# My Journey



## Artfuldodger (Oct 29, 2016)

I have recently joined this forum. I will post my financial story shortly, but just wanted to send a quick note to introduce myself. I am 33 years old, living and working in Guelph, ON. I am single, and I rent in an apartment building. 

I have joined this forum to learn more about financial education & investing. To be quite honest, I am quite a novice at these things, and feel that I should have started much earlier with my financial education. 

I will post tonite with my monthly income and expenses.


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## Artfuldodger (Oct 29, 2016)

Salary - $68,600.00
RRSP - $18,463.71
Savings - $5,158.81

Expenses - 3500.00
Net income - Monthly - $500.00

Student Loans - $13,325.40
other expneses - Car - I still owe more than $15000.00 on that car

I don't have a mortgage, as I am renting. My Goals are to pay off my student loan to start. I have also taken measures to reduce my monthly expenses to 3000, so that would be extra 500 in my pocket. 

I am being pushed to buy a 2 bedroom condo, but I am not a big fan of mortgage, and with 5 to 10% down, my mortgage would be at least 500 dollars more than my current rent. 

I would love to hear some thoughts on route I should take to start working towards building my wealth


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## agent99 (Sep 11, 2013)

It's a long time since I was 33, so take what I say with a pinch of salt. What would I have done?

- Pay off your student loan as quickly as you can, but don't overly deprive yourself of having fun while you are young.
- Enjoy your car, but look after it well so you won't need to buy another one any time soon.
- Put savings in a TFSA and add to it instead or as well as RRSP. 
- While building your wealth, look at putting RRSP and TFSA money partly into equity ETFs like XIU or XIC as well as some in GICs. 

I am sure others will chime in. Read what we all say, but take what you might learn and think for yourself.


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## redsgomarching (Mar 6, 2016)

you have a great mind set to build on and are on your way to a positive networth.

A few questions.
are your rrsp holdings/savings invested or as cash/cash equivalents? 
depending on your answer you may want to take a look at paying down the highest interest debt first. your real rate of return is affected by the interest on that you are paying on loans. 
one more point, you might find it beneficial to forgo the RRSP contributions in favour of paying down your debt if the numbers work in your favour (keep in mind that you are earning income so your rrsp contribution room does carry forward and gives you an opportunity to utilize a better tax break later on if your income does get higher). by numbers you would have to see how much you are saving in paying down your debt faster vs the tax break on the rrsp contribution + return.


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## Spudd (Oct 11, 2011)

Who's pushing you to buy a condo? It seems like a bad idea for quite a few reasons - real estate market is kind of nuts right now, you have a low downpayment, and your mortgage would cost more than your rent. I would resist any condo-buying urges if I were you.


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## Artfuldodger (Oct 29, 2016)

Thank you all for your reply. I have been listening to Dave Ramsey and he is a proponent of getting debt free ASAP. 
My RRSP are with TD, and Savings are sitting in a back in a Savings account @redsgomarching. Also @agent99, to be honest I have looked into TFSA, but it was never a hard look, maybe I should spend some time reviewing it more closely. 

Here is what I am thinking, I can leave 1000 as an emergency fund, and start aggressively paying off my student loans. Student loan is the only loan where I pay interest in the amount of 52.45 per month. Car is on 0% financing so there is no interest payments I make per month, I pay the same amount bi-weekly. 

Also good point @Redsgomarching, I didn't consider that even if I don't make any RRSP contributions this year, that 18% is carried forward and I will be able to contribute more than 18% plus contributions from my employer. So even thought I might not enjoy the tax benefit of being in lower tax bracket this year, I can certainly enjoy it next year, when my student debt is paid off. 

And @spudd, parents, society, the girl that I am dating, media, friends........list is endless


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## mordko (Jan 23, 2016)

A couple of thoughts:

- Going forward... Not a good idea to buy a new car using a loan, even at "0% interest". Without the loan you would have been able to get a better deal, so you paid for it. And given that you haven't paid off your student loan... Why get a brand new car? It's a rapidly depreciating asset. 

- Not fair to compare your mortgage to your rent. Remember that part of your mortgage goes towards repayment of your principle. That's effectively a saving because you'll get that cash once the property is sold. Whenever you pay rent, you are waving good bye to 100% of that cash. Also, on average, the property appreciates. Having said all this, right now the housing market is very risky.


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## Artfuldodger (Oct 29, 2016)

Thanks Mordko


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## Saniokca (Sep 5, 2009)

I agree with most comments made above. At the beginning I used to listen to Dave Ramsey and Suzy Orman. It gets repetitive pretty quickly but their basic advice is very good for when you start out. I also liked Mr Money Mustache and still read it occasionally.

I would suggest:

1) Pay off all your debts before adding to investments (unless it is to get employer's match in RRSP or a pension plan). I agree with tackling the student loan first and then your car.

2) Do not buy real estate (without getting into the risk/cost/etc. which in my opinion scream: RENT):
- You are already in quite a bit of debt. Also you only have one income - when you have spouse's income as well you would be at least somewhat insulated in a case of a job loss. 
- I found that the more I learned about finance the worse my sleep got while being in debt.
- You are so young! Not buying a place in the past 5 years helped my wife and I pursue some amazing opportunities. We could easily move across the continent for a few years and then back. It's quite a bit tougher to do that if you own real estate (rent it out long distance, sell and pay commissions, etc. are not very appealing in my opinion).

3) See if you could trim your expenses further - Mr. Money Mustache blog/forum can help there. What I like about his advice is that he, unlike Dave Ramsey, he tries to keep "enjoyment" in your life (vs. Dave Ramsey's "rice and beans").

Most people I know who are our age (and older) have no clue about their finances and live paycheque to paycheque. Stating at 33 gives you a lot of time to become wealthy.


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## kostya (Jul 26, 2016)

I loved the title - My Journey. Two very important words. It's a journey and it's yours. The numbers is just a part of the story, the rest is what are the things that you like and don't. You need to find a good balance when you do things in a way that makes numbers work for you and you enjoy your life. 

Here is some number crunching:

I assume that $3500 of your monthly expenses includes your loans payments? If so, given your employment income, you should have about $9000 per year of net income, not $6000 ($500 p/m) so I assume the other $3000 per year is your annual contributions to savings or rrsp accounts (a bit more than $3000 in case of rrsp), or some taxable employment benefits. If your loan payments are say around $500 per month for each, then you have about 2.5-3 years to repay, depending on interest rates you have. That leaves you to decide what to do with your remaining net income of 500 per month. So now you have a few choices: save, repay existing/new debt or spend on something else. I agree with others that rushing in to buying a condo given your financial situation and the current market conditions is probably not a good idea. You will be stuck with a lot of debt and all you will do is work hard to repay it, leaving you with not so many other financial choices for years ahead.

Some non-numbers insights:

No matter how cliche it may sound to you: don't let other people or society presures to make choices for you. Make your own choices based on what you like to do and what you love. Manage your finances properly, in a balanced way, and you will have more choices what you can do in your life. Spend too much or take on more debt than you should and it will leave you with less. 

I hope this helps


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