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36 year old Canadian husband who wants to retire within 10 years
Old 01-23-2016, 02:28 PM   #1
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36 year old Canadian husband who wants to retire within 10 years

Hi There,

I am a 36 year old Canadian husband who wants to retire within 10 years.

I have been working towards early retirement by putting about half my take home pay towards my networth. I’ve been doing this since 2013. In 2013 I paid off my student loans and achieved a $0 networth. Subsequently I have increased my networth to about $115K CAD ( all figures in Canadian dollars). That number fluctuates daily based on the mood of the financial markets.

The vast majority of my savings comes from living in a relatively cheap apartment, owning one car, and low food spending. Housing, transportation and food are, I think, the biggest spending categories for most people.

My wife is also working towards similar goals and has a similar savings rate.

I want to have at least one child and would like to pull this early retirement off with the child or children.

I currently live on about $28K per year so I figure I’ll need roughly 700-950K in today’s dollars to retire and maintain my current lifestyle (assuming a 3-4% SWR).

When I retire I want to travel with my family, using geographic arbitrage opportunities, and possibly live overseas. I would also like to focus on spending time with family,reading, playing guitar, making friends and acquaintances (particularly with likeminded people) and learning about the world in general.

Hopefully I can learn some things from this community and contribute in my own way as well.
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Old 01-23-2016, 05:30 PM   #2
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Welcome.

Your numbers are good. Are they household (including wife) or just your income/savings?
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Old 01-23-2016, 07:34 PM   #3
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Why aren't you working toward goals together?
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Old 01-23-2016, 09:40 PM   #4
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Welcome.

Your numbers are good. Are they household (including wife) or just your income/savings?
thanks. Those are my numbers, my wife's are similar.
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Old 01-23-2016, 09:51 PM   #5
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Why aren't you working toward goals together?
Hi Pbkmaine, we are working toward goals together, I thought I was clear on that in the original post but I'm sorry if I was not.
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Old 01-23-2016, 09:54 PM   #6
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So, I'm curious, why present the figures as "yours" and "hers"? Why not "ours"?
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Old 01-24-2016, 05:20 AM   #7
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So, I'm curious, why present the figures as "yours" and "hers"? Why not "ours"?
+1. It's very odd to hear you quoting your net worth and not include your wife's. Same with expenses. Your expenses are $28,000 and hers are similar? Don't you mean your expenses are $56,000. And you will need enough assets to support that level of spending.
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Old 01-24-2016, 05:52 AM   #8
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If you are planning to retire in your 40's with young children still in the house, then I think you should shoot for a WR of 2-3%. You have a very long time for your assets to last, and considerable expenses to face. It would either require a larger base of assets, or perhaps waiting until the children are independent.
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Old 01-24-2016, 11:39 AM   #9
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So, I'm curious, why present the figures as "yours" and "hers"? Why not "ours"?
Technically it's our money but we track our savings separately because that's our preference. Some couples like to pool everything and track everything as one entity/unit but our preference is to track it individually. However we do also look at the total net worth and total family income situation from time to time.
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Old 01-24-2016, 11:42 AM   #10
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+1. It's very odd to hear you quoting your net worth and not include your wife's. Same with expenses. Your expenses are $28,000 and hers are similar? Don't you mean your expenses are $56,000. And you will need enough assets to support that level of spending.
I don't think it's odd at all for us to track our incomes separately, we've been doing it for 13 years. Our expenses are almost the same so as a family unit we'd need roughly double the assets to support double the expenses.
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Old 01-24-2016, 12:18 PM   #11
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If you are planning to retire in your 40's with young children still in the house, then I think you should shoot for a WR of 2-3%. You have a very long time for your assets to last, and considerable expenses to face. It would either require a larger base of assets, or perhaps waiting until the children are independent.
Hi DrRoy,

I use the 3-4 % withdrawal rate as a rule of thumb. In reality my withdrawal rate will likely be variable. I am thinking there will be an absolute minimum withdrawal rate, lets say a real 2% rate, along with a variable portion depending on how well my portfolio is doing. Also with kids I am also flexible and would likely have to continue working if my future child has special needs requiring income over and above that which my portfolio can provide. However I am very independent and was raised to take responsibility for myself. Hopefully my kids will pick up the same skills and traits.
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Old 01-24-2016, 04:18 PM   #12
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We are retired in Mexico and the COL is much lower than Toronto or Vancouver. Have a look at numbeo to see what real costs might be. If you like your lifestyle now, you will find it really inexpensive in an underdeveloped country, especially outside the major centres.

If you learn Spanish, you can also get a job teaching English.
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Old 01-24-2016, 04:34 PM   #13
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We are retired in Mexico and the COL is much lower than Toronto or Vancouver. Have a look at numbeo to see what real costs might be. If you like your lifestyle now, you will find it really inexpensive in an underdeveloped country, especially outside the major centres.

If you learn Spanish, you can also get a job teaching English.
Thanks for the tips!

I have seen a lot of people, through the magic of the Internet, do a very early retirement with the help of low COL country. The common countries that come up most often seem to be Mexico, Argentina, Chile, Uruguay, and Thailand. So Spanish would be very useful in most of those cases.

