Canadian Money Forum banner

201 - 215 of 215 Posts

·
Registered
Joined
·
1,542 Posts
Discussion Starter #201
At work, Furlough was announced for Q2, which means 7 extra days off for a 10% reduction in pay that quarter. That was last week. With the drop in oil this week, I would expect that they are going to go even further shortly. I would think furlough for the rest of the year, and maybe double furlough at some point as well. They halted the matching RRSP contributions last time it was bad, so I wouldn't count that out either.
As I expected, they just announced double furlough now for Q2. So we get 1 day a week off, unpaid. So we're working essentially a 0.8FTE. They also suspended the matching RRSP contributions (5%). If 2016 is anything to go by (the last time they did this), the suspension will be in place for almost a year. I could see the double furlough continuing past June given the current condition of the oil industry. The program is Canada-specific. I am going to inquire about transferring out the group RRSP (Sunlife) to a self directed RRSP. Any transfers out used to result in a 12 month suspension of matching contributions, but if it's already suspended, I don't see any downside.
 

·
Registered
Joined
·
1,542 Posts
Discussion Starter #203
For Alberta, absolutely, it will be much worse than those two. At the current prices of Western Canadian Select Oil, there's no future for the oil industry in AB. Who knows if the price will stay there. I would guess that Russia might start wavering a bit on their price war as the virus appears to be starting to hit them hard.
 

·
Registered
Joined
·
12,524 Posts
I hear Russia is confiscating a portion of savings accounts to fund their budget.

This is pretty grim for the energy industry. It will take a while for demand to pick back up with so much of the economy idled.
 

·
Registered
Joined
·
1,542 Posts
Discussion Starter #205
We planned on developing the basement this year at a cost of ~$40K. Majority of the cash is already available for this, with the balance coming from cash flow. Might hold off on signing the papers for a few weeks and see how the chips fall with the oil industry. Our tenant (above the detached garage) will be up for her 3rd lease renewal in June. We plan on raising the rent by $75 which would essentially be inflation since we haven't touched it since she moved in.
We're also not doing either of these. The basement development will not happen this year as I'd rather deploy the cash in the market in a month or two, plus it's not recommended to have various contractors traipsing through our house for 8 weeks. I'll finish off one or two rooms myself to get some use out of it. I have lots of time to do that now! And the government has banned rent increases for the forseeable future, so that's not in the cards either. She's a student so it's not like she's going to lose her job.
 

·
Registered
Joined
·
564 Posts
For Alberta, absolutely, it will be much worse than those two. At the current prices of Western Canadian Select Oil, there's no future for the oil industry in AB. Who knows if the price will stay there. I would guess that Russia might start wavering a bit on their price war as the virus appears to be starting to hit them hard.
I really feel for everyone in Alberta as it seems to have been a tough slog, unable to get any momentum out of the oil funk the last few years and now this price war.
 

·
Registered
Joined
·
1,542 Posts
Discussion Starter #207
April 2020 Update

The wild times continue...

Obviously no travel is likely for the end of this year. I booked some campsites for July in the hopes things will be open by then. If not, it's all refundable. We have a credit with Swoop airlines for a cancelled flight.

Things are not great at work, obviously with the price of oil. Sales are down something like 50% worldwide. I will say we were very lucky to get our chapter 11 filing done and complete earlier this year. No way it would have happened now. There's been layoffs, as recently as this week. I made it through this round, but I am not confident I'll make it through next round. I earlier said the odds of getting laid off in the next 12 months to be 30-40%. I would now say there's a 10% or less chance of me finishing the year employed with this company. We're on double furlough now (essentially a 0.8 FTE position), and they're not matching our RRSP anymore. I started the process to transfer out as much as I could from our work RRSP to my personal RRSP. There's no fee and it's been done rather fast. I think $152K was the most I could transfer out.

We applied for a HELOC on the house. Better to apply for one now then after I lose my job. I intend to use most of it to invest in beaten down stocks. Money should be available next week. As part of the process, they had to appraise the house. With the market and being in AB, they were extremely conservative with the value. As such, I've dropped the value of our house by $50K to reflect reality.

