Author Topic: Advice for newly debt-free 30 year olds? (Canadian)  (Read 6128 times)

homemadelatte

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Advice for newly debt-free 30 year olds? (Canadian)
« on: September 05, 2013, 01:14:38 PM »
We are 30 years old, with two small children and we are freshly debt free (goodbye student loans and LOC debt!). I'm a part time teacher-librarian earning 45,000 a year and my husband works in HVAC earning 75,000 a year. These modest incomes have allowed us to buy a new home in the outskirts of Calgary 5 years ago, at the height of the boom, and our mortgage sits at about 340,000 (which makes me a little sick to think about frankly).

We both set up automatic contributions to retirement plans at our places of work when we started there 6 years ago. I contribute 6% of my net income and that is matched by my employer into a Defined Contribution Pension Plan. I had really no idea what funds to pick when I opened it, so I chose a fairly high-risk mix of canadian equity, us equity and international equity with some cash and fixed income investments as well. It's been losing some money over the past few years, but I have about $27,000 in there. When I am working, I am contributing about $3800 a year into the plan, and then my employer matches it for a total of $7600.

My husband has a Registered Pension plan and Structured RRSP through his work (no matching unfortunately) and contributes about $6000 a year into that. He currently has about $24,000 in his plan with a similar high risk investment mix.

Because of aggressively paying off debt, we have not yet started buying RRSPs (besides the structured one in my husbands work plan) and we are wondering what amount you think we should be buying each year. The max keeps rolling over each year on our tax papers, so we can contribute as much as we would like....though finding the money will be the hard part.

We tried to meet with a financial advisor in the last year to get advice, but were kind of turned away because we didn't have a significant enough portfolio for them to manage. Any idea where to find someone in Calgary to bounce ideas off of that doesn't care that we aren't rich? :)

Now that we are debt-free we reallllllly realllly want to avoid it at all costs in the future (will you give us a pat on the back for that?) and we have started saving money each week in an account for future planned expenses (sports fees, community fees, vacation, tools, gifts, clothing - basically anything over and above our weekly budget for groceries and gas). I'm hoping that the pain of withdrawing money from this account for things we buy will help us to make good decisions with our money. I am also recording our purchases under each budget in a notebook to make sure we don't go over for the year. So far, so good, we are much more aware of where our money is going, and seeing how prioritizing our spending to experiences we love (like vacation, or playing sports) requires us to not spend on useless crap we don't love :)

Our plan to stay debt-free means that we will only pay cash for items we want to buy, and we will save up for larger purchases and projects. We are also putting the $100/month Child Tax Credit into a Family RESP at our bank for our two small children so we don't go into debt when they go to university.

The only exception we may have to bend on is a car. Here is where I would love your input. We have always driven older, fully paid for cars. Every car I have owned has cost under $6000 and we have paid cash. We currently drive a 97 Infiniti QX4 SUV and it is really getting up there in kms. It still drives well and we have a savings account for repairs that we contribute to weekly so we can pay cash for the few times it's in the mechanic's shop each year. I keep track of the costs of repairs/tires/etc, and in the 3 years we have owned it, we have put about $1500 a year into it. If it needs a major, expensive repair, we will be looking at replacing it. My husband would really like to get a truck, which would enable him to do side jobs on weekends (he installs furnaces, a/c and hot water tanks) which would bring in extra money for our family. We have been researching trucks, and we would really like to buy a used Toyota Tundra, because we trust the quality/longevity of the brand. My husband's previous Toyota (before she went to car heaven) was up to 440,000 kms and still starting up in -30 weather :)

What are your feelings on financing a car? We hope to put a downpayment on a vehicle, and finance the rest and pay it down aggressively.....though part of me wants to wait and save up the WHOLE amount, just so we don't have the stress of debt hanging over our heads, especially since we just got out of that phase! However, we may not have the luxury of all that time if our current vehicle craps out before then. What do you think? Should we even be considering a used $25,000 truck at our income level? Should we just buy another under $10,000 vehicle and pay cash? What kind of car do you drive? :)

This has really turned into a novel. If you got this far, thank you so much for reading!

