# Spending less to earn more money



## SpendLessEarnMore (Aug 7, 2013)

*August 2013*

*How I got here*

Back in 2009 I bought my first house in Mississauga, from working many years making $23k/year or less, for $205k. Now valued above $300k. It has 4-bedroom, 2 kitchens and 3 washrooms.

I just recently sold my house that I bought 10 months ago in Calgary where I'm currently working to get a more rental friendly house. It's all part of my short term strategy in quitting my job which I'll explain further below. Cole's Note bought house 10 months ago for $218k and sold it for $231k privately. Than bought rental friendly house for $191.5k (assessed at $230k) porting my $193k mortgage over and putting $23.5k down to also port the CMHC fee over as well. 2-year lease signed on it before closing date.

End result mortgage lower making it more manageable, house with potential to sell for profit in future and some extra money made to convert into stock investments.











*Note:* The rental houses I appraised at a very conservative value.

*Short Term Goals*

Here's my wacky idea. I've already bought the plane ticket to Vietnam for mid-January. Going to quit my job day before I leave Canada. Everyone including the managers know I'm quitting. Going to spend some years in Vietnam and depending on the situation may stay longer or may come back to Canada. Don't plan to find any employment while I'm in Vietnam. Going to hit the ground day 1 on planning my wedding for next month. My fiance will support us both on her $250/mth salary. 

So the question begs how do I prepare myself financially to get to this point?

1) buy 1-way plane ticket (done)
2) cash out my company retirement investment funds (locked-in fund has to be under $10k and total is currently $7900)
3) Put as much possible into self-directed RRSP to get the most tax refunded. (estimated $6k income tax paid)
4) Work all the overtime I get until I quit my job.
5) have $50k in cash and equity before I leave Canada
6) Bring $7k cash to Vietnam, leave $8k in checking for emergency and rest into TFSA.

*Long Term Goals*

1) Pay off both mortgage within 15 years or sell Calgary house for $250k
2) Have a sustainable dividend income stream of $1000/mth

*Budget*

*Personal Expenses*
rent $400/mth
phone $100/mth
gas $20/mth
food $300/mth
miscellaneous $100/mth
mortgage 1 4.29% $1105/mth 
mortgage 2 3.09% $925/mth
property tax: $200/mth
landlord insurance: $160/mth
Utilities: $300/mth

Total Expense: $3610/mth

*Income*
Full-time Job $4200/mth
Rental 1 cashflow $81/mth
Rental 2 cashflow $260/mth

Total Income: $4541/mth

Net Income: $931/mth

*Note: *

I've never bought clothes or go out to movies/clubs. I don't watch tv. I entertain myself by educating myself on finances, playing guitar, shooting photography or cruising around the neighbourhood on my scooter. 

The scooter is my main mode of transportation for everything from grocery buying to going to work on it. My workplace is 20 minutes walk. 

I don't have friends or family in Calgary so I load up my phone with $100 good for the entire year. But because my fiance is in Vietnam unfortunately I have to spend a lot to talk to her. We try to cut cost down by talking online but because she doesn't have a computer the convenience makes it difficult.

Food is my one guilty pleasure. I like to drink alcohol too but I've cut that out for now. That's why I'm so looking forward to moving out to Vietnam where good tasting food is in abundance and less than $1 Cdn. Beer is $0.50 and all round hot weather.

Mortgage 1 is at an accelerated weekly payment. Once I get my mortgage documents for mortgage 2 I'll put that mortgage at an accelerated weekly payment too though not by much since mortgage 1 has the higher interest rate.

*Stock Investment Strategy*

I always had an interest in stock investments ever since I was a teenager. I did 2-years majoring in Economics before I dropped out and rode the tidal wave of getting a 1-year IT diploma. The last stock I bought was $6k of CNQ which I had to sell (for $400 profit) for my Calgary house down payment. But overall I'd rate myself as a noobie when it comes to stock investments. I've read up a lot on various investment strategies and what are the investment choices out there. As I'll have no job income to fall back on I'll have to be conservative with my investment choices.

1) To build up $50k in TD Waterhouse so I could qualify for the $9.99 commission fee.
2) Looking at TD E-series for the low MER and commission fee.
3) Build a dividend income stream from blue-chip type companies that have proven history of increasing dividend.


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## KrissyFair (Jul 8, 2013)

This is fascinating and I'm envious! I've always wanted to pick up and leave but darn it I went and had kids 

Anyway, the only thing I'll say is maybe look into a way of making a bit of extra cash while you're there without it being 'employment' in the traditional sense. It's awesome that your fiance can support you but if her salary is $250 (not a typo?) then it doesn't leave a lot of wiggle room for things like having/wanting to fly home. You said you do photography? That would probably earn you some coin, especially with the scenery in Vietnam. Check out stock photography companies, a lot of them basically rent out your images to their subscribers and pay you a bit of a royalty for doing it.

