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Discussion Starter #1
I have recently had a setback in my finances and I am very upset about it.

I have been in business for almost three years now, I rent apartments/houses on behalf of landlords and I also do property management.

The volume of people getting me to rent apartments is really low right now, I am surviving on my property management which does not pay all that much.

So my hubby is after me to cash some investments in to pay stuff like bills which are piling up. I feel like I'm going backwards and really depressed about it. I have worked really hard to put my small investments away. Like $50 and $100 at a time for about the last three years.

We live a very frugal life style. Last year after expenses my income was only about $15000. Granted I am self employed so I get to claim expenses first. There are the three of us living on that. I have no rent or mortgage to pay. I also usually contribute $327 per month to my son's RESP. He is fully funded pretty much.... i have cancelled this to increase our cash flow a little.

Anyways after all this scraping and saving and coupon clipping I am having to cash in some RRSP's. Really not just so much a question of the money but rather the emotional feeling of losing ground.

Anyone else have some stories about this? My hubby is getting testy because I am taking this really personally he says "this is a bad recession due to your planning we have something to fall back on" but I am not gruntled about it.
 

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I'm sorry to hear about your difficulties. How are you finding landlords to work for? What about looking for landlords who run 12-36 unit apartments in regular RE meetings?
 

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Discussion Starter #3
That's the hard part - getting landlords. In June the phone was ringing, now just not so much.

I have advertising out in a few spots but the best place is craigslist believe it or not.

I mostly work for people who only have one or two units. I wish to work for people who have small buildings.

I like bringing buildings around and turning them from places you don't want your dog to live in with lots of vacancy to places that are decent and full.

I'm also good at finding good investments. Both the last two items are hard for me to monetize.

I'm sure there's a lesson around here somewhere:p
 

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Your situation is a sterling example of why advisors suggest having an emergency fund. If you don't have one, perhaps you can consider a withdraw from your RRSP as a withdraw from an emergency fund. This may make it easier to swallow. You can replenish your RRSP once the situation improves. Or a better suggestion would be to set aside some money in the future in a high liquidity savings account like a TFSA in case an emergency comes up in the future again, instead of having everything in RRSPs.

Hope this helps.
 

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I'm sorry things aren't going well for you financially.

I think you are shooting the messenger a bit (ie your hubby). If you need money for bills then it has to come from somewhere - either you borrow (a good short term solution) or cash in something (ie rrsps, sell material items etc).

If your income is really low then it's probably not the worst time to cash in rrsps since the tax implications will be minimal.

I agree with DomanB that an emergency fund is extra important for someone with variable income. However that isn't going to help you now. You could argue that you have "over" contributed to the RRSP and now you have to remove the excess. It's not a great situation but sometimes reality is like that.

Other possibilites are to sell possessions if you have any that might get some money. You don't sound like you have many expenses you can cut.

Longer term I think you'll have to take a good look at your business and determine if it is working out for you. You mentioned clearing $15k last year - was this part time? If it was working full time then that's not a good income. If it was part-time then you might have to consider getting a second job/business (how about becoming a real estate agent?).

Does your husband work? In the original post it said that 3 of you were living off the $15k. Can he work? How old is your son? Can he get a part-time job?
 

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Its hard to answer your question properly because you've left your husband's financial situation out of the equation. If you are both struggling then, as Four Pillars said you may have to cash in some investments and forgo RESP contributions for a while. However, if your husband is making a good salary and has his own investments, and is asking you to, say, cash in the RESP, then that may be unfair.
 

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Discussion Starter #7
Hubby takes care of our son while I am working. My son is not quite 2. My hubby can't get a job here in Canada until we get final approval from Immigration. He is American. He is also not the type to get a cash job. Also our son is a full time job trust me.

You are right I should not have put the money in RRSP's. TFSA is a much better thing in case i have to take it out. Plus because of my low income i just deferred claiming it on my income tax anyways. I was only starting investing back then..... my financial advisor hahaha told me to put it there. Oh and the investment is a money losing machine.

Anyways since I posted this, I have done rattled a few chains and some dough fell down. I may yet save the RRSP. Thank god my overhead is so low. Situations like these are exactly why I am so maniacal about keeping it that way. In any case I can't get a hold of my financial advisor to take it out.

This is just another lull and that's part of being in business. If it was smooth sailing everyone would be in business. Dealing with stress and strain is the hardest part of it.
 

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Some help should be available after you file your income tax. You should be elibible for a relatively large child tax credit + child tax supplement as well as the GST credit.
 

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You don't need to get so upset about the RRSP. Withdrawing funds from there is no sin and because you are earning essentially nothing you won't have to pay barely any tax on it. Sure you will lose the contribution room for the future but there is always the TFSA to make up for that and future RRSP room that you will earn.

You really aren't taking much of a penalty here. Sure you will have money withheld from you because of how it works but you will get all that back on your tax return ... well at least most of it. You can use your unclaimed contributions to get the rest back if you want to.

Going forward you should just use the TFSA for the sole reason that you don't lose any contribution room if you have to withdraw. Save your RRSP for when you income is really high (you can dream) so that instead of not claiming contributions (that was a smart idea even though you haven't been able to capitalize on it yet) ... you can claim them immediately.

I don't think your financial adviser gave you bad advice. The TFSA surely wasn't around when they gave you the advice and an RRSP is a fine emergency fund when you lose your job because your income goes to 0 allowing you to withdraw money tax free or at a very low tax. The only problem here is that your investments have lost money ... but that is a problem with investing in equities ... not RRSPs in general.

Good luck to you ... I hope you are able to pull out of this down situation soon!
 
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