Thank you in advance for any advice you may have about our retirement savings, and vehicle conundrum.

« Last Edit: September 05, 2013, 02:35:15 PM by homemadelatte »

Frankies Girl

  • Magnum Stache
  • ******
  • Posts: 3028
  • Age: 82
  • Location: The laboratory
  • Typical Ghoul Next Door
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #1 on: September 05, 2013, 04:07:56 PM »
First off, congrats on being debt free!

You used "modest" to describe your combined salaries... I think you do not understand what that word means (tongue in cheek there... :D )

You make a combined total of $120,000 a year. Granted you have a large mortgage payment, but that's still a very respectable  amount, and not modest.

As far as financial advisers... I've gotten amazing advice right here on the forums. I suggest you try asking some questions and see where that leads you, since it is free, and definitely could lead to you figuring out things on your own without having to pay for it. :)

As far as the car situation, if it was me, I would just save up to purchase, since the current vehicle is doing fine so far. A $1,500 average per year is EXCELLENT for an older car's wear and tear, and it's much, much less than you'd be paying out if you bought a new one.

That being said, are you a one car family? If you replace with a truck, you'd need to have the back seat, so there it would be more expensive, and if it is used as a daily driver, it's got pretty crappy gas mileage... so things to consider anyway. I just did a quick search through the used Tundras on Carmax (easiest way for me to find a large amount of them at an average price), and you can get a 5-6 year old one for under $20K, so definitely consider that saving up might take you less time if you're willing to look for at a slightly older vehicle.

As far as financing, the only way I'd do it is the way I did it last time... I financed the purchase to get an extra $500 off, and then paid it off the next month. I went in with the full amount sitting in my bank account and I read through the contract before signing that there was nothing in writing to prevent me from doing this, and then confirmed with the finance company that no penalties would be assessed. The sales guy said there was, but shockingly, he was a bit misinformed on the matter.

KMMK

  • Handlebar Stache
  • *****
  • Posts: 1472
  • Age: 42
  • Location: Edmonton, AB, Canada
    • Meena Kestirke Insurance
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #2 on: September 05, 2013, 06:01:30 PM »
I don't want to rain on your parade, but technically, you are not debt free. That mortgage is a huge amount of debt. That being said, I wouldn't call your salaries modest either. You should be able to get ahead fairly quickly with that income level.

As far as what to do with your money, I'd start with minimizing your expenses as much as you can without ruining your quality of life.
Then decide how much of an emergency fund you need - how stable are your jobs, do you foresee any home repair emergencies, etc. Generally people keep between 3-12 months worth of expenses available, just in case, depending on their personal situation.
You might want to start a car replacement fund, but I'll get to that.
After that, start putting more money into your RSPs to get the tax refund. Generally, I've heard that if you are at close to peak earning potential, go with RSPs over TFSAs. But if you expect to make a lot more in the future, do TFSAs now and save up that contribution room when you need it more because you're in a higher tax bracket.
For information on easy investing, check out this site: http://canadiancouchpotato.com/ which has lots of great info on index fund investing for Canadians.
For paying extra towards your mortgage vs to your RSPs, common thought is that if your investments are making a higher percentage than your mortgage is, it's better to invest. And the tax return is also useful. However, if your mortgage rate is in the 4% plus range, I'd consider getting that paid off sooner than you have too, as most investments aren't paying that great right now. You can always split the difference and put 50% of extra money towards the mortgage and 50% towards RSPs.

For general financial advice, you might want to check out this website http://www.canadianmoneysaver.ca/ and the associated magazine. Lots of great info for Canadian investors about all the questions you have. They also have "shareclubs" which I believe are groups of people who discuss such things. The website lists a group in Calgary.

