Financial Planning Talk

[rayne008]

My insurance alone is stupid
195 2 vehicles
115 life
165 house
335 blue cross
$810 Total

I'm 40 now and barely have 80k saved in a pension.
Wife, kids, mortgage, utilities, Very little opportunity to save more than I am now.

Obviously I need to work well into my sixties. Retirement, pft.

[indes]

I'm with CC, plenty of time to save when I'm dead.

[peter12]

No, no kids, yet. I realize that totally changes things.

[Locke]

I also subscribe to the CC retirement plan. Getting old seems like no fun so I'll just call it a day when it isnt fun anymore and hopefully at that point I'm polite enough to not make a mess.

[Ozy_Flame]

If I can't afford my life after I stop working, my retirement is going to include a skydive sans parachute.

[Nufy]

Retirement !!!

I'll be working till noon the day of my funeral...

[Fuzz]

Ooo, look at mister fancy pants, taking the afternoon off.

[Nufy]

Originally Posted by Fuzz

Ooo, look at mister fancy pants, taking the afternoon off.

Yeah...I'm a double meat kinda guy...

[Locke]

I'm not going to let some young punk kid take mer jerb!

[Erick Estrada]

Continued employment runs are still possible in this day and age as I'm on a 20 year run where I have not had longer than a two week holiday or layoff. I just work and work. That is going to be tested now as it could end next week, next month, or next year. That said I already have a succession plan as I've started moonlighting with a new up and coming company that could lead to new possibilities.

[Regorium]

Originally Posted by bizaro86

I truly believe people would save more if they understood compound interest.

Maybe you don't like 8% as an assumption. If you don't, I had to extend out to age 66 to get to $1MM at 6% returns. However, at 67 your OAS kicks in, and you could start taking CPP as well, so the $1MM would go further.

I didn't have to assume someone gave you $$, but I did have to assume diligent savings from day 1. On the other hand, if you set it up automatically every paycheck, you miss it a lot less.

And what happens when you suffer a full year of zero income where you have to draw down your savings like some diligent savers have done in the past year?

What about when your 8% portfolio, because it's energy focused (because we're in calgary), craters 40-50% in a year, with no real chance for improvement?

What happens when your house becomes worth a fraction of its value because the industry around it changes?

Compound interest is beautiful and all, but this comic illustrates exactly why it isn't really the key to your success.

[ranchlandsselling]

So we've got 6 replies that include 5 non-retirement solutions and one lottery win. Impressive.

[Locke]

Originally Posted by ranchlandsselling

So we've got 6 replies that include 5 non-retirement solutions and one lottery win. Impressive.

Me being an idiot. Nothing to see here.

[ranchlandsselling]

nm

[Locke]

Originally Posted by ranchlandsselling

I think there were 5, one of which might have been edited to say nothing now. But given the thread and recent news about counselling centres overflowing I thought it was better to not actually say it quite like that.

Fair enough. I figured it was fine because it was in reference to retirement.

[peter12]

My wife and I started seriously planning for our financial lives together when I was around 27.

It really has to do with having a very pessimistic outlook as to your earning potential - she is doing law school now and I have a graduate degree - so we are both pretty high skill workers that could probably expect to be in top 5% income earners in our early 40s. Right now though, we still have school debt, and as I have said before, my wife is approaching a big increase in her student debt load.

So we have just been honest since the beginning. We don't own a car, and we will never buy a house until we can honestly afford it as a consumption good, not as some sort of bizarre savings vehicle or "investment." We never eat out. We used to save everything to an RRSP, when that hit the liquidity threshold of $25,000, we switched to an ETF, and the TFSA.

We don't have a lot of money saved - certainly nothing close to 100K, but we are well on the way to having a solid financial foot before we will have a family or even before we are both working.

To anyone else in a similar situation, I would recommend:

- dialing seriously back on luxury purchases. As everyone knows, for awhile, I liked to talk up my wardrobe. I definitely spent around $4k per year on clothing. That is obscene. Thankfully, I still have that wardrobe, and I take good care of it so that I really only need to spend a few hundred a year on underwear, socks, and recreational clothing.

- being satisfied with apartment living. I cannot tell you how many friends I have now in their late 20s and early 30s who own expensive townhouses or single detached homes who will be locked into mortgages worth more than the house. We have a plan for long-term housing like we plan for everything else. This includes contingencies.

- Substitute location for commuting. Been renting the same Beltline apartment for 3 years.

- Don't own a car if you don't absolutely need one or absolutely love cars.. Situate yourself close to cheap transportation.

- Learn to cook at home. Simple. We go out once a month for ramen, which I have now learned to make perfectly at home.

- Learn a bit about finance. Don't pay an investment adviser 2.7% to make decisions that you should make yourself.

- Take advantage of this era's dirt-cheap entertainment. Read a book. Have friends over for dinner. Find one thing you like in town and do it once or twice a month.

All of this seems like common sense, but I would say even this simple life plan is followed by barely 10% people that I know.

[fundmark19]

Originally Posted by Locke

Me being an idiot. Nothing to see here.

I totally assumed you would go out with a tax evasion scheme. Nobody ever suspects the good accountant to turn bad!

[Locke]

Originally Posted by fundmark19

I totally assumed you would go out with a tax evasion scheme. Nobody ever suspects the good accountant to turn bad!

I once had a pseudo-plan to scam American Express by maxing out a Black Card and then faking my death and moving to a non-extraditional country.

Unfortunately it is much more difficult to get a Luxembourgian passport than one initially assumes.

Those guys are pretty stingy with those things.

[saillias]

Originally Posted by polak

Wow according to bizaros chart I'm decades ahead of where I should be on one side and decades behind where I should be on the other....

I'm too lazy to even try and read it with the formatting as it is, so I assume I'll be paycheque to paycheque for life.

[OMG!WTF!]

Originally Posted by ranchlandsselling

But c'mon, $1.5 million by 50 is the dumbest thing I've ever heard. If I lost my job I'd likely sell one of our vehicles. Drive something cheap, like a $5k car. Put $15k in the bank

Sell one now. Use that 15k for something productive.

I had a great job out of university but lost it due to an immigration snafu. It sucked but it was the best thing. Pay checks after that just pissed me off. I ended up doing it all backwards and can't take credit for anything other than an over riding financial thesis that money is a tool and I can get more money if I use it properly instead of spending it. But with that in mind you tend to find your own luck. I think some people will actually be better off after drawing the death card in this job market.