Good luck!


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## Ponderling (Mar 1, 2013)

Lots of your money is tied up in real estate - You may want to consider getting back to just 1 house and diversify with the proceeds of the second house a bit more.

If a housing price correction or slow melt in house prices finally takes traction in Canada, like it has elesewhere, then you are going to be in some pain.
That could pull you back to the working world, which would be a major ramp in your work free goal.

I am old enough to rememeber , that while it may not be true currently, Calgary's resource dominated economy runs in cycles with down times a s a part of the cycle.
You could find a rental property un rentable in Calgary at low cycle times, although that is not in the current short term outlook.


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## SpendLessEarnMore (Aug 7, 2013)

Thanks for those very helpful suggestions. I'll be starting my family next year and hopefully a kid too.

Nope $250 is not a typo. Average wage in Vietnam is about $200/mth. She owns a house so no rent to pay. We budgetted $30 for all utilities including internet. The rest goes towards food, gas and anything else with left over money going to her mom. 

As for selling the house. I'm pretty confident in my tenants. Never had a tenant leave for almost 3 years since I started renting out the house and they've all been clean and never bothered me once. Besides my dad also lives there and watches over the house so can't really sell it as much as I'd want to. The Calgary house is leased for 2 years to 2 of my co-workers so I'm pretty confident in them renting it for the long term if not indefinite. My workplace is very stable no matter how bad the economy is. I can always come back to my workplace if things don't work out in Vietnam.

As for income generating ideas I have some. 

1) English private tutoring 
2) Blog (steps I've taken along the way to trying to achieve this crazy goal and VBlogging in Vietnam)
3) Investment/trading
4) business/investment opportunities in Vietnam
5) computer related projects on the hardware side 

Now where to invest my 15k that I can easily draw upon in January if need be? TD E-series in a TFSA?


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## MoneyGal (Apr 24, 2009)

I like what Ponderling said. 

My only other comments would be that IF you decide to reintegrate back into Canada, and IF you decide to do that after a significant period of time in Vietnam (I don't know what "significant" is - maybe 10 years? 15 years?), you MIGHT find that you are "behind" where you would otherwise be relative to Canadian peers and the Canadian standard of living, and that might be a problem for you. 

For example, you will not have made CPP payments and you will erode your OAS eligibility from what it would otherwise be if you'd stayed in Canada. 

This isn't a reason not to follow through with your plan. Just fodder for thought. By the same token though, you are further ahead than many of your peers at your age, so it may take a long time for you to "fall behind." My thoughts are coming from the idea that many Canadians build retirement income "invisibly" through CPP contributions and residency requirements for OAS - they are doing it without being fully aware of it. If you don't build that retirement income security (which you would otherwise have) AND you plan to retire in Canada, you might want to think how to "replace" that income. 

Good luck!


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## kcowan (Jul 1, 2010)

+1
We are beneficiaries of those invisible Canadian retirement benefits. Plus we snowbird in Mexico so that our spend is substantially lower for 6 months a year. I think the issue for OP is benefitting now versus benefitting later. But if they love the lifestyle in Vietnam, they may be well-positioned to live in a low-cost environment without government support.

(I know several people who do web development from Mexico, getting NOTB pay rates while paying Mexican costs.)


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## marina628 (Dec 14, 2010)

Keep the two homes ,that is your Canadian income which you have to pay taxes on and can get cpp benefit from.I have a friend who left 6 years ago on a 3 month holiday , he found a girl and married her and has not returned since then.His revenue is online marketing and he lives like a king on $600 a month there.It helps that he moved in with her and her parents and he loves the culture and the people there.Jim is not claiming any income in Canada he is doing everything there on the ground.


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## marina628 (Dec 14, 2010)

I am jealous of people that can pick up and leave ,I could never leave Canada for longer than 3-4 months.The winter is what drives me away .


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## MoneyGal (Apr 24, 2009)

With two properties, it is possible the OP could elect to have the income treated as business income (subject to CPP premiums), as opposed to income from property (not eligible for or subject to CPP premiums) -- but the OP would have to provide services beyond simply renting space. 

(For more info, see this bulletin on the CRA website: http://www.cra-arc.gc.ca/E/pub/tp/it434r/it434r-e.html )


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## marina628 (Dec 14, 2010)

I have the staff I need but to give you an idea on other ways to earn income we have people we are paying 4 cents a word to write content for our websites , others we pay up to $20 per hour and some we are paying $15 a page.There are many jobs you can get online from anywhere in the world.I know people who work on fiverr.com that are making $2000 a month.


