Goals and finance snapshot

I'm currently in Europe visiting family and the weather is just horrible so I figure I might as well write a followup post. In the first entry I gave a short introduction about why I'm writing this, a little peak into my past and a layout of what to expect in future posts on this blog. This entry will be mostly around goals, current net worth and where that money is located.

I think goals are the most important to define. Every decision you make will be made towards your goals and if your goals are fuzzy then it your decision making will be sloppy as well. So right now the main goal is fairly simple, to reach a net worth of $850,000. I believe that this number basically allows us to live our lives worry free from a financial perspective. Our net worth will be mostly invested in low cost ETF's (more about this later) and I'm expecting a 4% yield which will come down to $32,000 annually. This gives both me and my wife the opportunity to work less and have more free time. Once we reach this goal we will revisit and a create a new goal depending on what we want out of life. A few options could be to invest in real estate, travel for a long period of time or move back to Europe. Time will tell but first things first, how are we currently moving towards our goal?

Our current net worth – as of July 1st, 2019 – is CAD $480,376.56 (€318.864,35), meaning that our progress towards that goal is 56.5%/100%. This took us about 3 years to achieve. By no means do we live frugally so we could've been further ahead and this is something we will need to improve. Our main income streams are a. My income b. My equity package c. My spouse's income. My projection is that we will be able to reach our goal late 2020 or early 2021 depending on the evolution of our employment situation. I have a high earning job but with that also comes a certain amount of pressure and lately I've been thinking about either taking a break or moving to a different job, to be continued. If I decide to take action this will significantly impact our savings rate because I'm near the end of my vesting period at my current employer. From a finance point of view, leaving my company right now would be ultimately stupid but I value my health over money and I feel that even being at half a million dollars in my mid 30's is a pretty good position to be at. If it is a path I will take I really don't have a problem working for less money but still be able to save and adjust my timeline.

My current after tax annual income is CAD $85,800 which is actually lower than what I used to make, surprise (yea really I didn't know). From equity I have received after tax CAD $584.738,00 in the past 3 years. My wife earns about CAD $20,400 annually after tax. Making our after tax average income around CAD $230,300 annually for the past 3 years.

When we came to Canada I decided to take finances a bit more seriously and started researching how to invest and personal finance. One thing that stood out to me was Wealthsimple and that was the first tool we used to start investing our money. I automated deposits for our TFSA's and didn't open an Unregistered account until my second year. I opened the RRSP after our first tax filing.

At some point early this year our net worth hit around $400k and I decided to take a different route and transfer out the unregistered account to Wealthsimple Trade which is similar to Questrade where you diy invest. This is because I feel like the management fees were not worth it and I felt comfortable trying my hand at it. Currently our money – as of June 1st 2019 – is structured like this:

Un-registered $351,410.88
TFSA I $18,589.67
TFSA II $17,995.23
RRSP $60,690.83
Savings I $31,533.15
Savings II $156.80

All our registered and savings account are at Wealthsimple but our Un-registered account is at Wealthsimple Trade. The portfolio – as of June 12th 2019 – on Wealthsimple Trade looks like this:

CDZ $52,800.00
VAB $21,495.97
VGRO $282,311.41
XEI $1,007.52

As you can see the largest portion is attributed to VGRO and the other etf's are to supplement and increase the amount of fixed income in our portfolio. As we move close to our target I will probably increase the amount for the fixed income etf's, I have really enjoyed seeing the dividends coming in from CDZ and VAB, this just gives me that extra motivation to stay in the market. Next time I will go into what ETF's are a bit more taking my own investments as an example, I know there is a lot of information out there already but it will be good research for me as well.

Fyi I'm not affiliated with Wealthsimple in any way, I just like to use their products!

If you want to connect shoot me a message at mindfulandwealthy@gmail.com

#personal #finance #investing #fire