As far as the car, I don't have a problem with financing, if you have that kind of money available anyhow. We were prepared to pay cash, but the financing was at 0.9% and I couldn't find any fine print to worry about, and just our savings accounts were making 2% at the time, so it made more sense to finance.

If you want to post any details about what your specific expenses are, we may be able to help you maximize the extra money you have to go towards all these things.

Mega

  • Stubble
  • **
  • Posts: 176
  • Location: Burlington, Ontario
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #3 on: September 05, 2013, 07:18:11 PM »
You are a virtual mirror to my family, with minor differences in numbers. It is too late for me to write a full response. Regarding the truck purchase, have you thought about buying a decent trailer for your current vehicle? It is a highly flexible and inexpensive option.

My understanding of the culture in Alberta is trucks are to Albertans as SUVs are to antimustachian soccer moms. You should consider if this is the emotional part of the idea, and the other benefit are only there to make you more comfort with a $25 000 purchase. I am speaking from experience, as I look at our 2012 Jetta Sportwagen TDI, bought new for $35k. We could have easily bought a new Chevy Orlando, which seats 7, for 20k. But I was so focused on the better mileage of the VW.  You can buy alot of gas for $15k.

ThatGuyFromCanada

  • 5 O'Clock Shadow
  • *
  • Posts: 81
  • Location: Calgary Alberta - Canada
    • www.jonathanneufeld.com
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #4 on: September 05, 2013, 08:38:10 PM »
As a fellow Calgarian I understand what you mean when you say "modest" salaries - this city is quite a mix of high pay and high COL.

We don't use a financial adviser so I can't help you there - I would suggest looking into RRSPs and TFSAs as a great way to invest and shelter the income from the government.

homemadelatte

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #5 on: September 05, 2013, 09:11:12 PM »
Thank you everyone for the replies!

JourneyingJon - I know what you mean. $120k sounds like a lot, but with COL it doesn't seem to go as far as it should. Moving isn't an option since our jobs are stable here and all of our family lives here (and we like it too!).

Mega - My DH is a hunter, so a truck is important to haul home the animals that provide meat for us over the year. He also does side jobs in HVAC on weekends that require a truck. Thus far, he's borrowed a truck from family members for the random side jobs he's done, but he could do a lot more with his own truck and not needing to schedule the work around other people. It may be a slightly emotional/Albertan thing, but I do think we sincerely need a truck and a trailer just wouldn't work for the needs he has.

Kestra - Yes! Technically not really debt-free. I considered amending the thread title but I thought it might be too long. I graduated with almost 35k in student loans and other stupid debt, so we are celebrating the long road it took to pay it all off. It's an amazing feeling to finally be done paying it off! I can't imagine what it will feel like to be mortgage-free :) I've bookmarked the couch potato website and already downloaded his investment guide on the Money Saver website to my Kindle. I'm headed to the library to read some issues of the magazine next week.

FrankiesGirl - The current vehicle has served us well. At this point it's starting to rust out around the windshield and leak inside the car, so we need to look at the cost of repairing it so we don't freeze during the harsh Canadian winter! We are a one car family, my DH has a work vehicle provided by his company (a utility van) and I drive the SUV with the kids. A truck will be more expensive on gas....but since we need a truck (reasons mentioned above) we will have to make room for that expense I guess.

Here are some more specific numbers for anyone that might want to analyze and give us some suggestions:

We pay our mortgage weekly $367/week at 2.89% - we've considered increasing the payment, but as a previous poster mentioned, it may make more sense to invest this money to earn a higher rate of return?

