Author Topic: Canadian Couple years in - Are we doing this right?  (Read 1001 times)

Le North Dreamer

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Canadian Couple years in - Are we doing this right?
« on: September 21, 2020, 10:36:46 AM »
    Hi Everyone,

    Long time reader, shy poster, have been following the financials closely for years (it is quite enjoyable to follow the evolution of the NW year after year). SO and I are now quite at the middle point of the ladder towards FIRE and looking for ideas, challenges, face punches (if required), anything that can help us achieve our FI goals faster while taking into account our current and upcoming situation.

Life Situation: I'm 32 living in sin with my 31 SO up north in Canada. My SO is currently expecting and is due in March of next year (firstborn).

Goals:
- Explore ways to cut back expenses and achieve FIRE as quickly as possible;
- Find ways to mitigate the salary shortcoming and additional expenses related to having a baby;
- Understand how Canadian tax will affect the FIRE drawdowns - how much additional capital should we have to cover taxes.

Gross Income:
- I'm making 125k per year with an expected bonus of 15% (19k);
- SO is making 125k per year with variable bonuses (non expected this year because of covid);
- 14k per year from rentals.

SO's income will go down quite a bit next year as she'll be on mat leave. (-40k, but wer are hoping to reduce impacts by cutting the budget).

Both SO and I are feeling a bit burned out from the work environment some times and would definitely appreciate any ways we can attain FIRE as quickly as possible.

Total: 283K gross income

Taxes:
Canadian federal and provincial taxes amount to around 90k per year. 

Current annual expenses as budgeted:
- Mortgages
  • $13,200 for rental/main home ($1,100 monthly payments, $850 capital, 250$ interest) - we typically live there full time in the biggest unit, but have been living at the farmhouse during covid);
  • $18,600 for farm ($1550 monthly payments,$1,250 towards capital, $300 interest);
- Property taxes: $7,500
- farmhouse repairs: 1,000$ (UPDATED)
- Insurance (car, houses): $5,000
- Rental services (snow removal, grass, repairs): $2,000 (partially offset through taxes)
- Gas/electric (both houses): $3,200
- Internet (both houses): $2,000
- Life insurance: $440
- Groceries: $6,240, or $120 weekly (we keep going over this one)
- Restaurants $10,000, or 200$ weekly (This may come as a lot as we eat out over lunch a lot, and has been near zero in the last couple of months. Planning to take this down a lot in the coming years)
- Cars (2 fully owned no debts, 2010 pickup and 2015 Volks)
  • Repairs: $2,000
  • Gas: $5,200 or $100 weekly (we're far from there these days, but our 2 properties are seprated by a 2.5h drive so it takes some)
  • Plates: $500
- Professional titles maintenance: $7,500 (I could let go of one to save more than half of that, but keep it as a backup for now)
- SO hobbies (horses): $10,000 (yes, this is a lot but I don't think its negotiable, altough we had her horse at the farm over the summer so this year will be lower)
- Own hobbies (sports and hunting): $2,500
- Vacation: $4,000 (flat or nearly flat this year and next year as the firsborn is coming)
- Clothing and personal care: $6,000 (another one that is quite flat this year)

Total budgeted expenses (typical non-covid situation): 106k (yikes. 2020 will be lower for sure, but still)
Total without mortgages: 74k

Yearly savings:
Around 90k with current budget, more likely to be 105-110k this year.

Expected ER expenses:

Cutting off a lot of items from the budget and planning to be mortgage free by this time, our planned ER yearly expenses would amount to 50k (w/o mortgage).

Our plan would be to RE on our farm property while (a) keeping the rental (and fully rent it for a total of 26K yearly revenues) or (b) selling the rental and investing the proceeds in the stock market. We would be doing some hobby farming and raising our kids in the nature. Right now, this makes for a more expensive lifestyle as we have to maintain 2 houses (although we are putting minimal care in our old farm house).

