So just a summary from the last post...it's a girl! My daughter Ava was born on March 15th, 2011 and that has been a wonderful blessing to our family. She has received her SIN number so we are heading to the bank on Friday to begin her RESP for schooling!
Financially, I took out a $5100 RRSP loan and ended up getting back over $3000 from the government, so all of that $3000 will go towards paying back loans (both the RRSP loan and my student loans). My priority for paying back loans will be
1) smallest student loan (done)
2) RRSP loan (I have about $3200 left)
3) last student loan (I have about $9800 left)
4) house mortgage (I have about $120,000 left)
We'll see if I do another RRSP loan for next year...chances are that I will. The net worth increase is tremendous and the regular payments aren't a strain on me financially.
As far as investing, once the TSX gets to 15000 I will take 20% of my Dividend holdings and turn them into bonds. After that, it will be once the TSX gets to 16500. All of my contributions are going into the Dividend Fund at this time.
Sunday, April 10, 2011
Monday, February 21, 2011
RRSP Loan
So this weekend I took out a loan from the bank for RRSPs. Generally I think it makes more sense to save ahead (which I do anyway), but I had some extra cash floating around (paycheque to paycheque) and some RRSP contribution room so I decided to take a loan. I ended up borrowing a little over $5100 (which turns into me paying back $200 per paycheque). The total cost of borrowing is about $70. Considering that I'll get at least 30% of that back through my income tax, it sounds like a pretty good investment to me! The interest rate they gave me as well is below prime, so it will be my lowest priority to pay off.
When I get my income tax back, I will split the return three ways: 1/3 going towards an RRSP re-contribution (for next year), 1/3 going towards my mortgage, and 1/3 going to a student loan. Once my student loan is paid off, then I will concentrate my energy towards the RRSP loan, and then finally to my bigger students loan. All in all, this will really help our next worth and things are moving in a perfect direction before the baby is born!
When I get my income tax back, I will split the return three ways: 1/3 going towards an RRSP re-contribution (for next year), 1/3 going towards my mortgage, and 1/3 going to a student loan. Once my student loan is paid off, then I will concentrate my energy towards the RRSP loan, and then finally to my bigger students loan. All in all, this will really help our next worth and things are moving in a perfect direction before the baby is born!
Wednesday, February 16, 2011
Rebalancing
The TSX hit over 14000 today so I rebalanced my portfolio, taking 20% of my TSX fund and switching it over to bonds. 100% of my contributions will be in the TSX fund and I will rebalance 20% again when the TSX hits 15000.
Saturday, February 12, 2011
First Update In A While...
With a new baby on the way in a few weeks, I should maybe give an update on what has happened to us financially in the past six months or so, and give a few of my financial goals that I have for myself.
Goal #1: Put $25 per paycheque towards baby's RESP
This is a no-brainer. Right now I contribute $225 towards my TFSA each paycheque, so I will just chop $25 off this and put it into the RESP. Until I am financially comfortably able to retire (whether I do or not), it will stay at $25. Most financial books say for parents to take care of themselves before they take care of their kids and that's what I will do for now.
Goal #2: Every 1000 point gain on the TSX means 20% contribution into Bond Index
I need to get this into writing so that I have it. When the TSX gets to 14000, 20% of my TSX money will go into bonds (whatever the current value). When the TSX gets to 15000, another 20% of the TSX money will get transferred over. Let's say I have $10000 in TSX and $5000 in bonds, it will change to $8000 in TSX (20% reduction) and $7000 in bonds. All of my regular contributions will go to the TSX.
Goal #3: Increase my passive income
I re-read "Rich Dad, Poor Dad" over Christmas (come on...I'm about to become a father) and one of his statements was that you are wealthy when your passive income meets your expenses in a month (or a year or whatever). That is, if you have $2000 per month in expenses (food, mortgage, hydro, whatever), if you have $2000 per month coming in and you don't have to get off the couch, you are wealthy. This is my goal. So the question is how to get passive income. One of my friends has solar panels installed, and claims that a $30000 investment will net him $300 per month over the next 20 years. Another option for me is to take an RRSP loan out and then get a huge chunk of money back, increasing my net worth a lot. The problem is that there would be no passive income. The third option would be to start the "Smith Manouevre", which is to take a loan out for investments and then get the tax benefit for the interest paid. The passive income is your tax benefit, but I can't make it work in my head because the interest paid each month would obviously be higher than your tax benefit. The hope/dream would be that your investments would increase faster than the loan that you take out. I have some thinking to do about that.
Goal #4 - Take a vacation to Hawaii
Although she won't say it, I think that frugala was a bit disappointed that we didn't go someplace warm for our honeymoon (although the Ice Hotel in Quebec City was fabulous!). So we decided that when our collective net worth is $100,000 we will go on a holiday to Hawaii. She has family there so we may be able to stay more frugally than most people, but it is an expense for sure.
