Author Topic: 2-year follow up, thank you to the community, and next steps?  (Read 5051 times)

Cecil

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2-year follow up, thank you to the community, and next steps?
« on: February 23, 2015, 09:54:39 PM »
I posted this thread two years ago, asking for advice: http://forum.mrmoneymustache.com/ask-a-mustachian/doing-well-but-i-feel-like-lots-of-room-for-improvement-advice/msg61376/#msg61376

I got some excellent advice from a few of you back then, and after implementing most of the suggestions my wife and I managed to:
* Take our savings rate from 40% to 70%.
* Cut expenses from $4200 to $3200/month.
* Thanks to excellent stock market years in 2013 and 2014, grow our investment portfolio from $138k to $364k (an increase of more than our combined net income over that period!)

So, in that vein, I thought I'd make another post and see if I can squeeze any more awesome advice out of all you awesome folks! :)

Wife and I are 30 and live in Vancouver, Canada. We want kids in the not-too-distant future, and the goal is FIRE somewhere between 35 and 40.

Current balance sheet:

My RRSP: $152k
Her RRSP: $38k
My TFSA: $72k
Her TFSA: $50k
Taxable investments: $52k

Condo worth $240k with a $151k mortgage.

Net worth: $453k, with $364k liquid. Investments are 20% Canadian equity, 50% US equity, 15% international, and 15% Canadian bonds.

Income: $9000/month

Expenses: $3200/month

$1200 Mortgage + Condo fee + Property Tax (@ 2.05%. Interest is $270, principal $660).
$480 Groceries. We shop around, only buy on sale, stock up in bulk. Would love tips on how to get this down (Canadian prices suck)
$130 Eating out. We usually go out once a week or so, and we're also poly so we frequently do the dinner date thing with other partners. We generally don't order appys or drinks.
$50 Alcohol. That's on top of groceries and eating out. We make our own wine for $3/bottle and mostly drink that, as well as some spirits.
$40 Clothing.
$120 Household and general purchases. Includes a laptop, furniture, walmart trips, random household things like cleaning supplies and shelving.
$130 Entertainment. Movies, ski trips, games, clubs.
$175 Gas. She drives to work, we have a paid-off 2006 Suzuki.
$150 Car repairs.
$85 Transit. I take the bus.
$130 Insurance - car (liability only) + condo.
$120 Phones. Cheapest data plan we can get, at a grandfathered rate. I'm unwilling to give up data.
$40 Home internet. Cheapest plan, and I called them and got a reduced "loyalty" rate.
$100 Gifts + donations.
$50 Electricity. This includes heat because we use all-electric heating.
$220 Travel. We spend about $2500k/yr on a few long weekends here or there, skiing, and usually a week with friends somewhere a day's drive away.


humblefi

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #1 on: February 23, 2015, 11:20:23 PM »
Quote
Wife and I are 30 and live in Vancouver, Canada. We want kids in the not-too-distant future, and the goal is FIRE somewhere between 35 and 40.

Congrats on a solid foundation. My thoughts were that the question could help a bit more focus. So, if you do not mind, I will ask some questions in return.
Imagine you are 40 years old. Apart from a couple of kids say, dow do you see your life? what goals do you want to have achieved by then?

Here are some questions I can think of...
+ What are the dollar values for those goals?
+ What about life insurance plans? Young kids and FI....
+ What about health insurance? Health care covered in Canada?
+ What kind of cars do you like with kids coming?
+ What about day care costs?
+ What about college funds, like 529 in the US?
+ How much income do you expect to see at age 40?
+ Will your condo be enough with two kids?
+ Do you need a house in a good school district?
+ .....

Hope that helps. Best of luck for a successful FI!


skinnyindy

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #2 on: February 24, 2015, 07:22:15 AM »
What is poly?

Mr. Green

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #3 on: February 24, 2015, 07:58:12 AM »
What is poly?
Multiple relationships, usually of a sexual nature. In his specific case, extramarital relationships. "Poly" is short for the actual term, which is polyamorous.

Cecil

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #4 on: February 24, 2015, 10:40:16 AM »
Quote
Wife and I are 30 and live in Vancouver, Canada. We want kids in the not-too-distant future, and the goal is FIRE somewhere between 35 and 40.

Congrats on a solid foundation. My thoughts were that the question could help a bit more focus. So, if you do not mind, I will ask some questions in return.
Imagine you are 40 years old. Apart from a couple of kids say, dow do you see your life? what goals do you want to have achieved by then?

Here are some questions I can think of...
+ What are the dollar values for those goals?
+ What about life insurance plans? Young kids and FI....
+ What about health insurance? Health care covered in Canada?
+ What kind of cars do you like with kids coming?
+ What about day care costs?
+ What about college funds, like 529 in the US?
+ How much income do you expect to see at age 40?
+ Will your condo be enough with two kids?
+ Do you need a house in a good school district?
+ .....