We bought the farm 3 years ago as it was our dream spot and checked all the boxes. We are carrying a 115k mortgage that should be fully paid off by the time we FIRE (7 years left on the mortgage, we will most likely put down additional capital to pay it off earlier). The value is tied to the land more than the house (it is only worth 10k on the deed of sale). We are considering building a new house on the farm property to replace the current old/cold/undesirable house, so an additional mortgage could be set up once the current one on the farm is paid off (this would be an additional 12k expense yearly), or we could build up more capital before RE.

Assets (keep in mind the canadian flavor here):
-RRSPs: 107k
-TSFAs: 6k
-Taxable: 3k
-Pensions current value: 155k
-Checking: 5k (covers typicall expenses)
-Rental: 334k
-Farm: 285k (excludes the old house value, this would be for the land and barn only)
-Cars and farm equipment (we can dispose of a good part of it is plans change): 35k

Total assets: 930k

Liabilities:
- Mortgages
  • Rental: 198k, 20 years left, 1.5% variable 5 years
  • Farm: 115k, 7 years left, 2.9% fixed for 2 years
-Student loans: 13k, 0% until interest rates rise, payment planned stopped for now
-We pay our credit card in full each month so not a liability.

Total liabilities: 326k

Specific Question(s):

1) Expenses are definitely on this high end of the spectrum. Any ideas on how to cut back? I have in mind targeting food (groceries and restaurants) and hobbies. As we are currently high earners, we don't see the impact of small expense reductions and are having a harder time actually cutting back.

2) Mustachians with kids, please provide any feedback as to how much it costs to raise kids in our ways. Everyone around me at work says it's going to cost me an arm, but I'm not planning to let it happen! Also, how have you dealt with the lower income?

3) I calculate our nest egg by including the rental equity and farmland equity as both are/can be put to work and produce somewhere between 4 to 7% return yearly with minimal efforts. As such, it would amount to 569k. Does this make sense?

4) A SWR of 4% would mean that we should target a $1,250,00 stash. How would you deal with:
  • Canadian taxes: By then, our income will come from a mix of taxable RRSPs drawdowns, taxable, TFSA, rental income, etc. How should I account for tax in this? Should I add a % to the total expenses to account for it?
  • Additional mortgage: I would most likely be better off building a good portion of the required capital (200k ish) before calling it quit and FIRE, right? I'm planning to build the house as much as possible by myself to reduce costs
  • Asset allocation: A lot of our capital is tied to the rental and farm. Would we be better off selling the rental and investing the equity in the stock market?

Any insights tips or advice would be greatly appreciated. Do not hesitate to put into question anything in there, I'm fully open to suggestions that go beyond my set of questions!

Thank you very much[/list]
« Last Edit: September 21, 2020, 05:59:57 PM by LawMustache »

FlytilFIRE

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Re: Canadian Couple years in - Are we doing this right?
« Reply #1 on: September 21, 2020, 02:08:13 PM »
You and your SO Have done a great job so far! You'll get lots of answers, but let me ask a few questions.

You've got a 20 year loan on the rental, and it's an ARM. Great rate for now, but can you lock in to a low rate? Markets are funky these days.

Do you anticipate ANY possibility of utilizing the professional license you're considering dropping? If so, I'd hesitate dropping, especially if you can write it off on your taxes.

Any way yo might board someone's horse(s) with yours? Reduces the costs of owning.

Have yo looked at your insurance needs? Your costs seem low, considering you've got kids on the way. May want to look into that.

Ever hear of the Tightwad Gazette? Came out years ago, and very relevant dealing with raising kids. There are three volumes, but I've seen it as one.

You imply the farmhouse is old, but there's no budget for repairs/renovations. Are you handy? Can you do some of the work yourself? With SO home, I would anticipate your restaurant budget to go down (or hope it would!). Do you cook at home often?