Monthly Expenses:

Property Tax $185
Life Insurance $98
Bank Fees $25 (working on either shifting some savings to have this waived, or moving our banking to PC Financial)
House Alarm $35
Netflix $7.99
Cable/Phone/Internet Service $78.65
Cell Phones $130
Home Insurance $48.66
Auto Insurance $79.64
Electricity/Gas/Water $300-450 depending on the season

We contribute $300 weekly into a planned spending account for all of our other budget items throughout the year, so expenses don't mess with our cash flow. It's working well for our family so far:

Here is what we "save" for throughout the year

Community Lake Fees $450 (stupid expensive but we have no choice but to move, and we would lose money on our home!)
Household Projects $1000
Registration for our car $75
AMA Membership $200
Vehicle Maintenance $3000 (saving enough for if we had two vehicles even though we don't right now....just in case)
Vacation $2000
Gifts $1000 (includes Christmas)
Clothing/Shoes/Haircuts - $2920 ($800/adult, $500/child and $320 for haircuts for all of us)
Work Expenses $800 (work boots, pants and tools for my hubby)
Sports & Hobbies $2630 (this is a BIG one. Hubby plays hockey, hunts and golfs, he has a budget for each and I have a little budget for my hobbies of photography and running)
Passes & Classes for the kids - $320 (we choose a zoo pass or science centre pass, and a class or two each year)
Misc - $1100 (this covers if we go over in an area, and will roll over if we are perfectly on budget...)

We spend an excessive amount on groceries and eating out and are really trying to cut that expense wayyyyy back. We meal plan and batch cook, have a garden, eat game meat that my hubby brings home from hunting, but we still seem to spend way too much on food. I'm reading blog posts on MMM and working on it!

We are also contributing weekly to an emergency fund, truck savings fund, new home fund (we are hoping to eventually move to an older neighbourhood so our kids can walk to school instead of taking an hour bus ride), and an investment savings account. I'm doing a lot of reading about investing and hope to start investing soon beyond what we are already doing in our work plans and the kids' RESP.

Whew! There is our life story!

Yearly Breakdown

Net Income: 31,200 (me)+ 57,200 (hubby) + 2400 (govt child tax credit) = 90,800
Mortgage Payments: $19,084
Monthly Bills: $13,116 (room to cut in here for sure)
Groceries/Gas: $16,200 ($1350 a month which is way too much, working on reducing that)
Planned Spending Account: $15,600 (outlined above...any extra rolls over into next year or additional savings)
RESP Contributions: $2400 (all of the child tax credit money goes here)
Emergency Fund Contributions: $3640 (too low!)
Childcare: $12 000 (when I go back to work 3 days a week in December when my mat leave is over)
New Home Fund Contributions: $3640
Investment savings - $1200 (too low!)
Leftover: $3920

We know we need to cut costs, build up a better emergency fund, and invest more! Would love suggestions or encouragement from your own success stories!



« Last Edit: September 05, 2013, 10:03:24 PM by homemadelatte »

KMMK

  • Handlebar Stache
  • *****
  • Posts: 1472
  • Age: 42
  • Location: Edmonton, AB, Canada
    • Meena Kestirke Insurance
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #6 on: September 06, 2013, 05:56:43 AM »
Looks like you have a really good handle on where your money is going, which is the most important thing. I don't really have many additional comments. Most of your bills seem reasonable for the area; you already know food is high (we'll never get our food costs as low as our American neighbours, but do what you can).

Could you decrease clothes/haircut expenses? Can you deduct your husband's work clothes? I've never looked into that one, but some work stuff is tax deductible.

You mention moving. I don't know how the market is there, but if you could get into a cheaper house with a smaller mortgage sooner rather than later... I know that price isn't unreasonable, but it feels like a monkey on your back to me.

But, yeah, just keep doing what you're doing. Every payment towards that mortgage and every bit of investing helps. Do you track your net worth? Seeing that line go up at least reminds you you're making progress.

Mega

  • Stubble
  • **
  • Posts: 176
  • Location: Burlington, Ontario
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #7 on: September 06, 2013, 06:37:06 AM »
Will discuss more when not at work, but definitely look into the universal mens grooming device:

http://www.mrmoneymustache.com/2011/05/30/get-rich-with-the-universal-mens-grooming-device/

After two hair cuts the device has already paid for itself.

homemadelatte

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #8 on: September 06, 2013, 07:53:33 AM »
Will discuss more when not at work, but definitely look into the universal mens grooming device:

http://www.mrmoneymustache.com/2011/05/30/get-rich-with-the-universal-mens-grooming-device/

After two hair cuts the device has already paid for itself.

