Hi from Vancouver!

[young_dreamer]

Hi everyone,

I've been browsing these boards for a while now and I've been so encouraged by some of the stories I've heard!

And I've just reached one of my goals...$400K net worth...woohoo!


Here are my current dreams (goals):

Reach $500K net worth by the time I'm 35.
Retire by 50 (latest 55).
Possibly move to a cheaper city to retire (Vancouver's gotta be one of the priciest cities in Canada! )

Here's my current situation:
Age 32
Current Net Worth (excluding property): $400K
Clear home title: $700K
Children: 2 yr old boy w/ another on the way
(DW wants to stay home with the children so they are raised right. )


Looking forward to posting more on this board!
cheers.

young_dreamer

 

[Calgary_Girl]

Welcome to the board y_d! We need more Canadians around here
How did you build such a high net worth living in Vancouver? wow.

 

[young_dreamer]

I've been fortunate on several counts to get to where I am...

I owner my first property at about 5 years ago and have flipped my house twice since then (market has been crazy to say the least). Paid $210K for my first property whereas net gain on my last flip was over $300K alone.

I'm a Saver with a capital S; I really try and cut back on costs whereever I can and pay as little as I can for services I truly need. (I'm the type that would switch cell carriers to save an extra buck a month. )
My attitude is probably inherited from my parents and I've always been this way even as a teenager...I was saving even then haha.

I won't disclose my salary, but I'm not one of those people who make six-figure incomes (at least not yet!). I'm a computer analyst by trade and an avid stock investor. I've still got a lot to learn, but my returns have always been very solid. My folks were generous enough to give me a $50,000 head start when I was 27.

I believe anyone can do it if they've got the willpower!

 

[Dawg52]

Great position to be in at 32. At the rate you are going, 45 should be a realistic goal. Move to a more economical area when you retire, you are good to go.

Good luck!

 

[Calgary_Girl]

Here's my current situation:
Age 32
Current Net Worth (excluding property): $400K
Clear home title: $700K
Children: 2 yr old boy w/ another on the way
(DW wants to stay home with the children so they are raised right. )

I like to include the home equity when calculating our total net worth. I figure we can always sell the house and rent if we have too, so why not include it? Thoughts on this?

 

[kcowan]

I like to include the home equity when calculating our total net worth. I figure we can always sell the house and rent if we have too, so why not include it? Thoughts on this?

OK to count it for asset allocations but not for income generation after RE.

Let's say that counting your home equity of $500k you can retire with a 4% SWR. Then it is even only if you can pay the extra income tax and rent out of 4% of $500k. So if marginal tax where you retire is 35%:
Income from $500k - $20k
Taxes to be paid - $7K
Remaining for rent - $13k

So you will not have a luxury rental compared to that $500k home.

Of course, your marginal tax rate in RE will probably be less, and your investment return will probably be greater. Say you get 7% returns and marginal tax is only 20%:
Income from $500k - $35k
Taxes to be paid - $7K
Remaining for rent - $28k

So now you can probably rent a pretty nice place, especially outside Calgary. Save some of that $28k to account for inflation in your rent.

 

[kcowan]

Hi everyone,
Children: 2 yr old boy w/ another on the way
(DW wants to stay home with the children so they are raised right. )

Make sure to budget adequately for the 2 children. Your household expenses will increase substantially in 18 years with 2 kids in University. What are you and your parents doing in RESPs to anticipate that?