[ashin1]

Hey everyone,
In December 2012 I was given an opportunity to get a career in the health care field that is very lucrative. I didn't know what to expect when i took the offer, but after a year of working, i grossed 130k. This year I got a dollar raise so I'm sure reaching 130k again will be realistic for 2014.
Rewind to 2010 i graduated tech school when i was 19 and working and living rent free so i was able to pay off all my debt by 2012(student loans and car payments).
fast forward to august 2013 i traded my car in and bought a truck(not a smart move which hindered my saving goals) however it was able to pay it off by the following November. Being debt free i started my journey of saving 5 months ago.
The only book as far as investing i have read was "the lazy investor" by Derek Foster which got me started towards the path to financial freedom.

Current Assets:
TFSA: 27K
RRSP: 7k
Cash: 1.5k
SAVING: 1.5k

Total Assets: 37k

Liabilities:
MASTERCARD: 300$

Yearly Expenses (estimated for 2014)
Rent: 5k
phone/internet: 1.8k
gas for truck:3.5K
food: 4K
misc: 10K
professional fees: 1.2k
truck insurance: 2.2k

Total Expenses: 27.7k

Im in the 36% tax bracket, so i should be taking home 83k from a 130k income.

after expenses i should be able to save aprox(83-27.7) 55.5K left over to save per year!

So hopefully ill try to put away 4.6k away per month.

So first thing is first I'm going to max out my TFSA.
My TFSA is put into a self directed broker account, every dollar in it is invested companies which pay out dividends which I have enrolled in the DRIP plan
current holdings:

BMO: 104 shares
REI.UN: 15 shares
HR.UN: 209 Shares
NA: 200 Shares
RCI.B: 122 Shares

My annual dividend yield should be around 1.7k

My RRSP is currently being transferred to another self directed account and being taken out of mutual funds,
going to invest in more canadian companies with it until our dollar is up to par with the Americans.

I have a lot of Room to contribute to my RRSP over the years that i never contributed when i should have. so most of my saved money will be put into that account.
once my RRSP account is maxed out I will then set up a cash account to do more further investing.

My goal this year is to have as close to 100k in assets! hope this goal becomes a reality by 2015!

Im still very new to the idea of aggressive saving so any input would be great! Thanks for your time everyone!

HAPPY SAVINGS EVERYONE!

 

[hboy43]

Hi:

If you are making $130K you are either not in the combined 26% tax bracket, or you do not live in Canada. That might be the federal tax only number.

 

[ashin1]

Hi:

If you are making $130K you are either not in the combined 26% tax bracket, or you do not live in Canada. That might be the federal tax only number.

whoops! you are correct!

Ill definately have to go back to the drawing board!! thanks!



****fixed OP

 

[Spudd]

You can figure it out with this calculator:
http://www.taxtips.ca/calculators/basic/basic-tax-calculator.htm

 

[ashin1]

You can figure it out with this calculator:
http://www.taxtips.ca/calculators/basic/basic-tax-calculator.htm

hmm so that would put me at a 28.3% tax bracket

leaving me to net 93k to after taxes. hmm well ill find out next week when i do my taxes haha....hope i get some money back hehe

 

[Mortgage u/w]

Where you from? Cause if you're anywhere near ON or QC, you tax bracket should be well over 40%.

In any case, your on the right track - You have a budget planned out, you know where your expenses are and you have a savings strategy in place.

All I can add is to maximize your RRSP to benefit from max tax sheltering. Keep expenses low and savings high! Do not go out and upgrade your vehicle!! As you already saw, you will take a hit on your savings again. The only debt you should get is a mortgage - besides that, remove the word 'loan' out of your vocabulary.

 

[ashin1]

Where you from? Cause if you're anywhere near ON or QC, you tax bracket should be well over 40%.

In any case, your on the right track - You have a budget planned out, you know where your expenses are and you have a savings strategy in place.

All I can add is to maximize your RRSP to benefit from max tax sheltering. Keep expenses low and savings high! Do not go out and upgrade your vehicle!! As you already saw, you will take a hit on your savings again. The only debt you should get is a mortgage - besides that, remove the word 'loan' out of your vocabulary.

I live in Alberta, yes, definitely done putting money into my truck! yeah my TFSA will be maxed out really soon! and hopefully i can max out my RSSP this year, i feel so behind!! i would like to own a home one day but where I'm living it(northern Alberta) it wouldn't be a good idea to buy a home, buying is easy part, selling is the hard part.(lots of transient workers, and housing market has very little curb appeal). For me i want to be able to get up and go, without having to worry about selling a house. For now i want to have most of my money (85%) invested working for me!
what is this word "loan" you speak of...never heard of it haha

 

[peterk]

i feel so behind!!

hehe. Oh don't worry, you aren't. Most 23 year olds don't have 37k and make 130k, nor do most 30 year olds, and probably 35 as well.