Good luck!

economista

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Re: Canadian Couple years in - Are we doing this right?
« Reply #2 on: September 21, 2020, 02:16:16 PM »
Replying specifically to your question about raising kids - it can be expensive but it doesn't have to be. We have a daughter that will turn 1 in a little over a week and we are expecting our next daughter in January. For this first year, we've gotten almost all of our daughter's clothes for free. We have a friend with a daughter 9 months older than ours, which has been the perfect gap for getting hand-me-down clothes and shoes. Some of the seasons haven't quite lined up right so we've needed more than just the hand me downs, but on those occasions I've either gotten them from our neighborhood buy nothing group or from a second hand children's store called Once Upon a Child.

When it comes to feeding and diapers, we've lucked out that our daughter exclusively breast fed for 11 months, so we've only bought one container of formula. If your wife isn't able to nurse you will have to use formula (or you might need it for supplementing throughout) but it can be cheap or expensive too. There is REALLY expensive formula that would costs you hundreds of dollars per month, or there is much more reasonable formula. All brands of formula have to meet strict nutritional guidelines, so I didn't worry myself too much about it. Costco has the Kirkland brand formula for $19 here (do you have those in Canada?), and one container of it has lasted her for the month that she needed it. There are also REALLY pricey diapers you can buy whether going disposable or cloth. We started out 100% disposable and always bought the cheapest store brand and never had any problems. We've switched to doing around 50% cloth and 50% disposable (still using them for naps and nights) but we got all of our cloth diapering supplies from the buy nothing group. We only bought a diaper sprayer and splash guard, which came to around $50 on amazon.

For toys, we haven't bought anything new. There are always people giving things away on the buy nothing group, and a few times we decided that we wanted to buy something for her and when we asked first on the buy nothing group, someone gave it to us instead. We have bought a few second hand toys that we came across while at Once Upon a Child, but each time it was under $10 (instead of $50+ when I looked them up on Amazon later!).

We got her crib as a gift from my father and it was $200 at Target, but for our second child a friend gave us the crib his daughter had grown out of. They had bought it the year before brand new and when I picked it up it was the exact same crib we had for my other daughter! So now they have matching cribs. When it comes to car seats, all car seats have to meet the exact same safety standards, so a cheap car seat is just as safe as an expensive one. I've learned that the more expensive the car seat, the more cushions and bells and whistles it has, and generally the smaller the footprint, the pricier the car seat. We started with a bucket seat and then got an all-in-one convertible seat when she grew out of the bucket. These were the most expensive things we bought, at around $100 - $150 each. If you have a Target near you, they often do trade-in events so you can get an old car seat for free from your buy nothing group and then take it Target to get 20% off a new one. We've gotten our strollers off the buy nothing group, except for the one the bucket seat clicked into - that one came with the seat. Things like pack n plays or bassinets are drastically cheaper at re-sale stores like Once Upon a Child. Don't get sucked into thinking you have to buy new!

Everything else a baby needs is relatively cheap. After a full year I think we've spent around $2000 total on the baby, and we've bought a lot of things, including things new, that we really didn't NEED to buy. At our baby shower we got some clothes (of course just in newborn size) a box of diapers, and few blankets. Nothing like friends I know who got fully furnished nurseries and such, but we still haven't spent a whole lot on her. I will add the giant caveat that all of this is assuming your child (*hopefully*) is healthy with normal development. Our daughter has a neurological condition that has resulted in TONS of doctors visits, tests, etc that have been expensive. Plus she is in occupational therapy through early intervention and her therapist is always recommending things to help with her development, so we've bought a lot more of that kind of stuff than a normal child would need.

