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Discussion Starter · #101 ·
Thanks Scorpian, I'll be looking into those for sure.

March Update:

Yesterday, I locked in my mortgage for 3 years on the house at 1.75%. I had a variable mortgage, but given my bank's somewhat high prime mortgage rate, it wasn't on favourable enough terms to stick with the variable mortgage. I had Prime - 0.5%, which worked out to 2.1%, but with prime rate likely to go up in the near future, I am happy with 1.75% for 3 years. That will allow me to get roughly another $28 000 paid off my mortgage principle over the next 3 years (if I only make the minimum payments) at quite a low interest rate, which is really advantageous, being still fairly early in my 25-year ammortization. I got another layoff notice at the beginning of the month, but it has since been rescinded, and I am safe from layoff for at least another 3 months. Hopefully in that time, the vaccine distribution ramps up, and the flying will start getting busier. I've been spending a lot of time reading this month. I read the book "rich dad, poor dad". It was okay, but I found it very repetitive. I'm now reading "Making Money in Real Estate 3rd edition", which is extremely well written, has a lot of very helpful information, and focuses on Canada. My house seems to have gone up in value quite substantially, looking at latest sales in my neighbourhood. It's good to see, but I will still continue to value my house at 270k, for the purpose of this exercise. It would realistically sell for about 315k in the current market, but then there are big expenses associated with trading real estate. Also, my work savings plan is starting back up in April, matching 10% of my gross income, and increasing to 15% match in December. I plan to put the majority of that money in a TFSA to boost my liquidity, as the vast majority of my assets are real estate and RRSP's. I didn't make any big debt repayments in the last month, because I had to contribute a good chunk of money to RRSP's in order to avoid an income tax bill. I will also have to pay my property taxes in June, so I likely won't be able to make much more than the minimum payments on my debt until July. Thankfully, I've paid back a lot of my debt, and my monthly interest is now way lower than it was a couple of years ago.

Assets:
House - $270k
Condo - $155k
LRRSP - $18 728
RRSP - $12 337
FRESP - $1448
Wife RRSP - $3070
Chequing - $1350
Savings - $262

Total Assets: $462 195

Liabilities:
House Mortgage - $217 505
Condo Mortgage - $124 520
Student LOC - $6647
SUV Loan - $14 726
BMO LOC - $4420
Wife Student Loan - $3580
Credit Card - $1737

Total Liabilities: $373 135

Net Worth: $89 060
 

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Discussion Starter · #102 ·
I'm thinking about setting up my mortgage to perform the Smith manouevre. Anyone think this is a bad idea? Seems like a winning strategy from what I can tell.
 

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Discussion Starter · #103 · (Edited)
April Update:

Didn’t go ahead with the Smith manoeuvre, because given the low interest rate I currently have on my mortgage, it wouldn’t be very advantageous.
Assets:
House - $270k
Condo - $155k
LRRSP-$19 511
RRSP - $12 650
FRESP - $1749
Wife RRSP - $3758
Chequing - $1697
Savings - $762

Total Assets: $465 127

Liabilities:
House Mortgage - $216 763
Condo Mortgage - $124 064
Student LOC - $6599
SUV Loan - $14 271
BMO LOC - $4340
Wife Student Loan - $3480
Credit Card - 1759
Total Liabilities: $371 276

Net Worth: $93 851
 

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Discussion Starter · #104 ·
May Update:

Assets:
House - $270k
Condo - $155k
LRRSP - $18 493
RRSP - $12 329
FRESP - $1891
Wife RRSP - $3988
Chequing - $1527
Savings - $1137
Work Savings Plan - $700

Total Assets: $465 065

Liabilities:
House Mortgage - $215 980
Condo Mortgage - $123 596
Student LOC - $6550
SUV Loan - $13 815
BMO LOC - $3930
Wife Student Loan - $3380
Credit Card - $2440
Total Liabilities: $369 691

Net Worth: $95 374
 

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Discussion Starter · #105 ·
Can someone talk some sense into me? I've been paying off $1000/month+ towards debt for a long time now, and now I want this "gadget" that's not really necessary, but would be nice to have for a hobby of mine. It's $450, and I'm having difficulty stomaching parting with $450 for something not totally essential. Should I just say screw it and treat myself this month?
 

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It's such a balancing act. Money should be enjoyed but preferably not at the expense of putting your financial security/goals at risk. However, even if it's not essential, I think there's an argument to be made for a purchase if it's going to be used/enjoyed regularly. But if there's a chance the gadget ends up sitting there gathering dust, you might want to reconsider (at the risk of being on the receiving end of repetive spousal torment any time that gadget is seen and reminded about making a wasteful purchase... personal experience! :D )
 

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Discussion Starter · #107 ·
Lol, exactly. That's kind of how I feel about it. This particular item would be used fairly regularly. (Once a month or so, and for one of my main hobbies). It's an electric, all in one, automated beer brewing device called a "brewzilla". It would just make home brewing so much more pleasant.
 

