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Monday, December 22, 2014

Catch the Trade Winds?

Posted by Dave on December 16, 2014

Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.

This quotation showed up on my daily comics feed on Go Comics*, drawn out by one of my favourite illustrators – “Zen Pencils”. The quotation is attributed to Mark Twain, but may have been written by H. Jackson Brown, Jr (Mark Twain’s Estate can’t source it). For whatever reason, out of the 165+ comics that this illustrator has done, this one seems to apply the most to my life.

I am a cautious individual by nature, I keep my head down and do my cushy government job and don’t stray too far away from what would be considered “the norm”. My retirement plan, although aggressive in comparison to most of the population has been set up to be as conservative as possible in order to ensure that it was do-able – Instead of an “Early Retirement Extreme” plan [link], I have more of an “Moderately Aggressive way of Attaining Financial Independence” plan.

I think the thing that most people really worry about missing out on something. Even being a cautious individual who dislikes significant change in my life, I still wonder once in a while if there is something more rewarding or enjoyable that I could be doing with my time, instead of grinding out a corporate career.

The question I ask myself is how comfortable I would be, making a significant career change that may pay substantially less money but give my day to day life more enjoyment. A different way to look at my current life is how comfortable would I be to trade the possibility of being financially independent at age 45 in order to work a lot less now, in order to have more time to pursue some of my interests right now. Maybe if there was a project that I felt really strongly about, like writing a book or excelling at “beer-league” golf, I would think harder about my current life.

My current financial plan will hopefully allow me to “Explore, Dream, and Discover” some more of my hobbies after age 45, and I am hoping that at that time I don’t have any regrets about how I lived my years of early to mid adulthood.

Are you worried about missing out on anything? Have you made a significant career change and been happy you did it?


*I have read the comics almost every day of my life, since I was able to read – I am more than happy to spend the $12 a year that Go Comics charges in order to support this type of entertainment, which brings 5 minutes of entertainment to me every day.

Goodbye Paper Files

Posted by Tim Stobbs on December 15, 2014

Perhaps the most obvious downside of taking an active interest in your finances is the fact you tend to have to read a fair bit of paperwork and then figure out what do with that paperwork.  While my file system is fairly good at the moment I rather dislike the amount of paper files I have in the house.  So I decided to move to more digital files where possible.

To do this with all seven years of previous history is a bit of a pain.  So we decided to invest in a new all in one laser printer that also had a document feeder attached to the scanner.  The ability to load in 26 pages at once and then scan them all at once was worth every nickel I paid for the new printer.

So while I expected this project to take a long time I am already about 80% complete and I only started working on this last Thursday.  So all in I figure I have put in about 10 hours of my time loading documents into the scanner and then shredding them after the fact.  And I also immediately backup the files after I finish scanning for the day to an external hard drive.

Some key points to keep in mind if you were interested in doing this yourself:

  • Decide on your digital file structure in advance.  This makes finding things easier if you need to retrieve a document.
  • Keep in mind not everything can be digital.  Your paper T4′s from your employer and your T3′s from your bank may still need a copy in the event the CRA decides you would look good in an audit.
  • You need to embrace the limits of your technology.  For example, while my printer can print in duplex (both sides of the paper), the scanner can not.  So rather than try to keep the digital file in the exact same order I just split them into two files: front and back.  Yes this means more work if you need a particular document in some cases, but given I rarely look at these documents that is fine.
  • Don’t scan in something you really don’t even need to keep.  In my case I realized we had a few years of documents that were past the seven year cut off from CRA so we skipped scanning those and went straight to shred.
  • Work on stemming the inflow of paper where possible.  Sign up for digital statements where you feel comfortable and skip the paper copy entirely.

While I’m still working out a few issues with this process I find that I will likely keep about 80% less paper going forward.  Also the fact my digital files are much better organized and searchable by title means I can actual find a file much quicker than before.

Are you going more digital as times goes on?  Any advice from you pros out there with very little paperwork on how to handle the paper hoard?

Nov 2014 – Investment Update

Posted by Tim Stobbs on December 11, 2014

Here is our third month of these updates, which brings us back up to where we should be.

The following is an update of Tim’s plan to retire early.  Please note we are mortgage free, and the house equity isn’t part of the retirement plan.

To track my progress I’ve decided to track both my expenses and my investment gains.  So once the investments gains are consistently beating my expenses I’m financially independent and can stop working.  I use a trailing 12 month average on spending (but excluding vacations) and a trailing 12 month average on investment results.


Account (Contribution), [+/- Gain or Loss less contributions]

RRSP $39,280 ($0), [+$630]
LIRA $14,750 ($0), [+$300]
TFSA $48,530 ($0), [+$1850]
Pension $106,940 ($1000), [+$1720]
Wife’s RRSP $69,120 ($0), [+$1080]
Wife’s TFSA $43,830 ($0), [+$1680]
High Interest Savings Account $1120 (-$730),[+$0]

Investment Net Worth $323,570 ($270), [+$7260 or +2.2%]

(YTD Contribution: $41,221), [YTD Gain: $25,879 or +8.7%]

Additional Lump Sum Payment to LOC: $8000 (YTD total)

Average Monthly Gain (12 month rolling) $2377


Last Month $5995

Nope, that isn’t a typo, either.  This month was full of odd spending.  First up we started Christmas shopping.  Then we bought $2000 in gift cards as part of a school fundraiser, so I just prepaid for the next six months of groceries.  So the good news is this should balance out over the long haul.  It just looks messy right now.

Trailing Last 12 Month Average $2681


Number of months trailing average spending covered by trailing investment gains: 0.89 {Target 1.0 or higher}

PF Score: 22.5 {Target 32}

Net Worth ~$723,570


So in summary, Sept sucked, Oct was better, but Nov was great! It was good to see another positive month for gains.  As you can notice now with the size of our investment net worth I see the shifts in the market much more impacting our gains and losses.  So a swing up or down $5000 is fairly easy to see in a month.

Again we put some extra cash on the LOC to continue to pay it down.  We should have about one more lump sum payment in Dec and it should be done.

Any questions?

(click to make bigger)

Nov 2014 Investment Net Worth