Sept 2013 – Investment Update

The following is an update of Tim’s plan to retire early.  Please note the house is paid off, so net worth is no longer tracked.

To track my progress I’ve decided to track both my expenses and my investment gains.  So once the investments gains are consistently beating my expenses I’m financially independent and can stop working.  I think my ideal tracking of this would be one full year of investment and spending data, but I don’t have that yet.  So for now I’ll do a trailing six 12 month average on spending (but excluding vacations) and investments for the calendar year to date.


Account (Contribution), [+/- Gain or Loss less contributions]

RRSP $34,860 ($200), [+$210]
LIRA $12,860 ($0), [+$220]
TFSA $33,100 ($3500), [+$410]
Pension $78,680 ($1050), [+$1340]
Wife’s RRSP $39,560($0), [+$410]
Wife’s Investment Account $85 ($0), [$0]
Wife’s TFSA $28,700 ($0), [+$560]
My Investment Account $70 ($0), [$0]
High Interest Savings Account $1310 (+$600),[$10]

Investment Net Worth $229,325 ($5350 ), [+$3480 or +1.5%]

(YTD Contribution: $31,048), [YTD Gain: $15,576 or +8.5%], YTD Avg Monthly Gain $1730

Spending Averages

Last Month $2095

Trailing Last 12 Months (less mortgage payments) $3256


Number of months spending covered by investment gains: 0.53 {Target 1.0 or higher}


It’s official, I’m procrastinating on closing our investment accounts.  I think perhaps because they are such a small amount of money I just don’t worry about it.  Yet the small things do matter over a longer period of time.  For example, I’m closing in next month on one year of being mortgage free.  Paying off the mortgage didn’t happen by ignoring small things, but rather many little thing over a long period of time.  Any way consider my head smacked and reminder given to myself to get on closing those accounts.

This also marks the month where I have finished fully funding my TFSA account.  My wife’s TFSA should be finished next month.  I’ll have a post up later in October with some details on those accounts, like what we are invested in now and the yields.

Any questions?

(click for a bigger version)

Sept 2013 Net Investment

Up and Out

You are standing on a cliff with the best view ever, but you are also strapped into this device that is suppose to make you fly, but you keep doubting it will work…so do you ever jump off?

While that might sound extreme, it happens all the time to people on the edge of retirement.  You can apply logic and do math for years trying to sooth your fears, but in the end the final jump off that cliff into retirement is all about emotion.  Can you answer the question: am I ready for retirement with a firm “yes!”.

After all you are entering an entirely new phase of your life where you will start living off your assets rather than focus on growing them.  Fear is a normal response and frankly damn useful.  It’s good to have some fear and double check your numbers and get a second opinion (but don’t take the results too seriously…some places don’t really handle early retirement financially modelling all that well…case in point I’ve seen online calculators that won’t go low enough for my target retirement age).

It’s also good to do a little fear testing by playing the game: what’s the worst that can happen?  Some classic examples are: what if I run out of money when I’m 80 (solution: sell the house), what if I get bored (solution: have some hobby or travel plans lined up to keep you busy), what if I miss work (solution: consider what jobs that you could do part time or seasonal).  A large part of fear is not knowing the answer, so if you can come up up with some answers there is less to fear about the decision to retire.

Then once you address the fears about retirement you might need a bit of motivation to pull the pin.  So turn the fear game around and play the other side: what if things go better than I expect?  What if I get an inheritance that I wasn’t expecting? Go travel more!  What if I excel at one of my new hobbies and make money at it? I could buy better supplies and try out some really big projects! What if I find a part time, low stress job that I LOVE to do? Enjoy some of the extra money and then perhaps do some charity work with the rest.

Life isn’t typically all bad, there are some good things that happen to people as well.  So keep that in mind when you are standing on the edge of your retirement.  That way you can jump off your cliff and go up and out.  So what are your fears about retirement or ideas on what could turn out better than expected?

Please Blow Some Money

It occurs to me that some people have problems with personal finance bloggers who blow money on specific events, experiences or things.  People tend to mock those that spend money on:

  • The dream wedding for $20K
  • That huge trip that that didn’t need for $7.5K (yep that would be me this year)
  • The new car for $20 to $30K (I also did something similar last year)
  • The overly large house for an extra $50k

Yet are any of these things wrong to spend money on? The answer like many things in life…it depends.  Are the people in question in good financial shape (low or no debt, good savings)?  Did the pay for the item in cash with no extra debt?  Do they already have a firm savings plan in place for their life goals like retirement?  And perhaps the most important question of all….do they REALLY want that item or experience in order to make them happy?

Frankly I don’t really care what people blow their money on if they are being generally responsible with their financial lives (those without any savings, high debt and buy on credit are an entirely different matter).  But if the responsible people think the spending will make them happy and can afford it…go hard and blow that money.

Why? Because the other end of the spectrum away from blowing money is also wrong.  Being a miser with your money won’t win you any prizes or friends and certainly won’t make you happy in the long run.  You have to both plan for the future, but remember to live for today as well.  While I will fully admit that I personally don’t agree with everyone’s particular choices on blowing money, that is fine…after all I’m not spending the money, they are.

In my case, I went over board initially with saving money, I cut too much of our spending, but I didn’t realize it right away.  Yet after we increased our spending a little bit higher I can say I was much happier and less worried about the little spending decisions.  Worrying about buying the odd cup of coffee wasn’t worth the effort when you do it perhaps twice a month.

Personal finance is personal.  We don’t live each others lives, so do try to keep that in mind before we mock others.  So what did you last blow some money on?  It doesn’t have to be big, sometimes the small stuff is just as fun.