Le North Dreamer

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Re: Canadian Couple years in - Are we doing this right?
« Reply #3 on: September 21, 2020, 03:34:16 PM »
You and your SO Have done a great job so far! You'll get lots of answers, but let me ask a few questions.
Thanks for the reply and encouragement! The road to FI is certainly filled with ups and downs but clearly rewarding from the start.
You've got a 20 year loan on the rental, and it's an ARM. Great rate for now, but can you lock in to a low rate? Markets are funky these days.
I signed up for the ARM in February for a 5 year term. It is possible to convert it to a fixed rate at any time for the remainder of this 5y terms, but nothing longer. I'm comfortable in keeping it variable as we can easily face higher interest rates (even if unpleasant).
Do you anticipate ANY possibility of utilizing the professional license you're considering dropping? If so, I'd hesitate dropping, especially if you can write it off on your taxes.
I'll most likely keep it for the foreseeable future as I'm not always happy at work and it could end up being a nice plan B. Will for sure drop it once I hit the FIRE date.
Any way yo might board someone's horse(s) with yours? Reduces the costs of owning.
When we decide to go live on the farm permanently or when we are FI, we could for sure do that as we have an extra box stall. For now having the horses at home was a temporary arrangement - we are planning to go back to our rental home in the city for the winter.
Have yo looked at your insurance needs? Your costs seem low, considering you've got kids on the way. May want to look into that.
Yep, our current life insurance is a dirt cheap t10 with a huge coverage (being young and healty helps a lot for that). For the time being, SO and I have quite generous insurance coverage at work (life and invalidity) so the newborn should be well covered. We'll have to figure out what to do once we hit FIRE and determine the needs then - I assume it would be low as we would rely on our savings. In any case, we'll have the option to renew the t10 at expiry (for a higher prime, of course) and if SO or I quit our job, one of us can be insured under the other's work insurance.
Ever hear of the Tightwad Gazette? Came out years ago, and very relevant dealing with raising kids. There are three volumes, but I've seen it as one.
Will most certainly look into that, thanks for the suggestion!
You imply the farmhouse is old, but there's no budget for repairs/renovations. Are you handy? Can you do some of the work yourself?
Getting handier month after month and have a super handy dad who helps out a lot for more major items. I have not budgeted for it as we are doing (mostly) everything ourselves (electricity, plumbing, repairs, etc.), but I should make a point in adding something in the budget for unepexcted repairs. I'll update my case study.
With SO home, I would anticipate your restaurant budget to go down (or hope it would!). Do you cook at home often?
We home cook everything these days and are planning to do so over SO's mat leave to reduce costs. We do treat ourselves with non-fancy restaurants here and there but try to keep it to a minimum - the pandemic sure will have helped us ram down the restaurant expenses and hopefully will leave us with better habits on this front!

Thanks a bunch!








Le North Dreamer

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Re: Canadian Couple years in - Are we doing this right?
« Reply #4 on: September 21, 2020, 03:46:38 PM »
Replying specifically to your question about raising kids - it can be expensive but it doesn't have to be. We have a daughter that will turn 1 in a little over a week and we are expecting our next daughter in January. For this first year, we've gotten almost all of our daughter's clothes for free. We have a friend with a daughter 9 months older than ours, which has been the perfect gap for getting hand-me-down clothes and shoes. Some of the seasons haven't quite lined up right so we've needed more than just the hand me downs, but on those occasions I've either gotten them from our neighborhood buy nothing group or from a second hand children's store called Once Upon a Child.

When it comes to feeding and diapers, we've lucked out that our daughter exclusively breast fed for 11 months, so we've only bought one container of formula. If your wife isn't able to nurse you will have to use formula (or you might need it for supplementing throughout) but it can be cheap or expensive too. There is REALLY expensive formula that would costs you hundreds of dollars per month, or there is much more reasonable formula. All brands of formula have to meet strict nutritional guidelines, so I didn't worry myself too much about it. Costco has the Kirkland brand formula for $19 here (do you have those in Canada?), and one container of it has lasted her for the month that she needed it. There are also REALLY pricey diapers you can buy whether going disposable or cloth. We started out 100% disposable and always bought the cheapest store brand and never had any problems. We've switched to doing around 50% cloth and 50% disposable (still using them for naps and nights) but we got all of our cloth diapering supplies from the buy nothing group. We only bought a diaper sprayer and splash guard, which came to around $50 on amazon.

