Housing Costs; Plan first, move once.

For the average Canadian, housing is typically the largest line item in their monthly budget. There is a general rule of thumb that you should be spending 30% of your income on housing. Canadians are spending as much as 50%. My advice? Spend 20% or less. I also recommend spending a lot of time shopping around and weighing your options before you move.

The cost of housing in almost every major city in Canada is increasing year over year. Once you find the place for you, buy it or rent it. Yearly increases in rent and interest rates are lower than the increasing costs of the rent and mortgages themselves. The sooner you nail down a place, the better.

Once you have a spot, stay there as long as it fits your lifestyle. Avoiding cashing out only to be greeted with more expensive housing. This also helps eliminate moving costs, give you leverage when you renegotiate services, and more. Every time you move, you risk needing to swap out furniture, buy appliances, and spend money that you wouldn’t need to otherwise.

If you can live far below your means, you’ll have more money to save and more money to spend on things you want. If vault ceilings and stainless steel appliances truly make you happy, that’s okay too. For some, a quiet, comfortable place to lay your head it enough.

Are you overspending on housing? Do you have any housing tips?

-Mike

 

 

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Ask Your Coworkers How Much They Make!

This is always a touchy subject for people. For some reason, we have been convinced to not talk about our salary. Whoever made this the norm, is a genius social manipulator. What do you have to lose by asking? Nothing. Sure, it might be embarrassing to find out other people make more than you..but it should light a fire under you to change that!

It is equally as important to keep an eye on what the going rate for your skill set is.

  • What is the highest amount people are getting paid?
  • What is the lowest amount people are getting paid?
  • Where are you on this spectrum?
  • Which companies/industries pay the most?

Make a determination to see if a few words with your boss might get you a sweet increase. I’m a saver, but all the saving in the world could be in vain if you’re getting under paid. What is your time worth? What is your pride worth?

Get out there and ask! If you’re low, make a plan to get even or better. Find your worth and get it.

-Mike

Canadian Pension Plan

I recently stumbled upon this excellent tool from the Canadian government that you can use to determine your retirement income. A lot of the data you’ll need may require some digging to find but it should give you a pretty clear picture of what your current situation and future situation will look like.

I came upon this will trying to figure out how much CPP I will receive in early retirement and it’s entirely dependent on how many years you have been earning and how much you earned each year. I can’t recall what I was earning before starting my career, so I can only assume I’ve been hitting the top target for 4 years. That means I’ll need to work another 16 years in order to receive 50% of the maximum monthly payment. It’s not a lot, but every dollar counts.

How do Canada’s social programs factor into your retirement?

The Economy of You

An economy is essentially a byproduct of monetary transactions. Money comes in, money is spent on services. Money is lent, money is spent, money is paid back with interest. These are the fundamental parts of the system.

Investing relies on the economy and we hope the economy grows in a healthy way. However, every investor should be prepared to weather a storm. Unfortunately, due to extreme amounts of lending and not paying back these loans in the western world, things are getting pretty scary out there. Is a crash imminent? I can’t say. What I can tell you is, by keeping your personal economy strong you can be prepared for this.

Lately, I’ve cut spending on items that don’t produce value. I’m spending more on investments, saving more liquid cash, and seeking novel ways to grow my money. If everyone were to do this, the economy would slow. The few FIRE minded people out there can benefit if they jump on this opportunity while the economy is strong; your money will go further when it’s not.

It may sound like I’m not enjoying the fruits of my labour, but I am:

  • Getting more enjoyment out of the things that I have
  • Finding joy and new experiences in starting businesses
  • Focusing on internal growth. (Go to your local library and get a book. Do it now!)

I really enjoy seeing my net worth increase and learning, so this is easy work for me. If it’s not your cup of tea, I hope you can see the light at the end of the tunnel and can grow your own way.

Look at your personal economy and see how you can make it stronger, more robust, and be prepared to weather any storm. When the downpour starts, you’ll be happy knowing you came prepared and can hit it full on.

-Mike

 

FIRE: Where is the excitement?!

Okay, so I’m going to humble myself really quick. I don’t know shit about Financial Independence/Early Retirement. I’m new to the idea, and I haven’t even gotten close yet. There is so much passion coming from the people involved in this idea, they study every aspect of how to make the dream the reality. These people are the sensei to my samurai; seriously. These people love the journey and the result.

However, maybe I just don’t see the raw excitement coming from some when they reach financial independence. I guess it’s sort of like winning a race; you’ve reach the end, you feel good but you’re gearing up for the next one. I really hope when I reach FI that I can showcase my passions and really share the experience with anyone who will listen. FI is when you earn true freedom and you really get to own every minute of your life. Yell about it! Tell everyone! Say everything!

I know a lot of the publications I read are tailored to their viewer, but I’d love to hear about how amazing the end result is! Listen to a podcast that makes me want to pickup my keyboard, throw it across the room and go buy motorbike and drive across south america. Maybe finance isn’t emotionally exciting, but it could be, you know?

Maybe I’m just being a dick and ranting. Maybe I’m showing my thrill seeking behaviour. Whatever. Hopefully I can bring some fire to FIRE.

Stay tuned for more heat.

-Mike

Useful Subreddits

I’ve been reading http://www.reddit.com for a long time. Typically I’d waste time reading useless junk. I mean I still do, but I used to, too. All jokes aside, there is a tonne of great resources on Reddit and tonnes of talented people. Find me at /u/torontosurvivalguide

Below are some subreddits that contain a treasure trove of useful information to help make you more self-sufficient:

Business

DIY

Finance

Food

Lifestyle

Philosophy 

Self Sufficiency

Shopping

Travel

I hope you find something you like!

-Mike