Goal #5 - Buy a new house
We will be moving in the near future (probably the next year or so), so I should probably be starting to save some money towards a bigger down payment. The current mortgage is dropping quite nicely for me, but probably the mortgage will be at least $100,000 more than it is now.
What I Have Accomplished
In the last bit, I have a Visa bill of $0, increased my investments and paid off one of my student loans (there is still one left). My cash flow is rising, which is why I am at decision time as far as what to do. Obviously with a baby there will be changes in all aspects of my life and maybe things will be tighter, but I set these goals for myself in September when I took the extra tutoring jobs. A big thanks to frugala who took over one of my loans (in exchange for me paying for most of the monthly bills and all the mortgage payments) that allowed me to get into the black much more easily.
Goal #1: Put $25 per paycheque towards baby's RESP
This is a no-brainer. Right now I contribute $225 towards my TFSA each paycheque, so I will just chop $25 off this and put it into the RESP. Until I am financially comfortably able to retire (whether I do or not), it will stay at $25. Most financial books say for parents to take care of themselves before they take care of their kids and that's what I will do for now.
Goal #2: Every 1000 point gain on the TSX means 20% contribution into Bond Index
I need to get this into writing so that I have it. When the TSX gets to 14000, 20% of my TSX money will go into bonds (whatever the current value). When the TSX gets to 15000, another 20% of the TSX money will get transferred over. Let's say I have $10000 in TSX and $5000 in bonds, it will change to $8000 in TSX (20% reduction) and $7000 in bonds. All of my regular contributions will go to the TSX.
Goal #3: Increase my passive income
I re-read "Rich Dad, Poor Dad" over Christmas (come on...I'm about to become a father) and one of his statements was that you are wealthy when your passive income meets your expenses in a month (or a year or whatever). That is, if you have $2000 per month in expenses (food, mortgage, hydro, whatever), if you have $2000 per month coming in and you don't have to get off the couch, you are wealthy. This is my goal. So the question is how to get passive income. One of my friends has solar panels installed, and claims that a $30000 investment will net him $300 per month over the next 20 years. Another option for me is to take an RRSP loan out and then get a huge chunk of money back, increasing my net worth a lot. The problem is that there would be no passive income. The third option would be to start the "Smith Manouevre", which is to take a loan out for investments and then get the tax benefit for the interest paid. The passive income is your tax benefit, but I can't make it work in my head because the interest paid each month would obviously be higher than your tax benefit. The hope/dream would be that your investments would increase faster than the loan that you take out. I have some thinking to do about that.
Goal #4 - Take a vacation to Hawaii
Although she won't say it, I think that frugala was a bit disappointed that we didn't go someplace warm for our honeymoon (although the Ice Hotel in Quebec City was fabulous!). So we decided that when our collective net worth is $100,000 we will go on a holiday to Hawaii. She has family there so we may be able to stay more frugally than most people, but it is an expense for sure.
Goal #5 - Buy a new house
We will be moving in the near future (probably the next year or so), so I should probably be starting to save some money towards a bigger down payment. The current mortgage is dropping quite nicely for me, but probably the mortgage will be at least $100,000 more than it is now.
What I Have Accomplished
In the last bit, I have a Visa bill of $0, increased my investments and paid off one of my student loans (there is still one left). My cash flow is rising, which is why I am at decision time as far as what to do. Obviously with a baby there will be changes in all aspects of my life and maybe things will be tighter, but I set these goals for myself in September when I took the extra tutoring jobs. A big thanks to frugala who took over one of my loans (in exchange for me paying for most of the monthly bills and all the mortgage payments) that allowed me to get into the black much more easily.
Sunday, November 7, 2010
Financial Update
It has been a while, so here is the most up to date information on what I have done (and what I plan to do) before the baby comes:
- frugala paid off a loan for me, so rather than charging her the equivalent of rent, she keeps her entire paycheque and I pay for all tbe mortgage and bills (minus half groceries, car stuff and dog stuff)
- I have received two raises since September: for the first one I increased my mortgage payment and increased my RRSP. For the second one I increased my RRSP and my TFSA (the TFSA increase will turn into the baby's university savings)
- I save $300 every two weeks now: $225 goes into my TFSA and $75 goes into my RRSP. From the $225, for every $1100 I accumulate, I take $1000 and pay something off (be it a loan, or a credit card, or a mortage or hopefully one day into the RRSP). The idea is to minimize the loans and to slowly build up an emergency fund (from the extra $100 that get put into there)
- I have started two part time jobs, where to money gets funnelled into my TFSA (for the purposes mentioned above). I work for Homework Help, where I get paid to tutor math in the evenings. I also tutor 3-4 students each week (it was supposed to be 4 but the last one has cancelled the last three weeks, so I am counting on three now). The idea of these extra jobs is to use the money for savings and/or paying things off, not for the regular expenses for week to week. This is important, because when second semester starts (February), we are getting close to baby time and my energy will (properly) go to my family rather than gaining extra cash. The plan is to have my credit cards at zero and another student loan paid off by the time the baby is born.