My hubby shaves his head himself, hair cuts are for me and the kids :) I could try and cut their hair on my own, but I'm not willing to do mine yet! I am trying to go longer between cuts, and considering trying someone cheaper which could reduce that budget a bit.

homemadelatte

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #9 on: September 06, 2013, 08:01:19 AM »
Looks like you have a really good handle on where your money is going, which is the most important thing. I don't really have many additional comments. Most of your bills seem reasonable for the area; you already know food is high (we'll never get our food costs as low as our American neighbours, but do what you can).

Could you decrease clothes/haircut expenses? Can you deduct your husband's work clothes? I've never looked into that one, but some work stuff is tax deductible.

You mention moving. I don't know how the market is there, but if you could get into a cheaper house with a smaller mortgage sooner rather than later... I know that price isn't unreasonable, but it feels like a monkey on your back to me.

But, yeah, just keep doing what you're doing. Every payment towards that mortgage and every bit of investing helps. Do you track your net worth? Seeing that line go up at least reminds you you're making progress.

We've tried to deduct his work clothing and tools, but the deduction that is there only works if you make a lower income (according to the accountant we used a few years back - I'll look into it again).

The market where we live is pretty good. It would be relatively easy to sell our house and move into a smaller house in an older neighbourhood and we hope to make a lateral move and keep within the same price as what we sell for. My in-laws are realtors and are currently on the lookout for us, and we don't have to pay any fees when we use them. Moving to an older neighbourhood would cut costs for us in a few ways:

- walking distance to library, groceries, parks etc rather than driving everywhere
- kids can walk to school
- childcare is cheaper

I need to start tracking my net worth. That is a great idea to help us see our progress over time.

Thank you Kestra :)


Mega

  • Stubble
  • **
  • Posts: 176
  • Location: Burlington, Ontario
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #10 on: September 06, 2013, 08:29:32 PM »
Should we even be considering a used $25,000 truck at our income level? Should we just buy another under $10,000 vehicle and pay cash?

1 - Regarding the truck, based on your situation (bringing home game meat, from back road trails), it makes sense to buy a truck. But buy the least expensive vehicle that will meet your needs. At a minimum it sounds like you need an extended cab for family transport. For example, this used 2005 Toyota Tundra with 137,000 km for $13,000: http://wwwa.autotrader.ca/a/Toyota/Tundra/CALGARY/Alberta/5_14885184_20110517083658496/?showcpo=ShowCPO

You should still be able to get another 150,000 km out of it.

Compare that to this 2008 with 76,000 km for $23,000:
http://wwwa.autotrader.ca/a/Toyota/Tundra/CALGARY/Alberta/5_17559561_20130514144445574/?ursrc=pl&urp=1&urm=4&showcpo=ShowCPO

You would be paying an extra $10,000 for a 3 year newer, and 60,000 km lower mileage vehicle. Even if you dont drive it at all for those three years, you will suffer depreciation of around $3,333 per year. (look at the wide variance of mileage on the 2004 - 2006 models that have similar prices).

2 - About financing your car. I forget who said it here on the forums, but as long as you have a mortgage, you are effectively financing every purchase you make at your mortgage interest rate. That said, financing for used cars is substantially higher than the '0%' rate offered on new cars (They raise the price to accommodate the 0%). Used care financing costs the dealership money, and they charge a high % for it.

We pay our mortgage weekly $367/week at 2.89% - we've considered increasing the payment, but as a previous poster mentioned, it may make more sense to invest this money to earn a higher rate of return?