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## Nemo2 (Mar 1, 2012)

MoneyGal said:


> My only other comments would be that IF you decide to reintegrate back into Canada, and IF you decide to do that after a significant period of time in Vietnam (I don't know what "significant" is - maybe 10 years? 15 years?), you MIGHT find that you are "behind" where you would otherwise be relative to Canadian peers and the Canadian standard of living, and that might be a problem for you.


Along those lines.....the last time I was in Portugal, (about 25 years ago), I got talking to a couple Brits, (who were then the age I am now), and they mentioned there were 'quite a number' of ex-pat Brits who'd relocated to Portugal and were subsequently 'stuck' there because they couldn't afford to (re)purchase housing in England due to the price increases there viv-a-vis whatever their Portuguese holdings had appreciated/depreciated.


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## peterk (May 16, 2010)

marina628 said:


> I have the staff I need but to give you an idea on other ways to earn income we have people we are paying 4 cents a word to write content for our websites , others we pay up to $20 per hour and some we are paying $15 a page.There are many jobs you can get online from anywhere in the world.I know people who work on fiverr.com that are making $2000 a month.


I've been doing some reading about this line of work to potentially bolster my income and gear myself towards a location independent lifestyle (as part of my 5 year plan). I'd be willing to write for you in exchange for guidance and some contacts that might help me get started. I've been chatting with a gentleman that has some corporate clients that he's writing for and charging out $40-60/hour. It appears there's significant potential to break out of the low-wage elance/fiverr rut that 90% of freelancers fall into; If only you have the right attitude, skills, and professional image.

Are you interested in a mentee marina?

Sorry for the threadjack OP!


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## marina628 (Dec 14, 2010)

Sorry I get these requests usually attached with a great deal of money and my answer is no ,I am very lucky that the time I spend doing stuff online these days are by choice not because I have to.The person who writes our press releases for Market Wire charges me $125 per hour ,it really depends on your audience and the projects the expense it requires.One of the sites I just sold requires about $10,000 a month in content costs and worth every penny.


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## kcowan (Jul 1, 2010)

Marina

I think peterk is asking for how to learn your model. This might be a worthwhile venture on its own. Say for 20% of all the revenue they generate in 10 years. Not now because you are so busy but later on.


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## kcowan (Jul 1, 2010)

Nemo2 said:


> they mentioned there were 'quite a number' of ex-pat Brits who'd relocated to Portugal and were subsequently 'stuck' there because they couldn't afford to (re)purchase housing in England due to the price increases there viv-a-vis whatever their Portuguese holdings had appreciated/depreciated.


Yes when I was working part time in Malaysia and The Philippines, there were many Brits who were trapped. Most of them were happily trapped though...oriental girlfriends replacing ex-wives who had returned "home". Or just perpetual bachelors playing the fertile fields. (This was 15 years ago.)


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## marina628 (Dec 14, 2010)

I turn down at least $30,000 a month in opportunities like this from guys who are making $200,000 and want to figure how to get to a million dollars .It all boils down to my priorities , I like the time I have for my family , for playing poker and for hanging out with people like you.
Besides I am not in need of money ,I can spend 5 hours trying to teach people to make money or I can spend 5 hours playing poker and make $2000 -$10,000 depending on the buy-in .
I did this a few years ago helped a guy out who had 60k in his site and making $100 a month , you know how he paid me back ?He tried to copy most of my big site and for a while he out ranked me in google so for that reason anything I do I keep to myself for myself ,that is the #1 lesson I learned about working online is never to share your process.
BTW when I realized what this 'friend' was attempting to do , i fed him bad info and his site is now banned in Google , I also reported him to Google for copying my content.
The reason I sold out most of my money makers this year is because I want to relax and not work so hard ,I now work 2-3 hours a day just telling my staff what to do and I enjoy reading this forum and looking for real estate .I am a horrible teacher and I will make Peter cry lol


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## SpendLessEarnMore (Aug 7, 2013)

so I decided with my $10k to invest it into TD E-series.

25% S&P/TSX Composite Index 
25% Dow
50% S&P 500 

Again thanks for all the great advice. I feel with the way I was brought up I'm thankful for where I am now. Happy. I'm never greedy for more money. I feel like I don't need anymore money and can survive on what I have now without coming out in the negative cash flow at the end of the month. Any extra money I make is a bonus for the future. I'm just looking to grow my money and prepare myself at best in the next 5 years for when the housing market correction and rising interest rate comes and I may need to draw upon that extra cash reserve.


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## SpendLessEarnMore (Aug 7, 2013)

so my first Monthly report hope I've done it right. If not let me know what I can improve on.