- When the TSX hit around 12500, I dumped half of my Canadian Index fund into a bond index, with all of my current contributions going into the Canadian Index fund. The TSX has continued to rise, but I have taken my profits from it. Long term I think this is going to work. I will only re-balance next when the TSX hits 13500.
- Finally I have been thinking about using the Smith Manoeuvre (this will be once my student loans get paid off). The idea is that you borrow for investment purposes, and then the loan is tax deductible, and with the tax benefits you put that towards your non-deductible loans. It makes a lot of sense as you gain equity in your house. The plan for me would be to pay minimal on your loans, and then increase the loan for the amount of equity that you have on your house. Theoretically, when you are done paying your mortgage, you can either pay off your Smith loan, or continue to keep it and keep the deductions and increase your investments with the extra money. There will be considerable more planning as we get closer, but it makes a lot of sense. There will be little change in the daily handling of my finances, but there will be a much larger tax deduction and more investments in the long haul.
Thanks for reading!
I have been updating our net worth on spreadsheets, and will update the post either later today or this week.
- frugala paid off a loan for me, so rather than charging her the equivalent of rent, she keeps her entire paycheque and I pay for all tbe mortgage and bills (minus half groceries, car stuff and dog stuff)
- I have received two raises since September: for the first one I increased my mortgage payment and increased my RRSP. For the second one I increased my RRSP and my TFSA (the TFSA increase will turn into the baby's university savings)
- I save $300 every two weeks now: $225 goes into my TFSA and $75 goes into my RRSP. From the $225, for every $1100 I accumulate, I take $1000 and pay something off (be it a loan, or a credit card, or a mortage or hopefully one day into the RRSP). The idea is to minimize the loans and to slowly build up an emergency fund (from the extra $100 that get put into there)
- I have started two part time jobs, where to money gets funnelled into my TFSA (for the purposes mentioned above). I work for Homework Help, where I get paid to tutor math in the evenings. I also tutor 3-4 students each week (it was supposed to be 4 but the last one has cancelled the last three weeks, so I am counting on three now). The idea of these extra jobs is to use the money for savings and/or paying things off, not for the regular expenses for week to week. This is important, because when second semester starts (February), we are getting close to baby time and my energy will (properly) go to my family rather than gaining extra cash. The plan is to have my credit cards at zero and another student loan paid off by the time the baby is born.
- When the TSX hit around 12500, I dumped half of my Canadian Index fund into a bond index, with all of my current contributions going into the Canadian Index fund. The TSX has continued to rise, but I have taken my profits from it. Long term I think this is going to work. I will only re-balance next when the TSX hits 13500.
- Finally I have been thinking about using the Smith Manoeuvre (this will be once my student loans get paid off). The idea is that you borrow for investment purposes, and then the loan is tax deductible, and with the tax benefits you put that towards your non-deductible loans. It makes a lot of sense as you gain equity in your house. The plan for me would be to pay minimal on your loans, and then increase the loan for the amount of equity that you have on your house. Theoretically, when you are done paying your mortgage, you can either pay off your Smith loan, or continue to keep it and keep the deductions and increase your investments with the extra money. There will be considerable more planning as we get closer, but it makes a lot of sense. There will be little change in the daily handling of my finances, but there will be a much larger tax deduction and more investments in the long haul.
Thanks for reading!
I have been updating our net worth on spreadsheets, and will update the post either later today or this week.
Thursday, September 2, 2010
The Housing Market
I was alarmed the other day when I was watching the news and it was reported that we are on the verge of a housing bubble in major cities in Canada. "Yeah right..." was my initial thought, but looking at the numbers I may have changed my mind.
The statistics that the show shared was that the average house is now valued at 4.7 to 11.3 times the annual household salary. Now quickly run the numbers to see how much house the minimum and the maximum would be for you. frugala and I make a little more than $100K per year together, so for us that would be from $470,000 to $1.1 million for a house. I am having a difficult time finding ways to have our next mortgage for $250,000 so these numbers are impossible.
Historically, the books have said that you should spend about 2.5x your annual salary on your house. What is the problem if you have a house that is worth $1.1 million and you make $100,000 per year, other than the $5251.57 monthly mortgage (that is 4% interest in my calculations over 25 years which isn't possible I think to pay on $100,000 per year). Since our interest rates are basically at 0%, any increase will cause these houses to be out of people's price range. If we change my calculation above to 3% over 35 years compounded monthly (you can tell I am getting ready to go back to school) and a $800,000 mortgage, that is still $3078.80 per month. These people will be house-poor (meaning that they live in a beautiful home but will be unable to afford anything outside of their house).
I prefer to be a little more flexible with my income. My suggestion, if you are unable to afford a standard 25 years mortgage then you can't afford the house. Another great suggestion that I read was for the six months before you decide to move, put the amount of your rent aside for savings (so essentially you are paying double for rent). If you can do this comfortably, then you can afford to buy a house.
