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Saturday, August 2, 2014


Posted by Dave on July 8, 2014

In the last few months, we have been consistently receiving a new real estate paper in our mailbox. I enjoy the paper in the summer, because they’re good firestarter for my charcoal barbecue, otherwise I have to buy a print newspaper every few weeks. Last weekend while we were on a road-trip, my wife grabbed the paper out of the mailbox and was reading it to me while I was driving to a friend’s place.

Beyond having an idea of what our own townhouse is worth by looking up listings when we notice new “For Sale” signs in our condo complex, we’ve tried to avoid shopping around for houses. The main thing that would make us avoid even thinking about buying a new place is the hassle of moving. We try our hardest to reduce the amount of crap we have in our house, but somehow we just keep accumulating it. Rather than move, in the last couple of months, we’ve attempted to optimize the house we do own (at a whopping 1,050 square feet + a basement).

Last month, I completed a backyard “renovation”, which mainly meant giving away a bunch of heaving patio stones (incorrectly installed), building a big cedar planter box over a weekend and laying some new sod and cedar mulch. We now have an outdoor space that we hadn’t really used in the 5 years that we’d lived here because it was kind of gross to sit around. Total cost was under $150.

Our next project (which we hope to complete by next spring) is to convert our basement from a catch-all storage area, into a place we can actually use if we have people over. For the cost of a couch, some paint and trim, as well as a few trips to the Salvation Army and city dump, we’ll gain about 400 square feet to (maybe) use.

I can’t see us needing more space, and it always amazes me when I hear people talking about “upgrading” their house – moving from their current 1,200 square feet to 2,000 square feet, something that usually more than doubles their debt levels. When we were house shopping 5 years ago, something as simple as a garage added on to a similar townhouse was going to cost us an average of $25,000. Adding a single bedroom in our townhouse complex (still no garage) of identically built houses was going to add around $35,000. The marginal cost for this extra space seems excessive, and this is on about as low as “low-end” gets on housing in the city I live in.

We don’t really need two separate areas to sit in (a “new” basement and current living room), but we have the space available and it would be nice to sit in the much cooler basement in the summer. For very little work it might allow us to use more of our house – optimizing available space rather than even contemplating a costly upgrade.

Would you consider “upgrading” your house? What would make you do it? How would this impact your financial plans?

Saving Is Not Future Spending

Posted by Tim Stobbs on July 3, 2014

People don’t save enough.  At least that seems to be the theme of multiple studies and opinion pieces around the internet.  We often blame poor education, or consider using forced saving programs, but ignore the underlying reason people don’t save anything: the motivation is damn poor to save anything.

After all the majority of people out there consider saving equal to future spending.  So they think:  “I’m saving today to spend this money later”.  With that in mind it is fairly easy to see why saving for 40 years to fund some distant vague ‘retirement’ is as appealing as paying to watch paint dry.  The daily demands are so much more obviously appealing like a trip to somewhere warm in the middle of the next winter.

So perhaps the issue is people need to change how we view saving, instead of thinking of savings as future spending perhaps we consider it buying freedom instead.  At least on the motivation side of the battle this is a bit more appealing to say, I’m not spending this $100 on more crap for my house instead I’m buying freedom. Yes I know $100 isn’t much, but if you keep doing that on a frequent basis in a decent investment it does start to buy your future freedom.

The part of increasing your motivation is to give something specific to visualize to help out with the motivation.  Imagine each monthly savings is giving you an extra week out of the office forever…what would you do with your extra week?  Go hiking, spend it with family, start your business, or anything else you always wanted to do.  It helps to have an idea of what you are saving for.

The other way I personally find to make saving easier is to automate as much as the process as possible, you want to make the act of saving easy.  Why?  Well when you motivation is fairly thin to begin with it doesn’t take much to get side tracked by something silly.  For example, if you were trying to get into a habit of running you shouldn’t let the first small chance of rain cancel a run..otherwise you are making it easier to fail.  The same idea of saving, so I setup automatic payments to our savings account each month to move the money over the day after payday.  That way there is as little resistance to it as possible to the act of saving.

So how do you motivate yourself to save?  What tricks have helped you build a good saving habit?

Expensive Vices

Posted by Dave on June 24, 2014

Dave is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.

I try not to waste money. I over-think most things I purchase to the point of exasperating my wife with my many visits to stores and websites and constant discussion before I usually don’t purchase anything. There are two things that I don’t really hesitate in spending money on – golf, and beer.

I’ve golfed for almost 25 years now – some years more than others, but it has been one constant in my life through every summer. I really enjoy walking a course, the strategy of playing shots and the feeling of hitting the ball exactly the way you wanted to. As I’m finishing one round of golf, I’m figuring out when I can play the next one, for the entire summer.

In the same manner, but hopefully not in a destructive way, I enjoy drinking beer. I like trying out small breweries offerings, and comparing what’s been made. This past weekend, I shared a couple of 2 litre growlers with a friend in the sun and had a really good time.

I figure golf costs me somewhere between $750 and $1000 per year. I try to keep it as cheap as possible. I’ve found that used balls that I buy off the Internet for about $40 for 10 dozen balls work just as well for me as any of the balls that cost 10 times that much. I’ve owned the exact same clubs for the past 5 years and reject fancy upgrades as there would be almost zero impact to my score for the cost of the equipment. Most of my cost is green-fees, and I try to keep this as cheap as possible by playing at twilight, when there are steep discounts.

For beer, most of what I drink, I make on my stove. One of my favourite recipes (especially for summer, because it’s nice and light) takes $8 in malted barley, $4 in yeast, and $2 in hops, which makes approximately 20 litres of beer, for $0.70 per litre. More expensive beers cost a little bit more for more specialized barley, but are still reasonable. 20 litres of beer lasts me about 2 or 3 months, unless I share a lot of it.

These are my two major personal expenses. I realize that I could quit both of my vices and save 100% of the money I’m currently spending, which would leave more money to invest and eventually retire on. I’d probably be healthier without beer, and definitely richer without golf. My problem with this solution is that I like to do both things. If I were to use a 4% withdrawal rate, I would need somewhere around $25,000 saved to finance these activities (in today’s dollars). For me, I think this is worth it, even though it is expensive.

What would you classify as your major vices? Did you get rid of them to retire, or never really have any to start with?