[m3s]

Net Worth

TOTAL: $ 1,384,000 ( -53,000)

The spending keeps going up, I don't know why. I don't think wife's buying too much crazy stuff and I know I'm not. Must be that inflation everyone's talking about

On the last NW chart I can extrapolate that momentum. Multimillion comes a lot faster than you think after the first 10 years maybe even within 10 with an energy spike

If you look back at how hard it was to get the first $100k NW vs the $100k increments to $1M you probably already see how the snowball picks up momentum

Might be a good period to DCA more of that cash into something. Smith maneuver might be worthwhile tax move if rates are higher (seems like it was forgotten during low rates)

 

[peterk]

Great update Peter and the time off with family is a wise decision. I wish I had taken more time when my family was young then I did. It took a pandemic for me to really put my priorities where I wanted them to be. Enjoy the time as it will go by fast. I went back and read a couple years of posts just to refamiliarize myself with your journey. Looks like things are on track. I did notice that you are always over budget on your spending. I don't believe you have a spending problem but perhaps a budgeting problem. I think you underestimate the cost of home ownership and having a family. I don't think you need to cut spending based on what you have posted but I don't know your day to day spending habits. The reality there is always something to repair with a home and kids will always cost more than we hope. It is not affecting your savings rate too much either as you have money paying down your mortgage and going to savings. One should not live like a pauper or a prince while raising a family. The kids will remember activities and time spent together so one has to find a middle ground. I am sure your Q3 post will be one about how your time off went by so quickly. Lastly, I suggest you fund the RESPs if you have the money. The government top up makes for an outstanding return. Not taking advantage of that opportunity is akin to not taking and employer match option on pension contributions. Perhaps you view it differently and I would be curious to hear your reason for being on the fence.

Cheers

Thanks for the thoughtful reply LC! Yeah - I don't have it in me at the moment to figure out exactly where the spending growth is coming from - $20k/yr of it is principle paydown on the mortgage - so not really spending, and $6k is part time daycare. Utilities are much more expensive than previous years, and more than anticipated.

I don't really have a "budget". I only pretend like I do... Really I just say "Woa that's a lot - let's not spend more than that! That's our budget." But...whatever

Literally the ONLY expensive thing that anyone could possible consider us having that is "above average" for the things we buy and do is this house that we live in. Everything else is ultra cheap and way below average in consumption for our income group...

Honestly I just know that we're so cheap and sensible from the 10 years prior of being cheap and sensible that I'm supremely confident that if $90-$100k is what we need to spend in a year, then I guess that's what it is! Obviously if we were not making as much money then I'd need to think long and hard about austerity, but fortunately that isn't the case.

Regarding RESPs - Firstly I can wait until they're 7 years old and then play catch-up with double contributions, and still get the whole grant. It's literally only $15k for two kids over 15 years, so I'm not really worked up about it either way. I guess more importantly though is that I feel I have too much networth already locked away in RRSP and pension accounts, and I'd rather consider my TFSAs as retirements accounts too. I can't see the next 5 years so clearly for our life plans, so I'd like to keep as much money available for whatever may come, specifically, the thought of just paying out the mortgage fully in 3.5 years once it's up. Lastly, I'm not so sure how I feel about giving the kids a free ride through college or not. I think it'll very much depend on how they're doing in life. I would likely lean more towards just giving them some small partial support through college, and then gifting them a big sum of money a bit later on. Obviously I don't know what I'm talking about yet (oldest kid is 2 lol) but the thought of having $200k in some RESP that my kids expect to be spent on them for schooling is something I'm a bit leary of. I knew a few kids like that when I was in university who were just flush with parental money flowing in, and I think it might've caused them more trouble than good honestly...

 

[peterk]

On the last NW chart I can extrapolate that momentum. Multimillion comes a lot faster than you think after the first 10 years maybe even within 10 with an energy spike

If you look back at how hard it was to get the first $100k NW vs the $100k increments to $1M you probably already see how the snowball picks up momentum

Might be a good period to DCA more of that cash into something. Smith maneuver might be worthwhile tax move if rates are higher (seems like it was forgotten during low rates)

I guess we'll see! Pretty sure I've had outsized returns in the last two years that I wouldn't imagine will continue. Along with adding to my investments from income savings seems to have dwindled as well recently due to cost of living. I can only manage to save 30-40k/year now at most, instead of $60k+ previously.