The statistics that the show shared was that the average house is now valued at 4.7 to 11.3 times the annual household salary. Now quickly run the numbers to see how much house the minimum and the maximum would be for you. frugala and I make a little more than $100K per year together, so for us that would be from $470,000 to $1.1 million for a house. I am having a difficult time finding ways to have our next mortgage for $250,000 so these numbers are impossible.
Historically, the books have said that you should spend about 2.5x your annual salary on your house. What is the problem if you have a house that is worth $1.1 million and you make $100,000 per year, other than the $5251.57 monthly mortgage (that is 4% interest in my calculations over 25 years which isn't possible I think to pay on $100,000 per year). Since our interest rates are basically at 0%, any increase will cause these houses to be out of people's price range. If we change my calculation above to 3% over 35 years compounded monthly (you can tell I am getting ready to go back to school) and a $800,000 mortgage, that is still $3078.80 per month. These people will be house-poor (meaning that they live in a beautiful home but will be unable to afford anything outside of their house).
I prefer to be a little more flexible with my income. My suggestion, if you are unable to afford a standard 25 years mortgage then you can't afford the house. Another great suggestion that I read was for the six months before you decide to move, put the amount of your rent aside for savings (so essentially you are paying double for rent). If you can do this comfortably, then you can afford to buy a house.
Monday, August 16, 2010
New Baby and New Yearly Goal
frugala and I are pregnant! We formally announced it at our six month wedding anniversary on Saturday so I can talk about it on the blogosphere. With a baby on the way, for the next school year I am going to shift my plans from saving to paying off debt.
I got a new job at the Homework Help centre, which will pay me about $130 per week, and along with tutoring on the side, I should have more disposable cash this year. The plan will be to get my student loans paid off before the baby is born (or at least close to that time).
Right now I save $200 per paycheque and put $500 towards my mortgage and $400 towards my student loans (monthly). Out of my money from the Homework Help, all will go towards my student loans. I should get two raises this year, one from seniority and one from moving up to the highest category. I estimate this will be about $200, so I will take $100 from that. My mortgage will go up to $525 and my savings will go to $275. The shift will be that $75 will go to my RRSP and $200 going to my TFSA. Then every time my TFSA gets to $1100, $1000 will be removed to pay towards a student loan. In this way, lots will be paid off my loans. As well $200 x 26 pays per year is $5200 so I shouldn't get into trouble with the government over the $5000 cap on the TFSA (considering that I have undercontributed for the first two years).
In this way I am still making my regular payments, and the extras are coming out of my TFSA. I will comment on the effectiveness in the upcoming weeks (once it happens in September), as well as the price of having a baby and how the extra work on the side is going. It is a plan anyway...
I got a new job at the Homework Help centre, which will pay me about $130 per week, and along with tutoring on the side, I should have more disposable cash this year. The plan will be to get my student loans paid off before the baby is born (or at least close to that time).
Right now I save $200 per paycheque and put $500 towards my mortgage and $400 towards my student loans (monthly). Out of my money from the Homework Help, all will go towards my student loans. I should get two raises this year, one from seniority and one from moving up to the highest category. I estimate this will be about $200, so I will take $100 from that. My mortgage will go up to $525 and my savings will go to $275. The shift will be that $75 will go to my RRSP and $200 going to my TFSA. Then every time my TFSA gets to $1100, $1000 will be removed to pay towards a student loan. In this way, lots will be paid off my loans. As well $200 x 26 pays per year is $5200 so I shouldn't get into trouble with the government over the $5000 cap on the TFSA (considering that I have undercontributed for the first two years).
In this way I am still making my regular payments, and the extras are coming out of my TFSA. I will comment on the effectiveness in the upcoming weeks (once it happens in September), as well as the price of having a baby and how the extra work on the side is going. It is a plan anyway...
Monday, August 2, 2010
Net Worth Update - August 1st, 2010
frugala's and my numbers are finally linked, and despite doing two weeks of painting and installing laminate flooring (which costs money), we still ended up okay for our first update.
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- down $15,682.92 from July 17th, 2010
frugala donated some of her assets to remove one of my loans, which is why this number looks really bad. The theory is that I will be taking on all of the bills myself in exchange instead of splitting them down the middle which has happened in the past.
LIABILITIES:
- better $15,775.32 from July 17th, 2010
Once again, with a loan paid off, this looks very nice. Next week will have more realistic numbers.
NET WORTH:
- better $92.40 from July 17th, 2010
With my loan being charged a much higher interest rate than what frugala was earning on her GIC, this will naturally improve more. A nice start though!
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,713.43
Highest Value in Last 2 Years: 13771.25 (August 29th, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- down $15,682.92 from July 17th, 2010
frugala donated some of her assets to remove one of my loans, which is why this number looks really bad. The theory is that I will be taking on all of the bills myself in exchange instead of splitting them down the middle which has happened in the past.
LIABILITIES:
- better $15,775.32 from July 17th, 2010
Once again, with a loan paid off, this looks very nice. Next week will have more realistic numbers.