There is a huge difference between Canadian mortgages & US mortgages. In the US, you can lock in the interest rate for 30 years. In Canada, you can lock in for up to 10 years (currently around 4.8%), but the most common period is 5 year fixed. This means Canadian mortgages are considered adjustable rate mortgages. I could go on for a page discussing the finer points of risks and benefits of each system, but what is boils down to is:
1 - The American DOES NOT CARE if mortgage interest rates return to 7% in 5 years. He would still be paying their locked in rate of ~3.5%.
2 - The Canadian is completely fucked if mortgage interest rates return to 7% in 5 years. Your mortgage payment would jump to $572 per week, and increase of $205 per week. (or so, without knowing the specifics of your amortization period etc). Do you have an extra $10,000, after tax, available per year?

And yes, 7% is considered a normal mortgage interest rate. I am 30 as well, and have never seen those rates either. As you may know, in the early 90s it was ~12% (payment of ~$862), and in the 80s it hit a high over 20% (payment of ~$1367).

These rates are obviously apocalyptic for the current Canadian mortgage market, but it pays to keep them in mind given these rates are still within the amortization period of your mortgage. I doubt the government would ever let interest rates get that high given the current indebtedness.

We tried to meet with a financial advisor in the last year to get advice, but were kind of turned away because we didn't have a significant enough portfolio for them to manage. Any idea where to find someone in Calgary to bounce ideas off of that doesn't care that we aren't rich? :)

In my experience, financial advisors are not worth the money. They will just sell you the highest fee mutual funds they can find. Get a self directed RRSP / TFSA, and buy low fee exchange traded funds (ETFs). This website is actually a very good resource for plain language investing advice. It has finally convinced me to stop trading in most individual stocks.

This is the right place to bounce ideas off of people. Everyone is very friendly here.

We both set up automatic contributions to retirement plans at our places of work when we started there 6 years ago. I contribute 6% of my net income and that is matched by my employer into a Defined Contribution Pension Plan. I had really no idea what funds to pick when I opened it, so I chose a fairly high-risk mix of canadian equity, us equity and international equity with some cash and fixed income investments as well. It's been losing some money over the past few years, but I have about $27,000 in there. When I am working, I am contributing about $3800 a year into the plan, and then my employer matches it for a total of $7600.

The funds in your DCPP have been making money. It is just that all of that profit has been taken (in my opinion stolen) by the fund managers. Canadian mutual funds are a massive scam. The have expense fees in the 2% range, compared to the 0.09% for the Vanguard S&P 500 ETF. See if there are any ETFs available to pick in the pension plan, if not... see if there is anyway you can convert to a self directed RRSP.

If you had just matched the market, you should be up by at least $7600 (stocks doubled from the 2008/2009 low). I am assuming you made a contribution in that year.

My husband has a Registered Pension plan and Structured RRSP through his work (no matching unfortunately) and contributes about $6000 a year into that. He currently has about $24,000 in his plan with a similar high risk investment mix.

Please, for the love of all that is holy, get a self directed RRSP. Not to harp on the point, but the risk in high risk funds is you wont have any money for retirement because they took all the profit.

I made this mistake, based on my financial advisor's recommendation. Put in 10k. Went down to 9.1K. Went up to $10,010 and I requested to transfer the funds to my self directed RRSP. FA said the fund it up 10% this year! The money was with him for 3 years, and all I got was $10.

Now my money is in Qtrade. They are a reasonably good online brokerage (rated #1 for like six years, but lost this year to a lower fee online brokerage).

Our plan to stay debt-free means that we will only pay cash for items we want to buy, and we will save up for larger purchases and projects. We are also putting the $100/month Child Tax Credit into a Family RESP at our bank for our two small children so we don't go into debt when they go to university.

Two comments here:
1 - The RESP 'investment' funds are usually the exact same funds that you can pick from in your DCPP. How well are they performing for you. Get a self-directed RESP!
2 - There is no such thing a retirement aid. But there is student aid. Fund your retirement first, by maxing out your RRSP and your TFSA.

