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Monday, March 27, 2017

Temptations

Posted by Tim Stobbs on August 29, 2013

I swear some people must consider me a freak who is immune to temptation from the consumer world.  Actually that couldn’t be further from the truth.  I still see ads and want things I don’t need and fight the urge to spend money on upgrading something I already own.  Yet when it comes to temptation the biggest two I face are: power and money.

The temptation of money is easy to explain, since I have already been saving for years and I’m in a good place financially if you extend my retirement date out to 50…I would have around $1.2 million in investments.  Out to 55 and I could have $1.7 million saved.  And if I conformed fully and retired at 65 I could save $3.4 million which would give me an annual spending rate of $136,000 per year (based on the 4% rule not including CPP or OAS).  If I just continued saving gave up my dream of early retirement, it would be easy to become rich.

My other temptation is related to power.  Just how far up the corporate later could I climb if I worked for another decade or two?  Manager, Vice President, President? Or if I spent more time on politics how far could I go? MLA or MP…Cabinet?  How much could I help the world out by devoting myself more to a career?

Yet while these odd daydreams are fun, I do tend to come around to a simple question: what do I want most?  Money…frankly is fairly common.  Power has its temptations for improving the lives of others, but I rather like my current life.  In the end, I want freedom.  Which is the most powerful option of them all…the ability to do either option above or none of them.  So that is why I can push past temptations, I value freedom more than all the others.

So what temptations do you face on your path?

Vacation Property?

Posted by Dave on August 27, 2013

My stepfather and mom own a cottage in a very touristy part of Ontario. My wife and I really enjoy sitting beside the lake, having some drinks and trying to get the perfect amount of sun without waking up in burning pain the next morning.

This week, my mom took it upon herself to locate a vacation property she thought would be perfect. It was a nice small cottage with a perfect outdoor shower with really nice wood panelling and a crazy rainbow carpet, all on a lot which wouldn’t be legal in most municipalities. The whole glorious thing cost $170,000 – which was on the low end in the area (even with the amazing carpet).

I’m not sure what situation my wife and I could really justify buying a vacation property. In the past few years, we’ve averaged a total of 3 weekends to ourselves over the summer. We spend our weekends driving all over, visiting friends and family. During the cold Canadian winter, we tend to hibernate on our living room couch with Netflix and try to get all of our driving in while the weather is nice and we can sit outside.

We don’t have $170,000 in cash sitting around, so would have to finance a good portion of this property. We would also have to pay taxes, maintenance and utilities on a second property. I don’t even want to pay these monthly expenses on one property, the second one would make me really grumpy every time I was paying bills and not enjoying my vacation property (which is probably 46 to 50 weeks of the year).

While I appreciate people who own cottages, they just seem like they cost a lot of money, something that is tied up for now paying off my mortgage. My wife and I decided that much like our condominium, we would rather have other people look after our vacation property. If we are ever able to find a free weekend over the summer that we aren’t visiting someone or sleeping off the weekend before, renting a vacation place is probably a better idea.

For around $1,000, we can rent a place for a week to relax, read, get some sun and eat a bunch of barbecued food every night. We also wouldn’t have to worry about maintaining a house that we only stay at for only a couple of weekends per year.

Do you have a vacation property? How did you decide whether to buy it or not? How often do you use it?

I’m really interested in this particular crowd’s information as it is a fairly large financial decision that lots of people seem to make.

Experiences Don’t Get Cluttered

Posted by Robert on August 26, 2013

I spent the past week on vacation with my family in Lake Louise and Jasper. In all, we spent around $500. I feel that’s not bad for a once-a-year week-long vacation. And I’d rather spend money on an experience than on stuff. An experience isn’t going to clutter up my house. It doesn’t need to be stored and I don’t feel bad if I never get it out and use it, the way I do with my stuff. In fact, I have great memories and I can always go back and look at all the photos we took while we were there.

The one part of the vacation that cost the most (after the lodging) was a trip up the Jasper Tramway. It costs $80 for the family, and we spent between two and three hours going up the tram and hiking on the peak. If I do the math, that’s really not much more than taking the family to the cinema to see a film. Making that type of comparison, it seems to me like a much better use of money. But I haven’t ever spent that much money to take the family to a cinema, so the comparison is kind of cheating. Rather, I just need to put the cost out of my mind, saying that it’s something we want to do, we can’t possibly hike up the mountain (with our four year old) and we’re not likely to get another chance in the near future.

But I didn’t simply put the cost of the experience entirely out of mind and pay it, consequences be damned. We saved money by camping the first night, rather than staying indoors. It was cold, but it was fun for the kids and it saved $70. We also saved money by going grocery shopping before leaving Calgary, and bringing our own breakfast cereal and lunch foods. We found that the prices at the grocery store in Jasper, while far cheaper than eating in restaurants, were 30% to 50% higher than at home. In the end, I felt that the savings and the splurging balanced each other out and made for an enjoyable and memorable vacation.

Do you feel that spending money for experiences is worthwhile?  What would you splurge for and where would you rather save money?