Got my wife's updated pension amount, and understandably it's gone up due to very low rates. That has offset the house value drop. Given the risk of me being laid off, we'll probably bump her up to full time next Sept when school gets back in (she was half time this year).

We were going to pay someone to develop our basement this year, but that's not going to happen. Instead, the money was put in to a TFSA and stocks were bought. I've started on one of the rooms in the basement and might do another before the year is out. Still have our tenant, not able to raise rent anymore this year. The risk of her not paying rent is quite low since she's a student and her parents are quite well off I think. Her lease is up end of May, so we'll see what happens.

With the RRSP transfer, we'll have about 160K of cash to deploy in the markets over the next month. Plus another 75K from the HELOC. And up to 50K additional if we really want to go all in.

Assets:

House - $1,080,000
Work DC Pension (mine) - $216,088
DB Pension (wife) - $279,800
RRSPs - $66,695
Non-Reg - $0
TFSA: $33,072
Corporate Account/Value/Inventory: $13,850
House Maintenance Account: $5,350
Cash - $2,922
Miscellaneous assets - $16,000

Total Assets $1,713,777

Liabilities:


Mortgage - $673,305
Credit cards - $3,511 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $0
HELOC - $0

Total Liabilities $676,816

Net Worth: $1,036,961 (-$8K from last update)
 

·
Registered
Joined
·
800 Posts
What type of stocks/ETFs do you purchase?

What is the likelihood of getting a job within six months if you lose your job this year? Shouldn't you be reducing your debt instead of taking more debts now?
 

·
Registered
Joined
·
1,542 Posts
Discussion Starter #209
What type of stocks/ETFs do you purchase?

What is the likelihood of getting a job within six months if you lose your job this year? Shouldn't you be reducing your debt instead of taking more debts now?
Have bought MGM, VIAC, TECK.B, RDS.B, CAE, BMO, DIS and a few others. The bulk of my work RRSP transfer will go in to VBAL or XBAL.

The likelihood of me getting a job at similar pay within 6 months is 0%. Likelihood of me getting any job, regardless of pay within 6 months is probably 60%. But I wouldn't be scrambling for any job. With my wife's income, EI, rental income, web business income, and child benefit payments, our family income would probably be close to 140K+. I'm confident I could start consulting/contracting in my field for international clients to make some money. There's a dozen other things I have in mind to start earning income and none of them involve me working for someone else again.

With some lifestyle cuts and cost savings, a 12-16 month severance package, and our incomes that are still remaining, I reckon we could last 4-5 years before I actually needed to get some work.

I've been hoping for a crash similar to 2008 to happen again as those that went against the grain and borrowed to invest then are sitting very pretty right now.
 

·
Registered
Joined
·
1,542 Posts
Discussion Starter #210
May 2020 Update

Still more layoffs at work. There's a little more clarity on the new structure. I can see a path forward now. If I'm still working there by the end of summer, then I think my employment outlook starts to look substantially better. Working from home is not very efficient, though we have a day every week of furlough, so I've been taking it mostly out of guilt to make up for my lack of efficiency. Nice to be around the house and the kids though. Talking with my colleagues that got laid off, I have a pretty good idea now of what a severance package would look like in my case if it were to happen. 160-190K, plus 2 months of paid benefits is what I have planned for.

Managed to transfer over my portion of my work RRSP to a self directed account. They would not let me transfer over the employer contributed amount. Most of the transfer went in to XBAL. The rest in to stocks. As I indicated previously, we got a HELOC on the house set up and I drew it down for some leveraged investing. We have about 15K of cash yet to invest, and if things get really crazy, there's another 50-100K of margin/credit available.

Our garage suite tenant is renewing for another year. Same rent as we're not allowed to increase it right now, but dropping the rent was never brought up at all, as I was expecting.

