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Old 07-01-2015, 11:29 PM   #61
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I'm glad to see a thread about this on here. I spend a lot of time thinking about my career path and finances. Worryingly, my investments, on which my bank advised me, are returning less than 2%, which is pathetic. I need to find a better, secure solution that still won't need me thinking about it too much.

I feel like I have my personal spending handled reasonably well, except for housing. I was tired of living in a place where I had to listen to the neighbours' screaming baby through the walls, and a decent one bedroom on the outskirts of downtown is in the $1200 range with parking, which is a decent chunk for me. Girlfriend and I are talking about sharing a 2 bedroom together come fall, so that'll cut the expense some. Long term, though, if I want to own a decent house one day, I need to up my income or live with a girl who makes similar money to what I make now.

Otherwise, living nearly downtown means I don't need to own a car (the Miata sees about 4,000 miles per year, and the $125/month parking is the most significant single cost). Both school and work are painlessly accessible by public transit, and I can take planes for similar money to what people spend on a cab to the airport. I go to school part time (B. Comm in Management) with hopes that I can use it to advance my career. University in Quebec is cheap (~3 grand per year, full-time). I don't spend much on going out, other than some drinks when I'm laid over in Germany and have nothing else to do but hang out at the hotel if I don't go drink in the pub with the locals.

I'm in my early 30s and work as a flight attendant, which means lots of time off (but jet-lag), above-average pay, defined benefit pension (if the company doesn't succeed in screwing us out of it), and cheap travel.

I manage to put away about 18% of my take home pay, and feel pretty good about that, except that home ownership has gotten so expensive. The condo market in Montreal is currently a waste of money in my opinion, and the only way to get a house for under a quarter million is to live 2 hours outside of town, which currently wouldn't make any sense.

I feel like I need to explore alternate income streams. Once I'm done my degree, I'll have the choice of trying to climb the corporate ladder in the rat race, which would probably mean taking a pay hit short-term, or continue my brain-dead, relatively-easy job, but suffer from jet lag and random schedules, and take advantage of my free time to get some kind of side hustle going. I currently make about 40% more than the average salary for the area, and don't feel like I'm balling at all, despite no debt and a modest, growing, 5 figure savings account.

It's interesting to see what you cats do.
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Old 07-02-2015, 12:07 AM   #62
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You guys looking for low cost investing. I'd check out wealthfront, betterment, Scottrade they all have a few low cost ways to invest.


Started working at 22 now 29. Single, no kids. Save about 25% of income with match into 401k. (50% roth 50% pre-tax) Pretty much spend everything else I make.

Just got a masters degree in finance. Its paid off already. hoping this will easily push me into some 6 figure base salaries + bonus.

My House will be paid off by the time I'm 42. 3 cars (90s) one motorcycle (60s)

According to my 401k calculators if I keep the same salary (should be going up a lot soon) & savings rate. I should be able to retire between 45-50 generating about $100k/yr with 5% return rate. Realistic with no house payment my expenses are prob $400-500/mo if that. So I'd have plenty of money with 50k/yr depending on vacations and toys I want to buy. My biggest issue is if I have kids & get married I'll prob be working until I'm 55-60.

I think owning older cars is a huge benefit. Also getting into hobbies that make sense financially. Racing cars is a loss leader but I still do it but lately I've been getting into guns. Its crazy how well they hold their value and ammo is up 250% in 15-20 years. Also Shooting is fun can be competitive. I'm kind of tired of putting money in the market I have enough in my retirement acct. Looking for ways to diversify overall and hard metals and oil are a terrible place to be.
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Old 07-02-2015, 12:10 AM   #63
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Following this thread there's a lot of good advice but frankly it boils down to; 1. spend less then you take in (also the best business advice), 2. find a place to park your money that hopefully will pay you the best + safest rate of return (I've not seen any mention of rental properties or the like), 3. don't have any debt and 4. if you must pay someone to manage your 'investments' pay them the least you can (index funds).
I have a rental property. Id move back into it if my wife would tolerate a small house. Despite being in a nice neighborhood, me paying down an extra $20k on top of the morgatge I still don't have enough LTV to refi out of an ARM I'm stuck in. Right now its 2% interest and change..but If rates go up before house values do - I'm gonna be bleeding money. OTOH its been very profitable. The key is getting a quality tennant - and they are out there. I've had the same tennant since '07 I think, and they keep the house nicer than I ever did, and was only late once with the rent. So far so good.
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Old 07-02-2015, 10:26 AM   #64
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It's interesting to see what you cats do.
All I got out of that was that you're a flight attendant and you own a miata.
I don't know anything about Canadian tax law, so I won't talk out my *** and give you advice.
As far as your free time goes, take up a hobby that you can turn into a career, if need be. Welding comes to mind.