This monthly report just from August 9 to end of month so doesn't include my rental revenues. It includes 1 bi-weekly paycheques of 1763.75 and $1458.20 prepayment penalty refunded from porting the mortgage.


$300 on utilities
$250 on eyeglasses (saved $450 from groupon and company benefits)
$1250 paid off visa
$400 withdrawn from chequing

Transferred $10k into TD E-Series so really my chequing account. 2 hard lesson learned. Patience and reduncancy. I saw both the S&P 500 and DJI near it's high but was anxious to put my money anywhere as soon as possible. Got it near it's peak when I should have waited for a pullback. I liked the TSX very much should have weighted it more. Thanks for others pointing out to me that S&P and DJI both follow each other though DJI lags a bit more. Will sell my DJI when the chance arises and move it into TSX.

Also thanks for the advice of selling one of my properties. I really bought it not only for the rental income but the speculation of it rising it price. It's appraised by the city at $216k and I got it for $191k. I'll wait until Calgary booms again and given the right opportunity I'll sell it for $250k whenever that is possible whether 5 years or 20 years from now.

I've got my website blog up and lots of tweaking to do. Tried moving all my banking to HSBC. I'm most interested in the re-advancable Equity Power Mortgage and InvestDirect low commission rate of $6.99. The lender put in my mortgage application says my FICO score is good, shouldn't have a problem being approved. Haven't heard back from him all week except a missed call and I called at least 3 times a day. Will wait and see next week I guess otherwise can try TD for a HELOC investment loan.

Otherwise $3200 in income and $2200 in expense coming out in the positive not too bad considering most of what I spent on the visa was towards some minor stuff with the newly purchased house.


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## SpendLessEarnMore (Aug 7, 2013)

September turned out to be quite a busy financial month for me. Tried securing HELOC at 3 different banks (TD, HSBC and ATB) without any success. TD denied my HELOC application due to what their computer spitted out was a 61% debt ratio! From my calculation and it was higher than what the other 2 banks computed my debt ratio to be was in the mid 30′s. Got approved for a HELOC wtih ATB and HSBC but didn’t like what they offered so turned them down. Good news though I did renew my mortgage due for renewal this upcoming April at 3.8% for 5-year fixed. Bit too high but overall happy I won’t have to worry about my mortgage payments for next 4-5 years.

$2903.84 Net Income from my full-time job

$350 paid off on Visa
$128 profit or 1.28% selling E-Series after 32 days holding
$1750 net increase from the 3 bank accounts
Transferred $6000 more into TD E-Series from my chequing account.

Received $9.99 trade promotion from TD Waterhouse. Bought 658 shares of RioCan (Rei.un) at $24.48 and capturing $77.32 of dividend payable on October 7th.

Applied for the MBNA 0% interest for 12 months promotion hoping to be approved and use the fund for stock trading in a Self-Directed RSP. This will hopefully accomplish 2 objectives. Reduce my taxes and hopefully earn income in a tax sheltered account.

Got one monkey of my back replacing the furnace and air conditioner on my Mississauga property that came with the house in 1982. Total cost including labour about $4000 and maybe less once I fill out the rebate sheet.

So starting next month with my mortgage rate 0.49% less and trying to get 30 trades in before the end of the promotional period of October 31st hopefully my networth will increase at a quicker pace.


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## SpendLessEarnMore (Aug 7, 2013)

Great month of October! Thanks CMF! I think just forcing myself to track my finances has helped me spend less. 

$300 of personal spending in October while the rest of the expenses all house related. Of which $100 went to phone cards. Yes if only my fiance knew how to use technology I could have bought her an Iphone and Yahoo IM voice and video chatted with her.

Took full advantage of the $9.99 trade promotion by TD to the end of October. Just managed to get exactly 30 trades at the end of the month. My first full month of stock trading all in my TFSA. I added $6000 on September 23rd. I made $761.41 of capital gains and $224.37 of dividends received in the month of October for a total income of $985.78. Happy to have made some money but skeptical I can continue this success considering how well the TSX performed in October.

Finally received my 0/12 MBNA card after Applying in September. Balance transfer of $6400 to my chequing account still pending. My investment/trade setup slowly getting to where I want it before I quit my job in January.

Signed up for 2 promotions. The TD mutual fund $100 bonus and ING Thrive chequing account $100 + $50 bonus for having a referral. MBNA RFD $60 bonus for apolying for MBNA card still pending.

Just 2 more months to go until I quit my job and go live overseas for a few years. So excited!


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## none (Jan 15, 2013)

Nice work! 