Assets:

House - $1,080,000
Work DC Pension (mine) - $98,610
DB Pension (wife) - $281,300
RRSPs - $195,588
Non-Reg - $32,286
TFSA: $70,970
Corporate Account/Value/Inventory: $14,000
House Maintenance Account: $5,350
Cash - $3,022
Miscellaneous assets - $16,000

Total Assets $1,797,126

Liabilities:


Mortgage - $670,431
Credit cards - $5,629 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $0
HELOC - $70,526

Total Liabilities $746,586

Net Worth: $1,050,540 (+$14K from last update)
 

·
Registered
Joined
·
61 Posts
a severance package is really attractive, wonder if you can share how many years service you are with your employer
 

·
Registered
Joined
·
1,542 Posts
Discussion Starter #213
June 2020 Update

Wow, things have been crazy in the markets. I started my pandemic portfolio about 2 months ago, and early last week the whole portfolio was up 35%. Many stocks were within pennies of my preselected sell prices (Ford, MGM, CAE, DIS). Now a week later, things have dropped considerably though that portfolio is still up 16%. This NW update would have been 50K higher if I had done it a week ago. That's volatility though! I'm not bothered. Even after the drop last week, this is a new all time high for us.

Still employed. I can see it staying that way until Sept/Oct. Our CEO abruptly left this week, which we think was due to a disagreement with the new board (new board after exiting bankruptcy). The thought is the CEO was planning for long term growth, looking at potential acquisitions when things were down. And the board (old debt holders) just want their money back, and quick. Our double furlough ends this week, but I think they keep single furlough (10% pay reduction) in force for a while longer. Now in an ideal situation, any layoff would occur in the first two months of the year as there wouldn't be such a tax hit. But as we get longer in to this year, the risk increases that there would be a massive tax hit on the severance given that my income would be close to 320K for the year (almost full year of regular income plus just over a years severance, all paid out in current tax year). If that were to happen, I would have to move as much in to RRSPs and then withdraw as needed the next year when income was lower. I think we have about 140K of RRSP contribution room so that is good insurance if we need it.

My little web store continues to grow. I expect there will be a couple months this year where the monthly net income from that will exceed my work salary. I can see it growing to the point where it brings in 50-80K profit per year. I've started the process for another web store which would go live around the end of this month. Some friends and I have been looking in to the possibility of setting up local, medical grade PPE manufacturing, it's pretty capital intensive and obviously we'd only go forward if it looked promising at pre-pandemic pricing and volumes. The good thing is that polypropylene (one of the main materials for most PPE) is being or soon to be manufactured less than an hour from here, so a '100% Alberta made' story is possible.

Otherwise, not much to report. Wife took a new job at a different school. It's now a 7min walk to school rather than a 15min drive.

Assets:

House - $1,080,000
Work DC Pension (mine) - $102,497
DB Pension (wife) - $287,000
RRSPs - $216,420
Non-Reg - $33,364
TFSA: $76,575
Corporate Account/Value/Inventory: $21,250
House Maintenance Account: $5,475
Cash - $1,691
Miscellaneous assets - $16,000

Total Assets $1,840,272

Liabilities:


Mortgage - $665,587
Credit cards - $7,610 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $0
HELOC - $75,000

Total Liabilities $748,197

Net Worth: $1,092,075 (+$42K from last update)
 

·
Registered
Joined
·
34 Posts
Congrats on the success of your web store; what has made it successful so far and how did you know it would be a successful niche market?
 

·
Registered
Joined
·
1,542 Posts
Discussion Starter #215
Congrats on the success of your web store; what has made it successful so far and how did you know it would be a successful niche market?
Well, it's a pretty small niche. So it's easy to target customers with ads that are only looking for that thing, rather than something nebulous like 'women's clothes' or 'home furniture'. For the most part, it's not a repeat business type of thing (though I do have some builders and distributors that have bought repeatedly). So in that respect, it's not hard to get to the first page of google with a bit of ad spend. $300/mo gets me lots of business, but $500 a month doesn't get that much more so I'm probably reaching all the clients I can. I only advertise in Canada, so I'm sure if I added USA to the mix, my ad spend could go higher. My products are cheaper than the competition (other dedicated web stores that sell only that product). But more expensive than getting something similar at Amazon. Mind you, Amazon doesn't sell the sizes I sell so that works out well. I'll be adding a couple new versions of the product soon, so we'll see if that leads to more sales from the same web visitors as perhaps they didn't find what they wanted earlier. My checkout conversion rate, abandoned cart conversion, all the metrics are really quite good and I think that speaks to the fact that it's hyperfocused on one product only.
 
201 - 215 of 215 Posts
Top