Are you doing your taxes yourself? Don't forget that you might qualify for a Northern Resident deduction. Check the official list for your city/town in northern Alberta.

 

[ashin1]

hehe. Oh don't worry, you aren't. Most 23 year olds don't have 37k and make 130k, nor do most 30 year olds, and probably 35 as well.

Are you doing your taxes yourself? Don't forget that you might qualify for a Northern Resident deduction. Check the official list for your city/town in northern Alberta.

haha thanks man, i still think about the money i put into toys and if i would have had more discipline i would be much further none the less, at least i started now

ill have an accountant do my taxes this year, i am mos certainly eligable for northern resident deduction!

 

[gladaki]

Do you mind telling which job in alberta health sector pays that much as starting just curious..
ARe you doctor?

 

[Homerhomer]

23 year old, making $130k and already interested in taking a hold of your own financial future.

Congratulations, you are doing fantastic.

I really shouldn't give you any advise since you are much smarter than me, I would only suggest setting realistic goals so you can also enjoy the fruits of your labour and not becaming obsessed with savings, planning for the future and financial independence doesn't mean that you can't enjoy life now ;-)

 

[ashin1]

@gladaki-no i am not a doctor haha, they make around 400k a year where i work/live

@homerhomer- Thank you! I know what you mean about setting a realistic goal and not getting too obessed on saving however, the more i get involved with my financials the less of a chore it becomes and more of a hobby, i truly enjoy managing my money and making it work for me, its almost like having a bunch of little employees working for you and managing them its quite fun. i'm sure lots of people on this forum would relate
however one thing to consider is before you invest in money and wealth, you must invest in your own well being and health, no point on being wealthy if your sick, so going to the gym and eating proper is another hobby that gives me a break from pinching pennies haha.

 

[ashin1]

Update.

So even though I have enough share to drip with HR.UN, the dividends came in on 2 different payments for 21.57 and 1.94. I phone my broker as to why this happened he said it was a shared trust and that because of that i get paid on 2 different payments on the same date.
luckily I wanted to get rid of my shares with REI.UN anyways and bought 19 extra shares in HR.UN, so hopefully i can get DRIP in the next payment date.

Never the less i just got paid and
I just depsoited another 3.3k in my TFSA
and i just deposited 1.2k into my RSSP
with 2k left in cash

Current assets now:
TFSA: 30.8k (its maxed but markets are fluctuating)
RRSP 8.2k
CASH: 2k

Liabilities: 0$

Total ASSETS: 41k

Question, i have 3.3k in cash in my TFSA left i want to invest with, and 8.2k in cash to invest with as well, should let my money idle until a correction or buy now?

 

[peterk]

I'm holding mostly cash and adding only to cash. I have around 25k in stocks and 45k in HISA. But I am maybe, possibly, perhaps saving for a house. So your situation might be different.

I am not in a big hurry to buy stocks at these high market prices.

 

[ashin1]

Update!
well finally have my RRSP set up into a self directed account! will patiently be waiting for a correction to make any big purchases. Also just got back from a trip to Korea, and was able to stay on budget!

current stats
TFSA: 31.4k
RRSP: 15.4k
CASH: 2.2k

Liabilities: 600$ credit card

Total assets: 48.4K

almost at halfway point for my goal for 2014!

anyone else waiting for a market correction?

 

[Mortgage u/w]

anyone else waiting for a market correction?

Nope. And not concerned if there is one. Might have some dips here and there....but overall, market should perform well if you hold solid dividend paying stocks. Tough to time the market.

Look at it this way; when market is down, your DRIP buys you more stocks. When market goes back up, dividends increase getting your further ahead.

 

[Time4earlyretirement]

Nope. And not concerned if there is one. Might have some dips here and there....but overall, market should perform well if you hold solid dividend paying stocks. Tough to time the market.

Look at it this way; when market is down, your DRIP buys you more stocks. When market goes back up, dividends increase getting your further ahead.

Not if you're buying these dividend paying stocks overpriced, otherwise I do partially agree.

 

[peterk]

Is DRIPing really DCAing? I mean I guess kinda, but it's not "new" money, just your same investment in a different form. If your dividend pays 2% at $100, then when the market crashes to $50, your dividend payments now drop the stock 4% instead of 2%.

It's not like injecting new cash at regular intervals to take advantage of down markets (DCAing)... is it?

 

[Mortgage u/w]

Is DRIPing really DCAing? I mean I guess kinda, but it's not "new" money, just your same investment in a different form. If your dividend pays 2% at $100, then when the market crashes to $50, your dividend payments now drop the stock 4% instead of 2%.

It's not like injecting new cash at regular intervals to take advantage of down markets (DCAing)... is it?

The point is the lower price buys you more shares which in turn will pay out more dividends.

 

[ashin1]

Its unfortunate discount brokers won't allow you to purchase fractional shares with your dividends