NET WORTH:
- better $92.40 from July 17th, 2010
With my loan being charged a much higher interest rate than what frugala was earning on her GIC, this will naturally improve more. A nice start though!
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,713.43
Highest Value in Last 2 Years: 13771.25 (August 29th, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
Saturday, July 24, 2010
Home Renovations
As of now, for our home renovations, we have
- ripped out the carpet and kitchen (3 person days)
- bought laminate floor and underpad (approx. $1000)
- bought paint and accessories (approx. $200)
- painted one coat on the main floor (2.5 person days)
We will still have to put down the laminate floor, paint the kitchen cabinets, paint the rest of the kitchen and possibly put another layer on the main floor.
The plan is that when we look to sell, be it next summer or whenever, that the house has been improved so that it is ready to go. Even if we decide to stay for a few years, it would be much more livable. Financially, doing cosmetic house renovations always increases the value of your house when you go to sell.
- ripped out the carpet and kitchen (3 person days)
- bought laminate floor and underpad (approx. $1000)
- bought paint and accessories (approx. $200)
- painted one coat on the main floor (2.5 person days)
We will still have to put down the laminate floor, paint the kitchen cabinets, paint the rest of the kitchen and possibly put another layer on the main floor.
The plan is that when we look to sell, be it next summer or whenever, that the house has been improved so that it is ready to go. Even if we decide to stay for a few years, it would be much more livable. Financially, doing cosmetic house renovations always increases the value of your house when you go to sell.
Saturday, July 17, 2010
Net Worth Update - July 17th, 2010
frugala and I have finally decided to combine our finances...on the spreadsheet at least. So this is my final individual net worth update. frugala's numbers are in there, but the relative totals for mine will be this week alone.
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- up 647.55 from July 3rd, 2010
- up $6938.09 from July 17th, 2009 (one year ago)
Slow and steady wins the race, and I have made nice consistent progress on this front since I have started recording. Even without frugala's numbers in there, my assets are at an all time high!
LIABILITIES:
- better $799.99 from July 3rd, 2010
- better $16,453.74 from July 17th, 2009 (one year ago)
Because of the three pay month and the way that the numbers fell, I had two major loans come off this pay period thus the nice liabilities numbers fall. Even without Frugala's numbers, my liabilities are easily at the lowest point since I bought my house. Steady progress!
NET WORTH:
- better $1447.54 since July 3rd, 2010
- better $23,391.83 from July 17th, 2009(one year ago)
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,569.65
Highest Value in Last 2 Years: 13771.25 (August 29th, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- up 647.55 from July 3rd, 2010
- up $6938.09 from July 17th, 2009 (one year ago)
Slow and steady wins the race, and I have made nice consistent progress on this front since I have started recording. Even without frugala's numbers in there, my assets are at an all time high!
LIABILITIES:
- better $799.99 from July 3rd, 2010
- better $16,453.74 from July 17th, 2009 (one year ago)
Because of the three pay month and the way that the numbers fell, I had two major loans come off this pay period thus the nice liabilities numbers fall. Even without Frugala's numbers, my liabilities are easily at the lowest point since I bought my house. Steady progress!
NET WORTH:
- better $1447.54 since July 3rd, 2010
- better $23,391.83 from July 17th, 2009(one year ago)
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,569.65
Highest Value in Last 2 Years: 13771.25 (August 29th, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
Saturday, July 3, 2010
Net Worth Update - July 3rd, 2010
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- down 349.00 from June 19th, 2010
- up $6571.09 from July 3rd, 2009 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market took a dip this week and thus my assets dropped for this week. In the next net worth update, frugala's assets will join mine on paper so these will rise significantly!
LIABILITIES:
- better $3.27 from June 19th, 2010
- better $16,957.30 from July 3rd, 2009 (one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). Even though this was my three pay month, things didn't go quite as nicely as I had hoped. On my next update, I will have all my bills coming off so there will be a huge decrease here.
NET WORTH:
- worse $345.72 from June 19th, 2010
- better $23,528.39 from July 3rd, 2010 (one year ago)
You have to ignore the slight bumps and look at the long term progress. We are going on vacation (which I have saved up for throughout the year so it won't be affecting my assets/liabilities) so we'll see how this affects me in the upcoming weeks.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,196.06
Highest Value in Last 2 Years: 14153.57 (July 3rd, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
ASSETS:
- down 349.00 from June 19th, 2010
- up $6571.09 from July 3rd, 2009 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market took a dip this week and thus my assets dropped for this week. In the next net worth update, frugala's assets will join mine on paper so these will rise significantly!
LIABILITIES:
- better $3.27 from June 19th, 2010
- better $16,957.30 from July 3rd, 2009 (one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). Even though this was my three pay month, things didn't go quite as nicely as I had hoped. On my next update, I will have all my bills coming off so there will be a huge decrease here.