Also though, my assumption going forward is that my wife never works again - that's highly unlikely. Any income she brings in will be practically 100% straight savings.

No need for Smith maneuvering right now - just paying the minimum payment of my 1% mortgage that I still have 3.5 years to go on... I will probably pay most/all of it off with unregisted assets when the mortgage is up, and then might re-leverage to some extent based on how I feel at the time about markets. So probably won't be engaging in any long-term Smith maneuver scheme, as per the intent.

 

[scorpion_ca]

Regarding RESPs - Firstly I can wait until they're 7 years old and then play catch-up with double contributions, and still get the whole grant. It's literally only $15k for two kids over 15 years, so I'm not really worked up about it either way.

This is what happened with my nephew. His parents couldn't contribute earlier and now they are trying to catch up by contributing 5k per year. We bought all in one equity ETF in the last couple of years but the value of his RESP is down 5/6k now. He will need to use his RESP starting from 2024. Unfortunately we couldn't utilize the compounding on his account.

One the other hand, my another nephew is two years old and I am managing his RESP account and buying only XEQT with DRIP set up. Glad to see that compounding is working in his account.

I would suggest to invest early in RESP and let the compounding works for them.

 

[bigmoneytalks]

Thanks for the thoughtful reply LC! Yeah - I don't have it in me at the moment to figure out exactly where the spending growth is coming from - $20k/yr of it is principle paydown on the mortgage - so not really spending, and $6k is part time daycare. Utilities are much more expensive than previous years, and more than anticipated.

I don't really have a "budget". I only pretend like I do... Really I just say "Woa that's a lot - let's not spend more than that! That's our budget." But...whatever

Literally the ONLY expensive thing that anyone could possible consider us having that is "above average" for the things we buy and do is this house that we live in. Everything else is ultra cheap and way below average in consumption for our income group...

Honestly I just know that we're so cheap and sensible from the 10 years prior of being cheap and sensible that I'm supremely confident that if $90-$100k is what we need to spend in a year, then I guess that's what it is! Obviously if we were not making as much money then I'd need to think long and hard about austerity, but fortunately that isn't the case.

Regarding RESPs - Firstly I can wait until they're 7 years old and then play catch-up with double contributions, and still get the whole grant. It's literally only $15k for two kids over 15 years, so I'm not really worked up about it either way. I guess more importantly though is that I feel I have too much networth already locked away in RRSP and pension accounts, and I'd rather consider my TFSAs as retirements accounts too. I can't see the next 5 years so clearly for our life plans, so I'd like to keep as much money available for whatever may come, specifically, the thought of just paying out the mortgage fully in 3.5 years once it's up. Lastly, I'm not so sure how I feel about giving the kids a free ride through college or not. I think it'll very much depend on how they're doing in life. I would likely lean more towards just giving them some small partial support through college, and then gifting them a big sum of money a bit later on. Obviously I don't know what I'm talking about yet (oldest kid is 2 lol) but the thought of having $200k in some RESP that my kids expect to be spent on them for schooling is something I'm a bit leary of. I knew a few kids like that when I was in university who were just flush with parental money flowing in, and I think it might've caused them more trouble than good honestly...

You can have 200k and pull any.money to your rrsp. I rather have as much money in resp in case they become inspiring doctors and if that doesn't happen or they don't go to school,I'll just move the money to retirement. Point here is better have more money and be in a position to help.

 

[peterk]

This is what happened with my nephew. His parents couldn't contribute earlier and now they are trying to catch up by contributing 5k per year. We bought all in one equity ETF in the last couple of years but the value of his RESP is down 5/6k now. He will need to use his RESP starting from 2024. Unfortunately we couldn't utilize the compounding on his account.

One the other hand, my another nephew is two years old and I am managing his RESP account and buying only XEQT with DRIP set up. Glad to see that compounding is working in his account.

I would suggest to invest early in RESP and let the compounding works for them.

Definitely I'll have to think that all through again once the TFSAs are maxed - Probably end of 2023 or so - and then do some RESP spreadsheeting!