And speaking of the TFSA, if you have maxed your RRSP contribution, get a self directed TFSA investment account, and max that. Overall, the benefits of the TFSA exactly match the benefits of the RRSP (I did the math).

Let me know if you want guidance on your monthly expenses.

You actually inspired me to think about lowering our insurance coverage, because $100 / month is a shitload of money. We pay something like $108 for $1m coverage. After looking at our actual expenses, my wife could cover our expenses with an additional ~$400,000 invested in a high yield REIT, such as Senior Housing SNH, currently yielding a 7% dividend.





Self-employed-swami

  • Handlebar Stache
  • *****
  • Posts: 1094
  • Location: Canada
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #11 on: September 06, 2013, 11:01:27 PM »
Should we even be considering a used $25,000 truck at our income level? Should we just buy another under $10,000 vehicle and pay cash?

1 - Regarding the truck, based on your situation (bringing home game meat, from back road trails), it makes sense to buy a truck. But buy the least expensive vehicle that will meet your needs. At a minimum it sounds like you need an extended cab for family transport. For example, this used 2005 Toyota Tundra with 137,000 km for $13,000: http://wwwa.autotrader.ca/a/Toyota/Tundra/CALGARY/Alberta/5_14885184_20110517083658496/?showcpo=ShowCPO

You should still be able to get another 150,000 km out of it.

This.  I have owned both a 2005 and a 2006 Tundra, and I would recommend either year.  2007-2012 are the new body style, are larger, and get shittier gas milage, for not much added utility.

My old Tundra, a 2006, had ~215,000km on it when it got an upside down booboo, and my 'new' one is the 2005.  It had 215,000km on it when I bought it in April, for $11,000.  Its a kick-ass truck, and I'll beat the hell out of it for another 100,000+km of work driving (I work on the rigs).

There aren't too many good 2005/06 Tundras for sale at a time in Calgary, but keep your eyes open, and be prepared to pounce when you see a good one.  My Dad has worked for Toyota for 30 years, and he's loved his 2006 Tundra since it was new.  He tows with it as well, and has never had any issues. 

If you buy one at around 150,000km though, make sure the timing belts have been done, or negotiate accordingly (that's the first major, manufactorer-recommended maintenance for those trucks).


Self-employed-swami

  • Handlebar Stache
  • *****
  • Posts: 1094
  • Location: Canada
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #12 on: September 06, 2013, 11:12:45 PM »
« Last Edit: September 06, 2013, 11:17:36 PM by Self-employed-swami »

Mega

  • Stubble
  • **
  • Posts: 176
  • Location: Burlington, Ontario
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #13 on: September 07, 2013, 07:47:10 AM »

This might be a smoking deal:
http://calgary.kijiji.ca/c-cars-vehicles-cars-trucks-2004-Toyota-Tundra-Pickup-Truck-W0QQAdIdZ515424778

Just be sure to ask where this was parked on June 20th...  It actually seems a little too good to be true...

http://auto.howstuffworks.com/under-the-hood/salvage-used-junkyard-parts/10-ways-to-spot-flood-damaged-car.htm

Look at the background of the pictures of the truck. There are a bunch of cars parked in a grass field. Very suspicious when the truck is "for sale by owner".

Edit : and the guy is selling two other trucks. Definitely a curbsider.
« Last Edit: September 07, 2013, 07:49:21 AM by Mega »

Self-employed-swami

  • Handlebar Stache
  • *****
  • Posts: 1094
  • Location: Canada
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #14 on: September 07, 2013, 08:08:53 AM »

This might be a smoking deal:
http://calgary.kijiji.ca/c-cars-vehicles-cars-trucks-2004-Toyota-Tundra-Pickup-Truck-W0QQAdIdZ515424778

Just be sure to ask where this was parked on June 20th...  It actually seems a little too good to be true...

http://auto.howstuffworks.com/under-the-hood/salvage-used-junkyard-parts/10-ways-to-spot-flood-damaged-car.htm

Look at the background of the pictures of the truck. There are a bunch of cars parked in a grass field. Very suspicious when the truck is "for sale by owner".