Free tip: Pie charts are terrible for actually conveying information. Serious, really, really bad. Switch to ordered bar charts.

http://www.stevefenton.co.uk/Content/Pie-Charts-Are-Bad/


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## SpendLessEarnMore (Aug 7, 2013)

Thanks for the advice. Always appreciate it.


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## none (Jan 15, 2013)

Much better - If you want to really keen out and want to compare Sept to October you should standardize the x - y axis. The eye here picks up that your load ballooned in Oct when in reality it is the same. So standardize to plot 1 (y-limit=$1500) and keep the same ordering as well. Looking better!


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## SpendLessEarnMore (Aug 7, 2013)

ok thanks. Guess in the future I will have to import the bar graph to excel so that I can standardize it. My expenses are pretty uniform for now anyways. Just wanted to illustrate the personal savings. Learning a lot. Just few days ago I picked up on Google Finance spreadsheet. Wow is it advance. Lots of handy features to play around with.


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## SpendLessEarnMore (Aug 7, 2013)

Getting killed on stocks. Oh well hard lesson learned on panic selling. If I held onto those 2 stocks for a few days I would have made a bit of profit instead of a huge loss. Still learning and at least overall I'm about even on my original capital. Just have to chock it up to learning fees.

Signed up for 2 more brokerages. $23k RRSP Cdn with Questrade and $10,600 with Interactive Brokers margin account. Withdrew $12k from my TFSA.

I like IB's platform. Can put a buy and sell for profit before I head off to sleep and wake up with some money made. I'm on a cost basis with IB which means most often I get less than 0.5 cent/share.

Questrade I get 100 free trades but quickly learned ECN fees are not so friendly. Well more so with Questrade than IB which also charges ECN fees on a cost basis.

Borrowed $6400 for 12 months at 0% interest from MBNA credit card and $14,500 from my TD Visa at 3.9% interest for 6 months. MBNA charges 1% transfer fee while TD charges $10 transfer fee. Will have to make sure I pay those loans back a month early from my paycheques, company pension and tax return.

Taking advantage of ING's $150 bonus promotion and TD's $100 bonus promotion for mutual funds.

1 more month until I quit my job. I'll head back to Toronto for 2 weeks before I fly off to Vietnam. Haven't seen my parents and my huge family for a long time. Also need to move most my stuff that I've accumulated in Calgary back to Toronto.

Need to stop getting greedy but at least I came out of the month reasonably ok.


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## SpendLessEarnMore (Aug 7, 2013)

I quit my job in December 2013 and it's been hectic ever since. So almost 2 years since my last post. During those 2 years I haven't worked a single job, got married, had a kid and splitting half year between Toronto and Vietnam. My wife upon her first pregnancy discovered a tumor and had a miscarraige as a result. Been tough but she got pregnant less than a year later and now taking care of our 2 months old baby. 

She is currently not working as well so pretty much we're living off my savings and rental income.

Sold the house I estimated to be $300k near end of 2013 for $385k so mortgage M is off the book. Paid off all my credit card debts. Just have the 1 mortgage left with 1 potential mortgage in the future. Had bought a pre-constructed house in 2013 to live in and it still hasn't been built yet. 

Got hammered in the stock market because playing with speculative stocks. Now going to focus on dividend only stocks. Have $1100 dividend so far coming in end of September. 

Let's see if my dividend income will be enough to live off.


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## peterk (May 16, 2010)

Welcome back! Sounds like a lot of life changes and congrats on the baby!

Are you now thinking about taking on a stable jobs that is unrelated to daytrading your way to prosperity with <$200k in capital? Your networth since 2 years ago has gone down by 40k once you adjust for the housing sale. A small amount of rental income plus whatever amount of gains you are hopefully making by trading clearly isn't sustainable at this stage in your career. I hope you are considering other ventures as well.


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## james4beach (Nov 15, 2012)

Congratulations on your baby! That's great. Also excellent that you paid off the credit cards.

So it looks like you have a 161 K investment account. Unfortunately this seems like too little capital to live purely off dividends. A normal/sustainable level of dividends is currently believed to be around 4% to 5%. Even using the optimistic 5%, that gives you dividend income of around $8,000 a year - not enough to live on.

You're probably looking for stocks that pay higher dividends, but that won't solve the problem. This gets to the illusion of dividends. No matter what kind of stock, no matter the dividend level, a general stock is only expected to have a total return of 5% to 6% a year. Let's call it 5.5% annual return.

The 5.5% total return is the critical part of the math. The dividend is secondary; it's just a mechanism to pay out value. So this 5.5% total return can come in various ways:
a) 3.5% dividend + 2.0% capital growth = 5.5%
b) 5.5% dividend + 0% capital growth = 5.5%
c) 8% dividend - 2.5% capital reduction = 5.5%

You see, the dividends aren't free money. They're just a mechanism for giving you some (or all) of the total return. If you go with option (c), you will see your capital shrink over time and the end result will still be the 5.5% total return.