For toys, we haven't bought anything new. There are always people giving things away on the buy nothing group, and a few times we decided that we wanted to buy something for her and when we asked first on the buy nothing group, someone gave it to us instead. We have bought a few second hand toys that we came across while at Once Upon a Child, but each time it was under $10 (instead of $50+ when I looked them up on Amazon later!).

We got her crib as a gift from my father and it was $200 at Target, but for our second child a friend gave us the crib his daughter had grown out of. They had bought it the year before brand new and when I picked it up it was the exact same crib we had for my other daughter! So now they have matching cribs. When it comes to car seats, all car seats have to meet the exact same safety standards, so a cheap car seat is just as safe as an expensive one. I've learned that the more expensive the car seat, the more cushions and bells and whistles it has, and generally the smaller the footprint, the pricier the car seat. We started with a bucket seat and then got an all-in-one convertible seat when she grew out of the bucket. These were the most expensive things we bought, at around $100 - $150 each. If you have a Target near you, they often do trade-in events so you can get an old car seat for free from your buy nothing group and then take it Target to get 20% off a new one. We've gotten our strollers off the buy nothing group, except for the one the bucket seat clicked into - that one came with the seat. Things like pack n plays or bassinets are drastically cheaper at re-sale stores like Once Upon a Child. Don't get sucked into thinking you have to buy new!

Everything else a baby needs is relatively cheap. After a full year I think we've spent around $2000 total on the baby, and we've bought a lot of things, including things new, that we really didn't NEED to buy. At our baby shower we got some clothes (of course just in newborn size) a box of diapers, and few blankets. Nothing like friends I know who got fully furnished nurseries and such, but we still haven't spent a whole lot on her. I will add the giant caveat that all of this is assuming your child (*hopefully*) is healthy with normal development. Our daughter has a neurological condition that has resulted in TONS of doctors visits, tests, etc that have been expensive. Plus she is in occupational therapy through early intervention and her therapist is always recommending things to help with her development, so we've bought a lot more of that kind of stuff than a normal child would need.

Wow, tons of great ideas in there! Thanks a lot economista, I'll look into finding a buy nothing group in my area, you seem to have gotten a whole lot of stuff from there. I do have some friends and distant family who have had kids in the last couple of years, we should be able to get some hand-me-downs. I'm already a "used stuff enthousiast" and was planning to get a lot of stuff on Craigslist and similar websites, especially pack n play(s), bassinet, furniture, etc.

Great tips on the formulae and diapers, I'll have a look at what is available - we haven't decided on the washable vs disposable ones yet...I guess we'll have to give it a try before settling on the right path for us.

Car seats seem to be an area where we'll need to spend a little more - As we have harsh winters and no garage, I want to make sure that the baby in/out of the car process goes smoothly, and I expect to have to pay a bit more as a result. We shall see.

Sorry to hear about the neurologival condition - my SO's cousin is in a similar situation with 2 of her 3 children. Lucky for us, if it happens, free health care is a reallity up here and we should therefore avoid a lot of costs.

I'll start to budget for the little one now ;)

reeshau

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Re: Canadian Couple years in - Are we doing this right?
« Reply #5 on: September 21, 2020, 05:36:30 PM »

3) I calculate our nest egg by including the rental equity and farmland equity as both are/can be put to work and produce somewhere between 4 to 7% return yearly with minimal efforts. As such, it would amount to 569k. Does this make sense?