Hope that helps. Best of luck for a successful FI!

Good questions!

I am thinking $800k-$1m is around the right amount where we could consider transitioning to part-time work, or semi-retirement. We would both find ways to earn money without the commitment of 5 days/week.

Life insurance seems unnecessary. Once we have kids, we'll have more than enough set aside to provide for them even if one or both of us were to die.

Health care is perhaps a hundred a month. I'm not sure as my employer pays it now, but it's generally paid for via taxes.

Something small and fuel-efficient still. I don't forsee the need for a van or anything massive.

Day care is definitely a consideration. I'm not sure what our life will look like in a few years, but if we do need daycare the savings rate would drop temporarily of course.

We have an RESP plan here where the government matches 20% of your investments. I am figuring $100-$200/month per kid should be sufficient - university costs here are much less than in the States.

$30k from investments would be more than enough I think - supplemented by occasional side work.

No, we will need more space - that's the big question mark right now. I don't know what housing arrangements will look like.

Not really - my wife is a teacher and I'm huge on self-education, so I'm pretty convinced that my kids will get a good education no matter what.

Cecil

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #5 on: February 24, 2015, 10:41:17 AM »
What is poly?
Multiple relationships, usually of a sexual nature. In his specific case, extramarital relationships. "Poly" is short for the actual term, which is polyamorous.

Yeah, close. I just mean we have other romantic relationships beyond just the two of us. Dating can get expensive!

Mr. Green

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #6 on: February 24, 2015, 02:16:51 PM »
What is poly?
Multiple relationships, usually of a sexual nature. In his specific case, extramarital relationships. "Poly" is short for the actual term, which is polyamorous.

Yeah, close. I just mean we have other romantic relationships beyond just the two of us. Dating can get expensive!
My sister is poly. Still hard for me to wrap my mind around it! :)

boarder42

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #7 on: February 24, 2015, 02:24:37 PM »
i dont see why you spend 500 a year on clothing.  that seems incredibly high.

Cecil

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #8 on: February 24, 2015, 05:50:01 PM »
i dont see why you spend 500 a year on clothing.  that seems incredibly high.

Hmm... good point, now that you mention it. I'm not exactly sure either. That is combined between my wife and I (probably 80% her). I'll dig into that a bit more.

wordnerd

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #9 on: February 24, 2015, 05:52:59 PM »
Is Republic Wireless an option for you to reduce your cell phone bills?

The groceries do seem high, but I don't have any Canada-specific tips. One thing we did, however, was starting home-making version of things we eat a lot. For example, we both eat cereal every morning, so my H starting making granola with ingredients from Costco, lowering the cost and increasing the deliciousness. I see you already make your own wine, which is awesome. A note on Costco (don't know if you have them in your area): you can shop there without a membership if you have a gift card, so if you want to try it out or only stock up very occasionally, having a friend with a membership buy you a nominal gift card (that you pay for obviously) can get you through the door.

You could also look at Groupon for dates/entertainment/restaurants. It can keep you falling into the doing the same things all the time too.

DavidAnnArbor

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #10 on: February 24, 2015, 09:22:01 PM »
I think you're doing everything pretty well, saving a lot of money each month. Just enjoy your life, and if you can finetune some savings that's all well and good. You're probably not really going to retire when you're 40, but instead transition to work that is more interesting for you to do even if it doesn't pay as well, and you'll be able to afford to. Just having conversations with your wife about where to save money makes the most sense. Having children can be very expensive, so you'll obviously apply your skills of frugality to child raising.

backyardfeast

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #11 on: February 24, 2015, 11:03:47 PM »
No suggestions; you're doing awesome!  And in such an expensive place!

My only questions to think about and add to the list are: do you plan to stay in Vancouver once you retire?  We basically figure that we will get to a place financially where our savings will cover our living expenses with a paid-off house, then we'll move somewhere cheaper to pay off the house. :) 

MSP premiums just went up to $130/mo, and they are set to go up again in April I think?  They will keep going up, so something to factor in to the future budget.  But as you say, not make or break.

Again, when we think about our retirement budget, I think about what we want to spend our time doing.  For us, it's a pretty simple life (garden, sailboat, etc), so things like the clothing and fuel budgets will go down.  If you want to be in a house, don't forget to add a home maintenance budget, as that will be covered by your strata fees at the moment.

Gerard

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Re: 2-year follow up, thank you to the community, and next steps?
« Reply #12 on: February 25, 2015, 01:17:12 PM »
The only Canadian big-city grocery advice I have is "big Asian supermarkets". Stunning price differences compared to Anglo chains, especially if you tweak your diet to include more legumes, grains, vegetables, spices, and cheap cuts of meat. You may have to head out to the suburbs (Richmond or Surrey) once every couple of months to stock up.