And therefore the actual dividend level is somewhat of a moot point. The expected total return is 5.5% from which you might be able to extract 5.0% sustainably, without hurting your capital.

I'm sorry to describe this, but it's the reality we all deal with. For an all-equity portfolio, you can only extract about 5% of its value per year. If you extract more, your capital will decline. Dividends don't change the math at all. This is fundamentally about _average stock market return_.


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## james4beach (Nov 15, 2012)

By the way, with a larger amount of investment capital this could work, perhaps if you sell the house and work a few more years. How much annual income do you actually need? Around $15,000 ?

An investment account with 300 K in equities can generate sustainable income of around 5% = $15,000 without depleting capital.

Beware the temptation to try this with too little capital. If you use 250 K in equities, you'll also need to liquidate some of your portfolio each year to achieve $15,000. A rough calculation shows that your capital will last 25 to 30 years, and then will be gone. I presume you're going to live more than 30 years.


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## My Own Advisor (Sep 24, 2012)

I'm personally aiming for 4% yield from my investments. If I get more, great.

This means an investment account with $300k in equities should safely target $12k per year in cash flow without touching the capital. The reality is, if you want more cash flow without touching the capital, you need to save more and invest more. Buying more risky assets is a bad idea.

I would agree with james - total return matters and dividends is a good portion of that critical math. 

Lastly, congratulations! You seem to be doing great.


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## james4beach (Nov 15, 2012)

^ My updated number agrees with My Own Advisor, using 4% is best...

Silly me, I assumed that an all-equity allocation lets you have a 5% sustained withdrawal rate (SWR). It turns out this isn't necessarily true, and more equities may not give you an advantage of a stock/bond mix. It still seems that 4% SWR is the realistic maximum, possibly even overly optimistic.

Thus, if the OP is trying to retire off his investment capital, he should calculate approx

*Required nest egg = Target income / 4%*
e.g. $15,000 / 4% = $375,000 in a mix of equity & fixed income


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## My Own Advisor (Sep 24, 2012)

I think 4% remains a good target to "live off" capital. At least that's mine.


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## Ag Driver (Dec 13, 2012)

Deleted


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## My Own Advisor (Sep 24, 2012)

I've started the math...back of napkin kind of stuff...

I figure we need to derive 4% income from $1 M invested outside of any pensions, or house assets, based on current expenses (and also forecasting some expenses during my working life will be non-existent in retirement). Those include some workplace lunches, gas for the car to commute every day, maybe even going down to one vehicle. 

We of course need to have no debt at the time of "retirement" - I take this as a given. Until there is no mortgage debt, I can't contemplate retirement even if we're close to our 4% benchmark. I don't want any liabilities. That's just a personal risk thing...


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## OnlyMyOpinion (Sep 1, 2013)

Some of you clearly know this, but just to make sure everyone is aware - the "4% rule" spoke to a fixed 4% annual withdrawl of your initial portfolio value (of approx. 50% equity/50% bonds), plus an amount to cover inflation, intended to last 30 years, and to deplete the portfolio -not leave the principal intact.
Among several discussions, Mark Goodfield "The Blunt Bean Counter" provides a very good review with lots of good comments. It is broken into 6 parts. Parts 1 & 2 linked below: 
http://www.thebluntbeancounter.com/2014/02/how-much-money-do-i-need-to-retire-heck.html
http://www.thebluntbeancounter.com/2014/02/how-much-money-do-i-need-to-retire-heck_5.html


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## james4beach (Nov 15, 2012)

It's really interesting stuff. There are variants of the method, better strategies where you don't withdraw a constant 4% but instead vary the amount depending on what the market is doing. "Withdraw" can mean in dividend forms ... again dividends are just a delivery method, not the core concept.

What surprised me, looking at the modeling, was that there is no significant benefit being 100% in equities. It appears that some mix like 60/40 may be close to ideal once you are in the living-off-capital stage of life.

i.e. high % equities do make sense pre-retirement when you're growing your nest egg ... but once you retire, a 50/50 or 60/40 mix is nearly ideal. Retirees do not need to maintain all-equity exposure; there is apparently not much benefit from doing this.


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## SpendLessEarnMore (Aug 7, 2013)

Thanks for all the helpful advice. 

I just started investing this $155k on September 2 and here's what I've done last 5 sessions. I'm slowly moulding this portfolio based on dividend growth. Need to get rid of ts.b and reduce my positions on cnq and ifc. Always on the look out for more stocks to add. I'm eye balling ftt at the moment waiting to get in at $21.20.