I actually taught ESL in Japan for 15 months between Uni and my real career so I am familiar with what is required with that job.
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Old 01-24-2016, 04:46 PM   #14
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It is my understanding that public universities in Canada offer free tuition to their citizens. Speaking as a US citizen who paid for kid's college... that is HUGE!
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Old 01-24-2016, 04:55 PM   #15
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I look at all the television shows coming out of Toronto on HGTV about houses, etc. With a demand driven housing market, you can spend $500K for a house with no yard that's a complete dump by my standards.

If you're living in a really cheap apartment in Toronto area, you must really be suffering--to be able to save money for retirement.

I believe in living below one's means in order to retire relatively young. But I also believe in having a lifestyle that's normal that supports the needs of my wife and children growing up in a healthy manner.

I love traveling to Canada, and really enjoy my Canadian friends. But it may be difficult retiring very young with a currency that's depreciated fast (against the U.S. Dollar), extremely high cost housing, sales taxes around 15% and $12.99 beer (the cheapest available.)
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Old 01-24-2016, 05:14 PM   #16
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It is my understanding that public universities in Canada offer free tuition to their citizens. Speaking as a US citizen who paid for kid's college... that is HUGE!
In Canada, generally speaking, University is heavily subsidized by the government. However different provinces have different levels of subsidization. When I was in Uni (8 years ago in Ontario) the university expenses were 2/3 tax payer subsidized. My tuition was far less then it would've been at an equivalent U.S. school. I also had a partial scholarship and a good part time job so I my final debt was fairly easy to manage. Yes it's a huge benefit but education cost inflation is getting to the point where tuition is starting to account for close to half of revenues at a lot of schools.

The best benefit of early retirement in Canada is probably the high quality tax payer subsidized Universal health care. I can't say much for the weather though, I prefer warm climates.
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Old 01-24-2016, 05:21 PM   #17
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I look at all the television shows coming out of Toronto on HGTV about houses, etc. With a demand driven housing market, you can spend $500K for a house with no yard that's a complete dump by my standards.

If you're living in a really cheap apartment in Toronto area, you must really be suffering--to be able to save money for retirement.

I believe in living below one's means in order to retire relatively young. But I also believe in having a lifestyle that's normal that supports the needs of my wife and children growing up in a healthy manner.

I love traveling to Canada, and really enjoy my Canadian friends. But it may be difficult retiring very young with a currency that's depreciated fast (against the U.S. Dollar), extremely high cost housing, sales taxes around 15% and $12.99 beer (the cheapest available.)
The housing inflation in Toronto has essentially priced me out of all but the crummiest tiny little rat hole of a house. It's pretty crazy but essentially the result of sustained super low interest rates and rampant speculation (house prices always go up, greatest investment ever mentality). However rents haven't increased at nearly the same pace as the of cost buying. A simple lease/rent vs. buy calculation will probably indicate that renting is , by far, the best option financially for most people in Toronto. My current apartment is clean, healthy and supports plenty of clean and healthy working families with almost no crime to speak of. They're are beautiful parks nearby and I can ride my bike directly to work on a bike trail. On top of that I don't worry about property tax, maintenance, property price bubbles etc.

Currency price depreciations go both ways, it wasn't long ago that the CAD was rapidly appreciating vs the USD. Also when living in Canada you don't notice a lot of the effects of the depreciation except on commodities being imported from countries with currencies that have appreciated. My grocery bill hasn't really changed much. I like to travel to Florida but will probably skip it this year due to the big depreciation. My investment portfolio actually did really well last year because I hold a lot of USD investments.

Beer and liquor is expensive in my area (Ontario) because the government maintains a monopoly on distribution which allows monopoly prices to be charged. This is why crown royal is cheaper to buy in Japan then Toronto (at least it was when I lived in Japan 8 years ago).
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Old 01-24-2016, 05:22 PM   #18
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It is my understanding that public universities in Canada offer free tuition to their citizens. Speaking as a US citizen who paid for kid's college... that is HUGE!
Yes it's true... everything is free in Canada!

Most universities in Canada (and all major ones) are 'public'. As in the US, tuition rates have increased at rates significantly above inflation over the past 20 years though the starting point was lower. Currently in USD, at the 'best' university in Canada (19th ranked in the world just behind Columbia and Cornell and ahead of Duke and Michigan) is about 4100 for a BA, 8500 for BSc/BEng, 14000 for MD and 21000 for DDS.

Tuition in Quebec at universities such as McGill is significantly less for Quebec residents.

Of course, tuition for foreign students is much more.
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Old 01-24-2016, 05:27 PM   #19
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It is my understanding that public universities in Canada offer free tuition to their citizens. Speaking as a US citizen who paid for kid's college... that is HUGE!
Unfortunately you have been misinformed, Brat. University tuition in Canada is reasonably priced, but it is not free. Here is an example.

University of Manitoba - Student Affairs - Registrar's Office - Tuition, Endowment and Student Organization Fees: 2015-2016
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Old 01-24-2016, 06:34 PM   #20
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I'm helping a young couple I know with their finances, and she's originally from Kewlona and went to college in Calgary.

Compared to his tuition at a US school (he's from DC), she certainly got a bargain. But...hers is an art degree and his is engineering.
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