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I have a rental property. Id move back into it if my wife would tolerate a small house. Despite being in a nice neighborhood, me paying down an extra $20k on top of the morgatge I still don't have enough LTV to refi out of an ARM I'm stuck in. Right now its 2% interest and change..but If rates go up before house values do - I'm gonna be bleeding money. OTOH its been very profitable. The key is getting a quality tennant - and they are out there. I've had the same tennant since '07 I think, and they keep the house nicer than I ever did, and was only late once with the rent. So far so good.
Exception to the rule. Rental properties eat up a disproportionate amount of your time. I was fixing a burst water main in the front yard at 2AM a few weeks ago...ask me how I know.

One shitbird tenet, one huge repair can wipe out YEARS of profit. You also have to be aware of tenet\eviction laws, they vary wildly from state to state. In essence, you're maintaining another house, great if you're already retired and looking to fill your free time. Less so if you already have a full time job.
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Old 07-02-2015, 11:33 AM   #65
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Exception to the rule. Rental properties eat up a disproportionate amount of your time. I was fixing a burst water main in the front yard at 2AM a few weeks ago...ask me how I know.

One shitbird tenet, one huge repair can wipe out YEARS of profit. You also have to be aware of tenet\eviction laws, they vary wildly from state to state. In essence, you're maintaining another house, great if you're already retired and looking to fill your free time. Less so if you already have a full time job.
I own a rental property in a vacation area. During the summer we rent it short term for 1.5X/week the monthly rate in the winter.

The winter tenant is the same couple for 5 years (they have a place on an island for the summer) and pay a decent monthly rate + all utilities including snow removal etc.

It's not on a lake but is in a town with many town beaches and within walking distance of the town docks and downtown area.

It is typically occupied 85% of the summer and from Oct - May 100%.

We completely gutted and rehabbed the place 5 years ago so no maintenance issues.

We easily gross (after fees) $20K. No mortgage. Could we have spent our money more wiser? Likely. So what.

My neighbor at home owns 8 properties, has rehabbed them all which he bought during the downturn and added approx. 20% to each property in reno costs. He gets $1,200/mo per house and uses a part time contractor who watches things if he's away. He's retired but honestly it's what he likes to do anyway.

My point to the rambling is there's a bunch of ways to make money. Not all involve money managers...
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Old 07-02-2015, 12:31 PM   #66
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Sorry, couldn't help it

I'm enjoying the hell out of this thread BTW. My wife got laid off about 6 months ago so we've been living solely on my income while still putting money in the bank and hitting targets. Its not the funnest thing ever, but for the first time in a LONG time it feels good to have **** under wraps.

I'm setup with the matching 401k via work but I'd like to expand into other things as well. I'm pulling tons of great info out of this thread, please keep it rolling.
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Old 07-02-2015, 09:31 PM   #67
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Before anyone else comes out and declares "kill all the debts!!!", please remember that there is a such thing as a "good debt".

Two very excellent examples: Student Loans and Mortgages. A huge chunk of student loans and almost all mortgages come in at a stupid low interest rate. On top of that, the interest paid out to each of these loans is fully tax deductible. As an example, I pay 3.75% interest on my mortgage. If I am in a top federal tax bracket (we'll call it an even 40%), then every dollar I spend on that 3.75% interest rate is tax deductible. This makes that 3.75% interest rate effectively about 2.25% after uncle Sam gives me 40% of my interest payment back.

So: for every dollar that you use to pay off the principal of your home, you are saving about 2.25% in interest payments.

That same dollar, spent well in the markets, earns you about 10% interest.

I will never make more than the minimum payment on my mortgage or student loans.
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Old 07-02-2015, 09:54 PM   #68
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Quote:
Originally Posted by fooger03 View Post
Before anyone else comes out and declares "kill all the debts!!!", please remember that there is a such thing as a "good debt".

Two very excellent examples: Student Loans and Mortgages. A huge chunk of student loans and almost all mortgages come in at a stupid low interest rate. On top of that, the interest paid out to each of these loans is fully tax deductible. As an example, I pay 3.75% interest on my mortgage. If I am in a top federal tax bracket (we'll call it an even 40%), then every dollar I spend on that 3.75% interest rate is tax deductible. This makes that 3.75% interest rate effectively about 2.25% after uncle Sam gives me 40% of my interest payment back.

So: for every dollar that you use to pay off the principal of your home, you are saving about 2.25% in interest payments.

That same dollar, spent well in the markets, earns you about 10% interest.

I will never make more than the minimum payment on my mortgage or student loans.
Regarding writing off student loan interest, there is a limit to your income to qualify for that. I never got to write any off due to this, they publish a new modified adjusted gross income every year for this.

Also, my student loans were all in the 6.X% range and 10 year notes. I did the math, if I made minimum payments when I got done paying them off, I would have paid almost exactly twice as much as I borrowed back. I choose not to do this and just paid them all off as quickly as I could. In total I ended up paying less than 1,000 dollar in interest on these loans by paying them off quickly instead of letting them carry for 10 years.