My expenses are minimal as I'm a snowbird spending minimum 181 days in Canada for tax purposes and the rest in Vietnam. While in Canada like right now I'm staying with my family. When in Vietnam my monthly budget is about $500/mth where average monthly wage there is less than $200/mth. 

Thanks Peter. I'm not impressed with how I've handled my finances prior to my house being sold but I've learned some hard lessons. One is if you fail make the adjustments and keep trying. Since I'm in my 30's working a side job/venture is definitely within my long term plans. 

I see this cash injection as my new slate to work with and hopefully I won't repeat the same mistake again.


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## lost in space (Aug 31, 2015)

james4beach said:


> i.e. high % equities do make sense pre-retirement when you're growing your nest egg ... but once you retire, a 50/50 or 60/40 mix is nearly ideal. Retirees do not need to maintain all-equity exposure; there is apparently not much benefit from doing this.



As someone who is now on the home stretch to retirement (8-10 years roughly) this bear market has been a huge eye opener. My stock ETF is down some 15% while my bond ETF is down 2%. It was a very real life example of having a balanced portfolio in retirement. Pulling money out of my stock ETF would have hurt badly. What I will do, since I have time, is to sell off the bond fund and move it into my stock ETF (XEI high dividend yield fund) while prices are depressed later when it recovers I’ll sell off and move it back into the bond fund. I figure 3-5 years for the TSE to recover at that point were within a couple of years and I’ll start moving money into bond funds to make sure my funds are safe for the first 3 years - I expect that my nest egg will be in the $300,000 which I plan to spend down to zero over 12 years. I've estimated we can pull out 25,000 a year. 




SpendLessEarnMore said:


> Thanks for all the helpful advice.
> My expenses are minimal as I'm a snowbird spending minimum 181 days in Canada for tax purposes and the rest in Vietnam. While in Canada like right now I'm staying with my family. When in Vietnam my monthly budget is about $500/mth where average monthly wage there is less than $200/mth.



That’s exactly the goal of my wife and I have for retirement (except I want to remain a non resident) the problem is coming home for a longer stretch means you need a place to live, a car, phone etc and then you’re talking big bucks. I mean 2 weeks with family, ok, but 6 months or longer never!

Edit: thanks for updating, for some reason there are very few blogs from people who've done like you and lived abroad. Loads of information about moving and cost of living but very little of boots on the ground kind of stuff


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## james4beach (Nov 15, 2012)

lost in space, not to hijack the OP's thread but you may want to be cautious about that kind of short term trading. Sloshing funds between sector or funds within a time span of a couple years tends to not be profitable. It's a kind of churn and inefficiency and it's extremely tricky. Just think of how many prerequisite conditions need to align (how many predictions need to come true) for this to work out the way you want. Guessing one thing may be 1/2 probability, but guessing that 3 things all happen in series, the odds drop to 1/8


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## enriquegill012 (May 10, 2015)

It's really amazing to see people who budgets their funds properly. I have always wanted to do it but I just really can't. I don't have the discipline needed.


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## SpendLessEarnMore (Aug 7, 2013)

I got too high on POT. Seems I spent less than $1000 this month. Wife's grandfather passed away so I sent $400. 

$100 ($150 reward points) one-way plane ticket to calgary to evict my tenant that hasn't payed for last 2 months and owes over $5000 in rent. RTHDR hearing this Friday. I showed up to the house and find he's got 2 renters, 2 massive flat screen tvs, sectional sofas and all sorts of luxury seating, etc... I think writ of possession is enough to cover the arrears he owes but since he's my former co-worker I'm going the garnishee route.

Middle of September I had this stupid idea to try converting my CAD to USD on Interactive Brokers as an experiment since I will need USD soon. No reserch no inkling of attempting to trade. Did my first conversion and made a small profit. This can't be too easy. Tried another one and another and profit after profit. No idea what I was doing was right or not. Just buying on the low and selling at the high. No charts no fancy magic words. 

Maybe I need to learn some financial jargons like moving average, resistance and support. Or learn 1 trend a month. I just know to buy low and sell high or sell high and buy low on my stocks and forex.

disclaimer: I know I didn't include market numbers. My stocks are mainly to hold for dividend and sell when there's a profitable position so why dwell on such negative numbers. Need to smoke away those POTS.