NET WORTH:
- worse $345.72 from June 19th, 2010
- better $23,528.39 from July 3rd, 2010 (one year ago)
You have to ignore the slight bumps and look at the long term progress. We are going on vacation (which I have saved up for throughout the year so it won't be affecting my assets/liabilities) so we'll see how this affects me in the upcoming weeks.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,196.06
Highest Value in Last 2 Years: 14153.57 (July 3rd, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
Sunday, June 20, 2010
Net Worth Update - June 19th, 2010
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- up $602.22 from June 5th
- up $7175.48 from June 19th, 2009 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market rose this week bumping my assets. Three condos on my block sold this week (all for at least $20,000 more than I have mine valued at), so when frugala and I decide to move, there will be some extra assets in our pockets.
LIABILITIES:
- better $280.30 from June 5th
- better $17,157.58 from June 19th, 2009(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). A nice little improvement, which I hope to continue as the summer progresses.
NET WORTH:
- better $882.51 from June 5th, 2010
- better $24,333.06 from June 19th, 2009(one year ago!)
A nice set of weeks, and I want to keep this up through the summer. I will have a few tutoring gigs throughout the summer which I will put directly against loans to pay them down. As well, my buckets are filling nicely, meaning that when we need to buy new floors, or new clothes for me, or go to Golden Lake for a week, it will not impact my liabilities. This cash isn't included on these spreadsheets so there will be no effect.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,927.59
Highest Value in Last 2 Years: 14790.15 (June 19th, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
ASSETS:
- up $602.22 from June 5th
- up $7175.48 from June 19th, 2009 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market rose this week bumping my assets. Three condos on my block sold this week (all for at least $20,000 more than I have mine valued at), so when frugala and I decide to move, there will be some extra assets in our pockets.
LIABILITIES:
- better $280.30 from June 5th
- better $17,157.58 from June 19th, 2009(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). A nice little improvement, which I hope to continue as the summer progresses.
NET WORTH:
- better $882.51 from June 5th, 2010
- better $24,333.06 from June 19th, 2009(one year ago!)
A nice set of weeks, and I want to keep this up through the summer. I will have a few tutoring gigs throughout the summer which I will put directly against loans to pay them down. As well, my buckets are filling nicely, meaning that when we need to buy new floors, or new clothes for me, or go to Golden Lake for a week, it will not impact my liabilities. This cash isn't included on these spreadsheets so there will be no effect.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,927.59
Highest Value in Last 2 Years: 14790.15 (June 19th, 2008)
We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).
Friday, June 18, 2010
More Buckets: Donations
Another bucket that I created for myself this year is my "donations" bucket. Everyone feels that they should give more (or at least I do), and when a good cause comes along that I feel I should donate (be it sponsoring one of my students, or at church, or just a worthy cause) I used to have major problems with this because of my lack of spare cash. This year I have begun putting $20 aside each paycheque towards "donations" and then one I need to, this money comes out of that bucket. From a personal point of view, it makes you feel good to donate, and from a financial point of view you get a generous tax deduction because of it so everyone wins!
Monday, June 14, 2010
My Most Important Bucket of 2010
I am somewhat of a spender. What I have to do to limit myself is not to bring my wallet with me when I go shopping (or to school in the morning), as well as only spend cash within a paycheque. My wife and I went for some snacks last night and I said to her "I think this is the first time in the last year that I have used my debit card".
Nonetheless, in order to manage my cash I have decided to create "jars" or "buckets" of money that I will contribute to each paycheque and then spend out of them from day to day. When the cash is gone, I have no money to spend. It is a great system to me and has allowed me to limit my spending.
My most important bucket that I have created for myself in 2010 though has been the "XMas Bucket". Now, you may be asking yourself, isn't it June? Why is Christmas so important to you in June. Let me clarify myself: this cash isn't just used for Christmas, although it was the original intent, it is used for gifts all through the year. So when people have babies, or it is Father's Day, or you go to a wedding or whatever, you don't put yourself in the hole because of it. It is also always good to have some spare cash laying around so that you can take part in these wonderful events as the year progresses.
On the negative side, my goal was to have Christmas entirely paid for before hand. For 2011 I will probably have to create another bucket for Christmas (because that is definitely my biggest gift giving time of the year) along with my generic gifts bucket, so I don't go into the hole around Christmas as usual.
Nonetheless, in order to manage my cash I have decided to create "jars" or "buckets" of money that I will contribute to each paycheque and then spend out of them from day to day. When the cash is gone, I have no money to spend. It is a great system to me and has allowed me to limit my spending.
My most important bucket that I have created for myself in 2010 though has been the "XMas Bucket". Now, you may be asking yourself, isn't it June? Why is Christmas so important to you in June. Let me clarify myself: this cash isn't just used for Christmas, although it was the original intent, it is used for gifts all through the year. So when people have babies, or it is Father's Day, or you go to a wedding or whatever, you don't put yourself in the hole because of it. It is also always good to have some spare cash laying around so that you can take part in these wonderful events as the year progresses.