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It depends on your mindset. I promised myself in 2013 that I would be delaying gratification until I reach 40 and hopefully become a millionaire by then. I don't buy stuff unless I really need it and buy most of the stuff on sale.

I read somewhere that Warren Buffett usually calculates the future value with 30 years before buying anything. $450 @ 6% with 30 years to grow would be $2,600. Do you want to spend $2,600 for the brewzilla?
 

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Discussion Starter · #109 ·
It depends on your mindset. I promised myself in 2013 that I would be delaying gratification until I reach 40 and hopefully become a millionaire by then. I don't buy stuff unless I really need it and buy most of the stuff on sale.

I read somewhere that Warren Buffett usually calculates the future value with 30 years before buying anything. $450 @ 6% with 30 years to grow would be $2,600. Do you want to spend $2,600 for the brewzilla?
That's a good way to look at it. The opportunity cost over time is much more than the sticker price of $450. I also have been delaying gratification for the last couple of years while paying off debt, and I've seen a few things happen in that time that has not necessarily made me change how frugal I am, but has just given me a little more perspective. One of those things was having a friend of mine pass away in his 30's. You never know when your time is up. Being able to retire as early as possible is extremely important that so you can enjoy as many years with financial freedom as possible, but I also feel that you shouldn't deprive yourself of too much.
 

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Being able to retire as early as possible is extremely important that so you can enjoy as many years with financial freedom as possible, but I also feel that you shouldn't deprive yourself of too much.
Absolutely don't be frivolous, but you only live once. You'll never be 35 again.
A guy in university was always talking about pleasure equity. A non-cash equity that is gained and accumulated by having something you cherish. For example, buying that car 2 yrs earlier than you planned. That's 2 yrs of pleasure equity. Not worth much at the bank of course. I've had several friends in the early 40's be hobbled by chronic injuries, require surgery for slipped discs or whatever and have never been the same. It's a balancing act.
 

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Discussion Starter · #111 ·
Thanks everyone, I’ll continue to think about it. I have a few things gathering dust at the house right now, which I think I will try to sell. Also, I have been guaranteed not to be laid off again until at least October 31st, my pay has increased a bit, and work is getting busier. I think by the end of October, I will be back up to my pre-pandemic pay. So I’m also starting to feel a little more financially secure now that the end of the pandemic is almost here.
 

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I have a few things gathering dust at the house right now, which I think I will try to sell.
When my inlaws downsized from a house to a condo, my SIL was in charge of selling all the stuff that they wouldn't need at the condo. And I can't believe she was able to sell almost everything and what people were willing to pay for stuff. I'm so out of the loop as I thought Craigslist was still THE place to sell stuff but apparently Facebook Marketplace is the new IT tool to sell stuff.
 

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Discussion Starter · #113 ·
Okay, I caved and got the Brewzilla. I've been selling odds and ends this week on kijiji, and I also plan to pick up some OT this month to make up for it. I also have a massive update on our goals. Our plan is to move to Southern Ontario to be closer to family, which will be good for our Daughter, and any other kids we have in the future. I am able to live basically anywhere in the country with my job, and actually, being closer to Toronto will make my life much easier. We're thinking of moving about an hour to 1.5 hours North/Northwest of Toronto, maybe Georgian bay area. I grew up on the water, and would like my kids to be able to have a similar experience growing up. We would like to be less than two hours from Pearson. My Wife and I have already sat down, and written out our goals, as well as rough timeframes. I absolutely do not want to pay the current prices that we're currently seeing for housing in Ontario, and if prices stay the way they are, or continue to increase over the next year our two, we will most likely stay put. I'm not willing to delay my retirement by 10 or more years to achieve this goal. So here are our rough goals:
1. Pay off all debt, except for mortgages. Will be done by March, 2023 at the very latest. Most likely much sooner. This is based on my current COVID reduced pay (currently earning about 40% less than pre-covid. Expecting to be back to pre-covid pay by the Fall). Assuming I get back to pre-covid pay in the Fall, I expect all of our non-mortgage debt to be gone within 6 months to a year.
2. Save $36 000 in TFSA as an emergency fund.
3. 75% of what was previously allocated to debt repayment will go to filling up TFSA, and then to non-registered accounts. Money saved in my employment savings plan, and my Wife's employment savings plan will be put in RRSP.
4. Once we have $50 000 cash in addition to the $36 000 emergency fund, we can consider buying a new house. This will be 2024 at the earliest, our condo mortgage will be paid down to $106 000 by June, 2024, and the house mortgage will be down to $187 200. If we sold the house for $270 000, and the condo for $155 000, that would leave us with $131 800. Houses like ours are currently selling for well over $300 000, but I'm just trying to be conservative, and trying to account for closing expenses, etc. Let's call it $100 000 in the bank after selling both properties, in addition to the $50 000 cash savings, so we would have $150 000 to put towards a down payment. I don't really want to ever pay more than $500k for a house, and I also don't want to settle for a house for $500k that we're not absolutely in love with. So we'll see what the market does.