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## SpendLessEarnMore (Aug 7, 2013)

update on evicting tenant in Calgary:

1) attended the RTDRS hearing today. Tenant was also present. Tenant gave the usual sob story. I'm on 30 days stress leave because my renters are not paying me and taking off. <judge> you're subletting? 
Tenant just goes on and on story after story than judge ask so can you pay? total dead silence. I'm just listening while my tenant incriminates himself. Can you pay $1250. I can pay couple hundred.
<Judge> I'm going to terminate this tenancy and you have to leave. Each day you stay in October you owe landlord $50/day so sooner you leave better for you. I'm giving landlord can file application for other remedies at no cost to landlord effective until November 30.

2) so I get my judgement order and take c-train 2 stops to Court of Queen's Bench to file the judgement order.

3) I serve my tenant the filed judgement order.

4) I have to now go back to Court of Queen's Bench to file that I served tenant judgement order.


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## SpendLessEarnMore (Aug 7, 2013)

wow did I get lucky with POT roaring back. Ex-dividend tomorrow and who knows what direction POT will go from there.

5) filed the affidavit of service at Court of Queen's Bench.

6) picked up the Writ of Enforcement forms and a little book 'Getting and Enforcing Your Judgement in Alberta.'

They asked me if I needed a baliff to evict my tenant which I said no just want to garnish his wages. My tenant got a unionized job that pays a lot. He will be stupid to quit his current job. 

So I guess I will wait until Monday when my tenant is supposed to move out and I can than fill out the writ of enforcement. Reason have to wait Monday is because in the judgement his tenancy ends end of September and each day he stays after I get $50/day. So I need to know when he officially leaves to calculate in total how much he owes.


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## techcrium (Mar 8, 2013)

I don't understand your portfolio, you say you have $171,000 in IB but why does the book value say $300,000+?


Edit: Oh....those were heavily losses...


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## SpendLessEarnMore (Aug 7, 2013)

margin


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## SpendLessEarnMore (Aug 7, 2013)

Late update since the last week I have been without internet and had to be at Tim Horton's at 7am before TSX market opened to put my orders through. Spent the entire October in Calgary where I have no family and spent everyday eating out. Was quite the expense.

Contrary to my name I spent a lot in October and plan to spend a lot in November too. Spent about $14,000 ripping out all the carpets in the house and replacing it with laminate flooring and demolishing the old deck with an even longer deck. Overall I think it will increase the house value and maybe I might get more than the $14,000 spent upgrading when it comes to sell the house. The intangible is the overall satisfaction my new tenant will get now and my family will get in the future when we will call it home.

Speaking of new tenant. I evicted the old tenant and was about to garnish his wages until I discovered he got a court ordered orderly payments of debt. So he owes his creditors $10,000 and me $5800. He had to list all his expenses and it came out that he would have $180/mth to pay his creditors. That works to about $100/mth to me for next 6 years (5% interest). The part that infuriates me is he makes more than $60k/year and has no car, house or student debts but after all expenses he can only afford to make $180. 

I sent $1,000 to my wife who is taking care of our daughter on her own. Man I missed them. 2 months I have been away from them but everyday I get to see my daughter grow on Skype.

I withdrew $5,000 from my Interactive Brokers account. Don't know how to properly account for that. Waiting for Quickens hopefully it will automate most my issues without having to manually fix my issues. Despite losing $900 on the forex I made $24k for the month of October.

I used my credit card to pay for the home reno supplies so ran it up quite a bit. Will have to do a big draw down on my interactive brokers account to get it back to $0 and my chequing account up over $5,000 along with taking some money back to Vietnam.


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## SpendLessEarnMore (Aug 7, 2013)

Been pretty busy since lat month manually entering all my stock transactions into this new 2016 Quicken while trying to take care of my 6-month old baby. I get about 2 hours sleep max a day and try to catch power naps when I can. 

I landed in Vietnam last month so their timezone is exactly 12 hour difference so I'm up at night when the tsx opens.

I will give a quick snapshot of my entire year ending Dec 31,2015.

Networth: $262,499.41 18.24% increase for 2015

*Income*

Capital gain of $50.8K and $12.8k of dividend. $1380 of margin interest and $30k withdrawn from my Interactive Brokers account.

Made about $16k in November and $8k in December. Made over $10k on forex trading in the last 3.5 months.

*Expense*

Budget spending of $1200/month in Vietnam + 1000/mth on my house

Have put up a big whiteboard and wife and I jot down everything we spend immediately on it. It's broken into 4 parts; Food, house expenses, our daughter and all else.

Breaking it into 4 general categories has been great. We no longer argue over the fine details of what we spend since we only know what we spend in the 4 general categories.

A $1200/mth budget is pretty big when you consider Vietnam's monthly average income is $200/mth. That's just giving it some perspective of how comfortable we like our lifestyle and affording the best for our daughter. We haven't gone on vacation or spend much if any on ourselves but we just don't see the need to do so with our focus on our daughter.


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