the max 2500 for the year, so i should be expecting the $500 for the government as well by the end of the year. Overall fairly simple process, just need to ensure you have the birth certificate and SIN ready.
- purchased our new home with most of the things that we wanted.

My goals are:
- By 35 is for my family's networth to be about $850,000
- Mortgage free by 40 (New). we will be aggressive with this. We figure we can get about $11K a year, which we could then lump sum into our mortgage (while paying regular accelerated biweekly payments)
- Max out wife's TFSA (currently only ~9200 of stated amount) and fully invest (with the purchase of this home, the plan is to put about 26K into her account in the mean time).
- Figuring out the right asset mix for TFSA, RRSP, and non-registered (something likely many of us are challenged with).
- find a renter for the basement suite come March/April 2018 (New)

This month will have reflect the home purchase.


Here are the numbers:
Assets
House: $585,000 
Cash: $85,129.41(-177.13%) 
Non-reg: $62,789.97 (-53%) 
TFSAs: $65,170.32 (+0.96%)
RRSPs: $87,075.79 (+2.67%)
US Account (converted to CAN at current rate): $21,341.81 (+3.82%)
DB Pension (mine): $34,112 (n/c)
DB Pension (wife): $41,228 (n/c)
RESP: $2,500 (0%)
In Trust account: 1000.03 (0%)
Car (mine) $8,124.65 (-1%)
SUV (wife) $8,124.65 (-1%)
Total Assets: $1,019,393.91 (+1.5%) 

Liabilities
Mortgage: $265,000
Credit cards: averages to be ~2500 combined every month (Always paid every month too)
Total Liabilities: $267,500

Net Worth: $$751,393.91(+1.52%, +$8,823.03 from the previous month)


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## CrazyEights (May 17, 2016)

Here we go.

This month was a little stressful. But tis life, and shows to have some savings in the event unexpected expenses happen.
Long story short we had the following happen:
- a squirrel or squirrels get into the attic. Will be about 300-500 to get that taken care of.
- some sewer backup due to tree roots (the joys of living in mature areas) from the city. Nonetheless we have insurance that will cover the damages, and looking to replace our lateral line to the city in order to get the city to replace the remaining line on their end. The line replacement will be reasonable, and should be about $4000 with lifetime warranty. Also looking into a Backwater valve (about $900) and get a rebate on it from the city (should be up to $1200), whenever the new program from EPCOR (city utility company) reestablishes it. Should also help lower the insurances since a claim now has been made.
- had a kid from the nearby high school crash into our fence! nonetheless we settled , and decided to just take the money (about ~1400) and take down the chain link fence anyways...which should help with the repairs mentioned above.
side to prevent further issues. 

Call me "lucky" i guess. While these will be quite in expenses, like i said it is to be expected with home ownership, and ensure you having savings to deal with the issues. T

Finally got the RESP CESG grant, now waiting for the markets to correct a bit to place the money into eseries funds. Currently i just have it in TDB8150 @0.95%. Not ideal, but patience is important.

My goals are:
- By 35 is for my family's networth to be about $850,000
- Mortgage free by 40 (New). we will be aggressive with this. We figure we can get about $11K a year, which we could then lump sum into our mortgage (while paying regular accelerated biweekly payments)
- Max out wife's TFSA (currently only ~9200 of stated amount) and fully invest (with the purchase of this home, the plan is to put about 26K into her account in the mean time).
- Figuring out the right asset mix for TFSA, RRSP, and non-registered (something likely many of us are challenged with).
- find a renter for the basement suite come March/April 2018 (New) updated - have basement ready for renter by March/April 2018

This month likely won't reflect the expenses above, but December will definitely take a hit. Santa came early for me i guess.


Here are the numbers:
Assets
House: $585,000 
Cash: $107,693 (i forgot to add another account hence the increase) - We have way too much cash, but i've been telling my wife to transfer a good portion in her account to her TFSA, as hers has not been maxed.
Non-reg: $63,186 (+0.68%)
TFSAs: $65,466 (+0.45%)
RRSPs: $87,191 (+0.13%)
US Account (converted to CAN at current rate): $20,969.59 (-2%)
DB Pension (mine): $34,112 (n/c)
DB Pension (wife): $41,228 (n/c)
RESP: $3002.08 (20%)
In Trust account: 1,150 (15%)
Car (mine) $7,963 (-1%)
SUV (wife) $7,963 (-1%)
Total Assets: $1,024,926 (+1%) 

Liabilities
Mortgage: $264,355 (-0.24%)
Credit cards: averages to be ~2500 combined every month, this month probably closer to $3000 (Always paid every month too)
Total Liabilities: $267,355

Net Worth: $757,571 (+0.82%, +$3177 from the previous month)


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