4) A SWR of 4% would mean that we should target a $1,250,00 stash. How would you deal with:
  • Canadian taxes: By then, our income will come from a mix of taxable RRSPs drawdowns, taxable, TFSA, rental income, etc. How should I account for tax in this? Should I add a % to the total expenses to account for it?
  • Additional mortgage: I would most likely be better off building a good portion of the required capital (200k ish) before calling it quit and FIRE, right? I'm planning to build the house as much as possible by myself to reduce costs
  • Asset allocation: A lot of our capital is tied to the rental and farm. Would we be better off selling the rental and investing the equity in the stock market?


Answers, not exactly in the order you asked them...

An important fact of the 4% rule is that it is a gross amount.  So yes, you should include not only taxes as an expense, but also any mutual fund or financial advisor fees that are coming out of them.

Generally, people do not include their primary residence.  But you say you can use the equity--how would you do that?  If you took out a mortgage to tap equity, then again that cost would need to be counted as an expense.  I am confused, because you mentioned paying off the mortgage, and having a mortgage on the new farmhouse already.

In terms of asset allocation: stocks vs. real estate is a personal choice.  In full disclosure, I prefer the former.  But a single rental 2.5 hours away sounds like a lot of bother for the payoff.  Is there something particular about that location that makes it very desirable?  Or, are you an "accidental landlord," simply because that used to be your primary residence?  If the latter, I would sell it and do something easier.  (even if it was just finding a rental close by)

Le North Dreamer

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Re: Canadian Couple years in - Are we doing this right?
« Reply #6 on: September 21, 2020, 05:55:31 PM »
Answers, not exactly in the order you asked them...

An important fact of the 4% rule is that it is a gross amount.  So yes, you should include not only taxes as an expense, but also any mutual fund or financial advisor fees that are coming out of them.
Thanks, that's what I thought, so I'll add a tax % in the expenses. Other expenses should be fairly low as I'm using online brokerage accounts for most of it.

Generally, people do not include their primary residence.  But you say you can use the equity--how would you do that?  If you took out a mortgage to tap equity, then again that cost would need to be counted as an expense.  I am confused, because you mentioned paying off the mortgage, and having a mortgage on the new farmhouse already.
We bought the rental as a first house and lived there for the last 5 years until covid hit - we temporarily moved to our farmhouse since April but will go back to the rental over the winter.

We bought the farm 3 years ago as it was our dream spot and checked all the boxes. We are carrying a 115k mortgage that should be fully paid off by the time we FIRE (7 years left on the mortgage, we will most likely put down additional capital to pay it off earlier). The value is tied to the land more than the house (it is only worth 10k on the deed of sale). We plan to live at the farm during RE and I'd like to self-construct an energy-efficient house for the future, which will most likely require an new mortgage whenever I decide to do so. In the meantime, the old farm house does the trick, but we'll want to improve at some point. I'll clarify my initial post.

In terms of asset allocation: stocks vs. real estate is a personal choice.  In full disclosure, I prefer the former.  But a single rental 2.5 hours away sounds like a lot of bother for the payoff.  Is there something particular about that location that makes it very desirable?  Or, are you an "accidental landlord," simply because that used to be your primary residence?  If the latter, I would sell it and do something easier.  (even if it was just finding a rental close by)
As mentioned above, it served as our primary residence over the last 5 years. It's quite enjoyable to have tenants pay for your mortgage and a portion of the taxes. It served us well so far. I'm still uncertain about what to do with the rental when we hit FIRE but I'm leaning towards selling it (in 5-7 years when we reach our goals) as it will indeed be far away and require time and management. Would then invest the proceeds of the sale in the stocks market.


reeshau

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Re: Canadian Couple years in - Are we doing this right?
« Reply #7 on: September 21, 2020, 06:54:40 PM »
.