Also regardless of what you "could have done" with the money, there is also the pleasure of simply not having debt. I sleep better at night not having to worry about debts. It allows me to focus on other things instead of having to worry about payments on a dozen different things. This benefit is psychological but it's nice and for me it makes my life more relaxed.
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Old 07-02-2015, 10:58 PM   #69
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Agreed. Being debt free allows you much greater freedom to buy larger ticket items when you need/want as well. No big deal, and that can be important, especially if you own your own place.
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Old 07-03-2015, 12:39 AM   #70
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Or to put it another way -- if you were already debt free, would you go seek out a loan at 3% or whatever so that you could invest the money?
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Old 07-03-2015, 10:04 AM   #71
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Or to put it another way -- if you were already debt free, would you go seek out a loan at 3% or whatever so that you could invest the money?
That would be a quick way to stay in debt...
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Old 07-03-2015, 10:28 AM   #72
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Or to put it another way -- if you were already debt free, would you go seek out a loan at 3% or whatever so that you could invest the money?
This is really just a risk tolerance question. This is just called leveraging and is quite common. In fact, this is essentially what any business loan is doing.
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Old 07-03-2015, 01:21 PM   #73
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This is really just a risk tolerance question. This is just called leveraging and is quite common. In fact, this is essentially what any business loan is doing.
Not sure that's what's really being discussed here though -- personal finances with regard to early retirement comes with a different set of priorities than seeking a business loan to start or grow a company.
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Old 07-03-2015, 02:41 PM   #74
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Not sure that's what's really being discussed here though -- personal finances with regard to early retirement comes with a different set of priorities than seeking a business loan to start or grow a company.
Well his point is correct though, at least at 50K feet...

If you're a really high stakes investor you likely are doing some margin buying but I like the simple life and stick by my statement of 'no debt' or at least if you must have debt make it the first thing that gets paid back I.E. mortgage to get started and pay it off as early as possible.

But in the real world going to the local bank and asking for money to invest in the stock market is a non-starter.
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Old 07-03-2015, 04:54 PM   #75
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If we had saved up a significant sum of money, and we were specifically looking to buy a house with that money, I would look to buy the house in cash. Once the paperwork was done, I would most likely look to "re" finance the house in order to put the cash back in the market. Having a house "paid off" is a lot like having a crap ton of money in a checking account that you're never going to use. Until mortgage rates go up, it's better to have that money in the market, and if you want to be "debt free when you retire", then make a large single withdrawal from your investments on the day you retire to cover the remaining principal of your home. Your home will still be paid off in retirement, and your remaining investment accounts will still be larger than if you had paid off the mortgage early.
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Old 07-03-2015, 06:28 PM   #76
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If we had saved up a significant sum of money, and we were specifically looking to buy a house with that money, I would look to buy the house in cash. Once the paperwork was done, I would most likely look to "re" finance the house in order to put the cash back in the market. Having a house "paid off" is a lot like having a crap ton of money in a checking account that you're never going to use. Until mortgage rates go up, it's better to have that money in the market, and if you want to be "debt free when you retire", then make a large single withdrawal from your investments on the day you retire to cover the remaining principal of your home. Your home will still be paid off in retirement, and your remaining investment accounts will still be larger than if you had paid off the mortgage early.
If rates stay cheap, and you can get under 4% on 15 year money.. maybe.
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Old 07-03-2015, 06:43 PM   #77
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<p>Borrowing to invest appeals to&nbsp;me, but my wife wants the secure feeling of the paid off mortgage.&nbsp;</p>
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Old 07-03-2015, 07:27 PM   #78
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I'm quoted 3.25 for 15yrs on a refinance I'm working on.
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Old 07-04-2015, 02:38 PM   #79
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I work for the gooberment. We have whats called a TSP.

https://www.tsp.gov/index.shtml

Im a mechanical, electrical kind of guy. Finances are the devil, I dont even know what questions to ask, my brain just switches off when it come to finances. I assume because of my extreme ignorance, that im not doing everything i can, so if anyone has any advice on how i can maximize this system, im all ears.

Ive diversified into a number of the funds, but i cant login at the moment and get that info. Maybe later.
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Old 07-05-2015, 06:00 AM   #80
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Originally Posted by fooger03 View Post
Before anyone else comes out and declares "kill all the debts!!!", please remember that there is a such thing as a "good debt".

Two very excellent examples: Student Loans and Mortgages. A huge chunk of student loans and almost all mortgages come in at a stupid low interest rate. On top of that, the interest paid out to each of these loans is fully tax deductible. As an example, I pay 3.75% interest on my mortgage. If I am in a top federal tax bracket (we'll call it an even 40%), then every dollar I spend on that 3.75% interest rate is tax deductible. This makes that 3.75% interest rate effectively about 2.25% after uncle Sam gives me 40% of my interest payment back.

So: for every dollar that you use to pay off the principal of your home, you are saving about 2.25% in interest payments.

That same dollar, spent well in the markets, earns you about 10% interest.

I will never make more than the minimum payment on my mortgage or student loans.
My fed loans are 8+% and I can't write any of it off because of what Pat said.
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