You're probably wondering where all of this money will come from in a relatively short period of time. Currently, my employer is matching 10% of my gross pay into the savings plan, and will increase to 15% match in December. So 30% of my gross pay will be going straight to savings. I can choose whether this money goes to TFSA, non-registered or RRSP accounts, or any combination of the three, and I can transfer the money out into my personal accounts outside the employer savings plan once per year for non registered, and twice a year for registered. So especially once I get back to my pre-covid gross pay, I should be able to stash money away fairly rapidly.

Any tips are more than welcome!
 

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I wouldn't put emergency fund in TFSA as TFSA should be used for higher growth ROR. I made the same mistake from 2009 to 2012.
 

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Discussion Starter · #115 ·
I wouldn't put emergency fund in TFSA as TFSA should be used for higher growth ROR. I made the same mistake from 2009 to 2012.
Ah yes, good point, thanks! I suppose an emergency fund should be invested more conservatively in a non-registered account, since I may need to use it on short notice.
 

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Discussion Starter · #116 ·
June Update:

We broke $100k net worth! I realize this is peanuts compared to what's required for financial freedom, but I feel like this was a big number to get past. Things are picking up at work finally, and my Wife got a 10% raise to take effect in September, which will be a big help. I also got about a 15% property tax rebate this month (Just over $650), which I put directly onto my LOC. I also sold a bunch of stuff that was sitting around in the basement to help recoup some of the money I spent on hobby stuff this month.

Assets:
House - $270k
Condo - $155k
LRRSP - $19 642
RRSP - $13 074
FRESP - $2147
Wife RRSP - $4360
Chequing - $1194
Savings - $1137
Work Savings Plan - $1488

Total Assets: $468 042

Liabilities:
House Mortgage - $215 207
Condo Mortgage - $123 137
Student LOC - $6502
SUV Loan - $13 130
BMO LOC - $3200
Wife Student Loan - $3280
Credit Card - $2275

Total Liabilities: $366 731

Net Worth: $101 311
 

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Discussion Starter · #117 ·
Ah yes, good point, thanks! I suppose an emergency fund should be invested more conservatively in a non-registered account, since I may need to use it on short notice.
Speaking of emergency fund. Glad I had that $1300 set aside as my emergency fund. A couple days ago, my Wife went to close the garage door, it jammed, buckled one of the tracks, and the door came crashing down. Thankfully no one was hurt, and neither of our vehicles were damaged. $724 to fix the door though. Ouch.
 

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Discussion Starter · #118 ·
July Update:

We spent about $1000 this month travelling to visit my parents and in-laws over about a week and a half who we haven't been able to see for about a year. It obviously impacted our finances, but we decided it was worth it. We have a property tax bill coming of $4900 which is due the end of September. I've been doing overtime here and there, and plan to do enough overtime by the end of September to cover this. After that tax bill is paid, I am going to return to rapidly paying off debt. We also managed to pull our daughter out of day care for July and August, since my Wife is a teacher, and they gave the spot to another family who only needs it for the summer. We still get to keep the spot secured at the daycare when my Wife goes back to work, and it saves us about $1200 over the summer.

Assets:

House - $270k
Condo - $155k
LRRSP - $20 649
RRSP - $12 927
FRESP - $2437
Wife RRSP - $4900
Chequing - $2193
Savings - $0
Work Savings Plan - $2359

Total Assets: $470 465

Liabilities:
House Mortgage - $214 422
Condo Mortgage - $122 667
Student LOC - $6453
SUV Loan - $12 673
BMO LOC - $2750
Wife Student Loan - $3180
Credit Card - $2643

Total Liabilities: $364 788

Net Worth: $105 677
 

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Discussion Starter · #120 ·
Your daycare only costs $600/month?? Sheesh I pay $1250!
Hey Peter, sorry for the delay. Yep, $600/month in Manitoba, and $300 once she is potty trained. We do pay higher income taxes in Manitoba though than pretty well every other province, so I guess these things balance out a bit.
 
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