In terms of asset allocation: stocks vs. real estate is a personal choice.  In full disclosure, I prefer the former.  But a single rental 2.5 hours away sounds like a lot of bother for the payoff.  Is there something particular about that location that makes it very desirable?  Or, are you an "accidental landlord," simply because that used to be your primary residence?  If the latter, I would sell it and do something easier.  (even if it was just finding a rental close by)
As mentioned above, it served as our primary residence over the last 5 years. It's quite enjoyable to have tenants pay for your mortgage and a portion of the taxes. It served us well so far. I'm still uncertain about what to do with the rental when we hit FIRE but I'm leaning towards selling it (in 5-7 years when we reach our goals) as it will indeed be far away and require time and management. Would then invest the proceeds of the sale in the stocks market.

It seems you generally have approached things thoughtfully.  But if your renters aren't paying for your mortgage, *all* your taxes, the upkeep / maintenance, and then some, then this is still a cost, not revenue.  Up the rent or sell it.  Check out comparables in the area, and make sure you are charging market rates.

Le North Dreamer

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Re: Canadian Couple years in - Are we doing this right?
« Reply #8 on: September 21, 2020, 07:07:08 PM »
.

In terms of asset allocation: stocks vs. real estate is a personal choice.  In full disclosure, I prefer the former.  But a single rental 2.5 hours away sounds like a lot of bother for the payoff.  Is there something particular about that location that makes it very desirable?  Or, are you an "accidental landlord," simply because that used to be your primary residence?  If the latter, I would sell it and do something easier.  (even if it was just finding a rental close by)
As mentioned above, it served as our primary residence over the last 5 years. It's quite enjoyable to have tenants pay for your mortgage and a portion of the taxes. It served us well so far. I'm still uncertain about what to do with the rental when we hit FIRE but I'm leaning towards selling it (in 5-7 years when we reach our goals) as it will indeed be far away and require time and management. Would then invest the proceeds of the sale in the stocks market.

It seems you generally have approached things thoughtfully.  But if your renters aren't paying for your mortgage, *all* your taxes, the upkeep / maintenance, and then some, then this is still a cost, not revenue.  Up the rent or sell it.  Check out comparables in the area, and make sure you are charging market rates.

All good on this front. While it is not the case currently since we keep a unit for ourselves, if fully rented, the building is profitable after all expenses and repairs. The fun part is that renters already cover more than the mortgage payments and a portion of the taxes for us while we live there. A pretty good arrangement until the time we hit our FIRE target.

Saskatchewstachian

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Re: Canadian Couple years in - Are we doing this right?
« Reply #9 on: September 22, 2020, 07:48:36 AM »

Wow, tons of great ideas in there! Thanks a lot economista, I'll look into finding a buy nothing group in my area, you seem to have gotten a whole lot of stuff from there. I do have some friends and distant family who have had kids in the last couple of years, we should be able to get some hand-me-downs. I'm already a "used stuff enthousiast" and was planning to get a lot of stuff on Craigslist and similar websites, especially pack n play(s), bassinet, furniture, etc.

Great tips on the formulae and diapers, I'll have a look at what is available - we haven't decided on the washable vs disposable ones yet...I guess we'll have to give it a try before settling on the right path for us.

Car seats seem to be an area where we'll need to spend a little more - As we have harsh winters and no garage, I want to make sure that the baby in/out of the car process goes smoothly, and I expect to have to pay a bit more as a result. We shall see.

Sorry to hear about the neurologival condition - my SO's cousin is in a similar situation with 2 of her 3 children. Lucky for us, if it happens, free health care is a reallity up here and we should therefore avoid a lot of costs.

I'll start to budget for the little one now ;)

Comment here from another canuck with Littles. As your mentioned for the car seat, time to install and remove is key when it's very cold out. When they are little this is pretty simple as baby is still in a bucket seat. I would very highly recommend getting two bases for the car seat and leaving one base in each vehicle so they can be easily clipped into either. For us the extra base was an additional $50 I think but it was very nice to not have to unstrap the base from one vehicle and re-strap it into another in the middle of winter.

