Hello August!
I haven't worked for anyone else since I was 32. I planned to retire
fairly comfortably by age 55 but things happen.
This guy almost sounds like he's using your approach. But he
>seems to have more money to work with than several of us put
>together:
It's funny, it didn't feel like it at the time but putting my
wages back then into today's money, I was doing fairly well.
The job I left would be about $66,000 a year now and the job
I was offered later was 50% higher, and I had already bought a
just built premium quality 3 bedroom house and was driving a new
Thunderbird and had my cottage and a fairly new motorcycle, so I
was doing okay. My mistake was taking a break from work and seeing
I could maybe get by without the hassles of working for others.
https://archive.ph/5a9Kv
This is what this guy is working with:
The Person: Preston, 39.
The Problem: Is he saving too much or too little to retire at age 58?
The Plan: Keep saving. Consider paying off his mortgage before
>he retires and deferring government benefits. Update his
>forecast as he nears retirement age.
That's tricky.. Many would suggest paying off the mortgage but I
never did that because I could usually make higher interest on my
investments than I was paying on the mortgage, and you can always
use investment money to pay the bills if you lose your job but a
house that's paid off still costs money to keep going..
The Payoff: A look at the alternatives that might be available
>to him when he retires two decades from now.
Monthly net income: $10,440 ($7,275 from salary plus $3,165 on
>average from self-employment).
Assets: Bank account $17,800; TFSA $92,185; RRSP $282,600;
>residence $586,000. Total: $978,585.
He's obviously doing fairly well and the protected money is
available in a pinch (TFSA and RRSP). Unless he just recently
started with a TFSA, I'm surprised he doesn't have more in
that. I much prefer that to RRSP since you pay tax later when
you take money from the RRSP and you are forced to take it at
a certain age whether you want to or not. The Tax Free Savings
Account, you can do whatever you want with it, and any money you
pull from it in a bad year, you can put back later. That's why
I have about double that amount in mine, although much of that
is accrued interest which is why someone new to a TFSA may not
have as much in it. I believe the total you can deposit there
at the moment is $102,000 so about half of mine is money that
just grew in there.. tax free forever..
Monthly outlays: Mortgage $2,205; condo fees $400; property tax
>$260; water, sewer and garbage $85; home insurance $75;
>electricity $70; heating $165; transportation $240; groceries
>$350; clothing $50; dining, drinks and entertainment $600;
>subscriptions $30; phones, TV and internet $125; RRSP $2,400;
>TFSA $585; pension plan contribution $760. Total: $8,400.
>Surplus goes to discretionary spending, including travel, and
>saving.
That reminds me of the old joke, Most of my money goes to booze
and hookers and, whatever is left over, I spend foolishly.. B)
Liabilities: Mortgage of $368,600 at 5.14 per cent.
He's doing well, but that outlay is quite high. Some of it is
well spent and some of it I would consider splurge. The trick to
retiring early is becomeing incredibly wealthy early or finding
ways to keep your expenses low. For years I had bankers telling
me I didn't have enough money to do what I was doing, but I have
managed it for the past 38 years. Obviously it became much easier
once I got old enough to get my full gov't pension.
That's not to say that many would have chosen/been content to
live the way I lived though.. Most friends thought I was nuts.. B)
---
* SLMR Rob * Gross Ignorance: 144 times worse than Standard Ignorance.
* Origin: capitolcityonline.net * Telnet/SSH:2022/HTTP (618:250/1)