On the negative side, my goal was to have Christmas entirely paid for before hand. For 2011 I will probably have to create another bucket for Christmas (because that is definitely my biggest gift giving time of the year) along with my generic gifts bucket, so I don't go into the hole around Christmas as usual.
Saturday, June 12, 2010
Too Tight?
As you have read recently, the improvement in my finances has been slowing recently. There are two options to improve this: either spend less, or earn more money. I had been earning more money for tutoring, and this kept me moving in the right direction. Additionally, one of my biggest loans was recently paid off so that will give me a little more breathing space, but yesterday evening was an example to myself that I am far too tight now.
I received my HST cheque for $100 from the Ontario Government last night (the next coming in December 2010). I was fairly excited, because despite the fact that a lot of things will be more expensive because of this, I had just received a cheque for $100. I talked to "frugala" and gave her about five scenarios on what I could do with this money. She finally looked at me and said "It's only $100". At that moment I knew that my financial picture was far too tight...
I received my HST cheque for $100 from the Ontario Government last night (the next coming in December 2010). I was fairly excited, because despite the fact that a lot of things will be more expensive because of this, I had just received a cheque for $100. I talked to "frugala" and gave her about five scenarios on what I could do with this money. She finally looked at me and said "It's only $100". At that moment I knew that my financial picture was far too tight...
Saturday, June 5, 2010
Net Worth Update - June 5th, 2010
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- up $259.90 from May 22nd
- up $6707.03 from June 5th, 2009 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. Things are bouncing back quite nicely, and because I live in a condo I can get an accurate value of my house based on what others in the neighbourhood and my estimates are extremely low. What this means is that when I sell, my assets will immediately rise because I am underestimating the equity in my house.
LIABILITIES:
- better $93.89 from May 22nd, 2010
- better $16,379.97 from June 5th, 2009(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). Although the year-to-year numbers have been great, the week to week pace has slowed to almost a crawl. Since April 24th, I have only improved about $400. This will be my goal in the summer not to make any hugely extravagent purchases (although we are planning to paint and put laminate flooring in...)
NET WORTH:
- better $353.79 from May 22nd, 2010
- better $23,087.00 from June 5th, 2009(one year ago!)
Things are starting to slow down for me, and without me doing summer school this year I will be unable to make a nice dent in my loans, although the sanity is more than worth it. I just have to remember that this is a long range plan rather than a short term plan.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,569.61
Highest Value in Last 2 Years: 15073.13 June 18th, 2008
For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September.
ASSETS:
- up $259.90 from May 22nd
- up $6707.03 from June 5th, 2009 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. Things are bouncing back quite nicely, and because I live in a condo I can get an accurate value of my house based on what others in the neighbourhood and my estimates are extremely low. What this means is that when I sell, my assets will immediately rise because I am underestimating the equity in my house.
LIABILITIES:
- better $93.89 from May 22nd, 2010
- better $16,379.97 from June 5th, 2009(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). Although the year-to-year numbers have been great, the week to week pace has slowed to almost a crawl. Since April 24th, I have only improved about $400. This will be my goal in the summer not to make any hugely extravagent purchases (although we are planning to paint and put laminate flooring in...)
NET WORTH:
- better $353.79 from May 22nd, 2010
- better $23,087.00 from June 5th, 2009(one year ago!)
Things are starting to slow down for me, and without me doing summer school this year I will be unable to make a nice dent in my loans, although the sanity is more than worth it. I just have to remember that this is a long range plan rather than a short term plan.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,569.61
Highest Value in Last 2 Years: 15073.13 June 18th, 2008
For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September.
Saturday, May 22, 2010
Net Worth Update - May 22nd, 2010
It's been a long while since an update, but here it is!
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- down $139.73 from April 24th
- up $7084.30 from May 22nd, 2010 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market had a correction recently, which affects my assets
LIABILITIES:
- better $287.30 from April 24th, 2010
- better $16,787.51 from May 22nd, 2010(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). I continue to make bill payments slowly decreasing my liabilities. I had to pay for my last two teachers college courses which affected this.
NET WORTH:
- better $147.57 from April 24th, 2010
- better $23,871.81 from May 22nd, 2010(one year ago!)
Things are starting to slow down for me, and without me doing summer school this year I will be unable to make a nice dent in my loans, although the sanity is more than worth it. I just have to remember that this is a long range plan rather than a short term plan.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,521.35
Highest Value in Last 2 Years: 15073.13 June 18th, 2008
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- down $139.73 from April 24th
- up $7084.30 from May 22nd, 2010 (one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market had a correction recently, which affects my assets
LIABILITIES:
- better $287.30 from April 24th, 2010
- better $16,787.51 from May 22nd, 2010(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). I continue to make bill payments slowly decreasing my liabilities. I had to pay for my last two teachers college courses which affected this.
NET WORTH:
- better $147.57 from April 24th, 2010
- better $23,871.81 from May 22nd, 2010(one year ago!)