Now on to the money questions. I am in the almost exact same salary range and very close in age to you so will give recommendations based on my plan. With you high income it makes sense to  contribute to RRSP to bring your taxable income down for me I contribute enough to bring my taxable from ~120 down to the 97K range. For my province that's where the 38.5% income tax bracket kicks in so I get maximum return for every dollar invested. If you both do this you will have some monstrous RRSP's by the time you retire. For the general population this may be an issue as they'd be retiring at 65 at have forced minimum withdrawals at 71. For you though you have many years to draw down your RRSP between your (early?) 40's FIRE date and 71.

Q3 on the house, personally I would have the amount needed to build the house sitting in cash ready for when I FIRE. This would be considered a short time horizon between FIRE and spending your cash and you don't want to risk bad sequence of returns that early into FIRE.

SunnyDays

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Re: Canadian Couple years in - Are we doing this right?
« Reply #10 on: September 22, 2020, 09:57:49 PM »
Can you find someone interested in part boarding the horses right now?  This will reduce their upkeep fees.  Also, does your wife really need more than one horse if she’s the only one riding?

Le North Dreamer

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Re: Canadian Couple years in - Are we doing this right?
« Reply #11 on: September 24, 2020, 06:31:10 AM »
Comment here from another canuck with Littles. As your mentioned for the car seat, time to install and remove is key when it's very cold out. When they are little this is pretty simple as baby is still in a bucket seat. I would very highly recommend getting two bases for the car seat and leaving one base in each vehicle so they can be easily clipped into either. For us the extra base was an additional $50 I think but it was very nice to not have to unstrap the base from one vehicle and re-strap it into another in the middle of winter.

Now on to the money questions. I am in the almost exact same salary range and very close in age to you so will give recommendations based on my plan. With you high income it makes sense to  contribute to RRSP to bring your taxable income down for me I contribute enough to bring my taxable from ~120 down to the 97K range. For my province that's where the 38.5% income tax bracket kicks in so I get maximum return for every dollar invested. If you both do this you will have some monstrous RRSP's by the time you retire. For the general population this may be an issue as they'd be retiring at 65 at have forced minimum withdrawals at 71. For you though you have many years to draw down your RRSP between your (early?) 40's FIRE date and 71.

Q3 on the house, personally I would have the amount needed to build the house sitting in cash ready for when I FIRE. This would be considered a short time horizon between FIRE and spending your cash and you don't want to risk bad sequence of returns that early into FIRE.

Thanks for the tips fellow Canuck, I'll definitely look into car seats with multiple bases.

We are fully maxing out our RRPs every single year but both of us have pensions plans at work that eat a lot of our RRSP contribution room so we are quite limited in the amount we can put in there. Nevetherless, we will now attack the TFSAs front as much as possible and then go into taxable/increase mortgage capital payments.

Fair tip on the house, I believe I would try to have at least 50-75% of the total amount saved up to minimize the mortgage amount, and in a best-case scenario, have the full amount on hands.

Le North Dreamer

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Re: Canadian Couple years in - Are we doing this right?
« Reply #12 on: September 24, 2020, 06:36:26 AM »
Can you find someone interested in part boarding the horses right now?  This will reduce their upkeep fees.  Also, does your wife really need more than one horse if she’s the only one riding?

I've been trying to push this part boarding idea onto my SO for a while, especially now that she is pregnant and won't be riding anyway, but without much success. As for the "s" in horses, she only owns one horse but as horses are hard animals, we had to keep a second one with us for the summer on the farm. We are not getting paid for keeping it as it is a small pony that doesn't eat much and as it was required to keep company to my SO's horse.

Anyhow, I'll need to dig deeper into how much having horses at home will cost us in the long run - I've budgeted a fair amount in the FIRE budget but would love to bring it down a bit.

SunnyDays

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Re: Canadian Couple years in - Are we doing this right?
« Reply #13 on: September 24, 2020, 03:45:03 PM »
Horses do need company, but not necessarily another horse.  A different species like a goat might do just as well.