Edit : and the guy is selling two other trucks. Definitely a curbsider.

I wouldn't worry about him being a curbsider or not, but that looks like it might be the rodeo grounds, which is where they towed all the flooded vehicles in town, when they started to clean up.  That's why I'd call, but inquire as to where it was on June 20th.  I'd say it's still worth a call, at least to find out.

One of the mechanics my Dad works with, buys vehicles that are selling too cheaply (or need some repairs he can do for cheap) and then resells them on his own time (think vehicle flipper).  I wouldn't have a single issue purchasing a vehicle from him, and sometimes he has 2 for sale at the same time.  Isn't necessarily a bad thing.

However, do make sure you talk to registries, to get the 'status' of any car you think might have been flooded.  If it was written off through insurance for flood damage, it will be non-registerable, with a status of 'flooded'.

EDIT: I just looked again, and that isn't the rodeo grounds, it just looks like a farm.
« Last Edit: September 07, 2013, 08:14:06 AM by Self-employed-swami »

sleepyguy

  • Pencil Stache
  • ****
  • Posts: 671
  • Location: Oakville, Ontario
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #15 on: September 07, 2013, 11:26:59 AM »
No, just go read up on http://canadiancouchpotato.com/model-portfolios/

You want lowest fees as possible... read Millionaire Teacher... it is a great book that pretty much has everything a Canadian needs to know about building wealth on a modest income.

You are a bit too invested in property but as a Canadian as well I know being in housing will eat up majority of income, we carry a 330k mortgage (house + condo).  Accelerate payments and put down and allowable extra cash to get the mortgage down.

Gerard

  • Handlebar Stache
  • *****
  • Posts: 1400
  • Location: eastern canada
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #16 on: September 07, 2013, 06:59:18 PM »
Random comments:
* Does your calculation of the child care you're going to pay include the tax refund you'll get when you claim it as a deduction?
* I don't know much about the value/price of your house ('cause I don't understand Calgary!), but you're spending quite a bit on housey other stuff (e.g., heat/electric/water). So a smaller or more efficient house would not only save you on mortgage interest, but also on those other housing costs, I hope.
* I would consider keeping your saving-up-to-pay-expenses money in a TFSA; the small interest you'd earn would be tax-free, banks seem to compete harder for TFSA business and thus offer slightly higher rates, and even though you lose the TFSA headroom when you take the money back out, you get it back again the next year.
* Based on your numbers, I would be more concerned with lowering your expenses and less with shopping for investments. Your savings aren't that large, but your discretionary spending is.

sleepyguy

  • Pencil Stache
  • ****
  • Posts: 671
  • Location: Oakville, Ontario
Re: Advice for newly debt-free 30 year olds? (Canadian)
« Reply #17 on: September 07, 2013, 07:38:42 PM »
Canada didn't have pretty much any fall in real estate as the US did.  It was just a bigt stagnant for a few months.  Calgary, Vancouver and Toronto are still super expensive.  Being a home owner in these cities is pretty much getting a house for $500k+, Vancouver is in the $800k+

Random comments:
* Does your calculation of the child care you're going to pay include the tax refund you'll get when you claim it as a deduction?
* I don't know much about the value/price of your house ('cause I don't understand Calgary!), but you're spending quite a bit on housey other stuff (e.g., heat/electric/water). So a smaller or more efficient house would not only save you on mortgage interest, but also on those other housing costs, I hope.
* I would consider keeping your saving-up-to-pay-expenses money in a TFSA; the small interest you'd earn would be tax-free, banks seem to compete harder for TFSA business and thus offer slightly higher rates, and even though you lose the TFSA headroom when you take the money back out, you get it back again the next year.
* Based on your numbers, I would be more concerned with lowering your expenses and less with shopping for investments. Your savings aren't that large, but your discretionary spending is.