Things are starting to slow down for me, and without me doing summer school this year I will be unable to make a nice dent in my loans, although the sanity is more than worth it. I just have to remember that this is a long range plan rather than a short term plan.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 11,521.35
Highest Value in Last 2 Years: 15073.13 June 18th, 2008
Friday, May 7, 2010
Babies and RESPs
My brother and his wife just had twins (congratulations from frugala and I) so we decided that a nice 0th birthday gift for them would be a contribution to their RESP (once they have their birth certificates and social insurance numbers I guess). The benefits of these savings are that you begin saving for post-secondary education, the money grows tax free on the growth, and that the government contributes between 20 and 40% extra to your contributions (based on your income) and that you can have up to $50,000 for each child.
For more information, check out RESP Information for more information.
As an aside, some shock in the stock markets yesterday as a slip of the finger may accidentally have caused a 1000 point drop in the Dow Jones. Check out this link for more information.
For more information, check out RESP Information for more information.
As an aside, some shock in the stock markets yesterday as a slip of the finger may accidentally have caused a 1000 point drop in the Dow Jones. Check out this link for more information.
Friday, April 30, 2010
Students and Money
This week we started our Finance unit in MCR3U at the school that I teach at. I decided this year to began our unit with a discussion of how much University would cost, what the ways would be to obtain money for school, and how much debt you could have and how you can best deal with it.
University tuition has jumped on average 4.5% per year over the least decade, to the point where it is expected to cost almost $17000 per year for residence, books and tuition. This should be frightening for parents and their teenagers alike.
We then talked about the ways to get money for school: gifts, working, OSAP, personal loans and so on. The students sat in disbelief as I explained about OSAP and how it would be paid back and how much their loans would cost them on a monthly basis (and in return why I cannot afford a car).
We then spent the second day talking about more positive things: how to save your money to be a millionaire, how real estate and starting your own business have fundamentally been the most successful ways to become rich. Finally, the big picture is if you spend less than you make, you will end up being rich. We talked about stocks, bonds, RRSP, TFSAs, mutual funds and all the rest of the jargon.
Finally we talked about ways to reduce your debt. I gave the example of a mortgage, and by increasing your mortgage by any amount shaves the time and the interest off what you owe. I hope every time that I do this that at least a few people get something out of this and that students learn to save.
University tuition has jumped on average 4.5% per year over the least decade, to the point where it is expected to cost almost $17000 per year for residence, books and tuition. This should be frightening for parents and their teenagers alike.
We then talked about the ways to get money for school: gifts, working, OSAP, personal loans and so on. The students sat in disbelief as I explained about OSAP and how it would be paid back and how much their loans would cost them on a monthly basis (and in return why I cannot afford a car).
We then spent the second day talking about more positive things: how to save your money to be a millionaire, how real estate and starting your own business have fundamentally been the most successful ways to become rich. Finally, the big picture is if you spend less than you make, you will end up being rich. We talked about stocks, bonds, RRSP, TFSAs, mutual funds and all the rest of the jargon.
Finally we talked about ways to reduce your debt. I gave the example of a mortgage, and by increasing your mortgage by any amount shaves the time and the interest off what you owe. I hope every time that I do this that at least a few people get something out of this and that students learn to save.
Sunday, April 11, 2010
Net Worth Update - April 10th, 2010
Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.
ASSETS:
- up $350.09 from March 26th, 2010
- up $7898.81 from April 10th, 2009(one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market continues to inch up, helping me out.
LIABILITIES:
- better $1450.99 from March 26th, 2010
- better $15,969.18 from April 10th, 2009(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). I got my tax return this week and that is what really helped this segment of my net worth improve!
NET WORTH:
- better $1801.08 from March 26th, 2010
- better $23,867.99 from April 10th, 2010(one year ago!)
Things have really been moving in the right direction for me, especially with my tax return giving me a nice boost. I have to remember to keep the positive momentum and the plan in place nad good things will happen in the long run for me financially.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 12,176.84
Highest Value in Last 2 Years: 15073.13 June 18th, 2008
ASSETS:
- up $350.09 from March 26th, 2010
- up $7898.81 from April 10th, 2009(one year ago)
These assets include my house (I give it 1% appreciation each year in my appreciation), my RRSP and my TFSA. The stock market continues to inch up, helping me out.
LIABILITIES:
- better $1450.99 from March 26th, 2010
- better $15,969.18 from April 10th, 2009(one year ago)
These liabilities include my mortgage, student loans and a consolidation loan (mainly for my Masters Degree for teaching). I got my tax return this week and that is what really helped this segment of my net worth improve!
NET WORTH:
- better $1801.08 from March 26th, 2010
- better $23,867.99 from April 10th, 2010(one year ago!)
Things have really been moving in the right direction for me, especially with my tax return giving me a nice boost. I have to remember to keep the positive momentum and the plan in place nad good things will happen in the long run for me financially.
The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.
TSX Graph
Current Value: 12,176.84
Highest Value in Last 2 Years: 15073.13 June 18th, 2008
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