Keepin’ up with the Blog

Peoples of the internet. This blog is becoming DANGEROUSLY close to being defunct. My last post was over 1 month ago. BLARG!

I want to be straight with you. This here post is just to appease the masses who are visiting my blog after my brief catch-up interview on the FABULOUS FI podcast, ExploreFI Canada! Shout out to Money Mechanic (Of FI Garage fame) and Chrissy (Of eatsleepbreatheFI fame) for inviting me back once again.

So if you came from there, thanks for stopping by. If you did not, WELCOME! I’m sorry for being so slack about posting on the blog regularly but there’s lots of fun old content you can read that *might* still be relevant!

What is Going On

I’m still feeling a bit sloggy as per my previous post. But I really must say, my general attitude and effectiveness at adulting has improved slightly in recent weeks. I do wonder if it has to do with the nicer weather we are having. I feel it could also be due to the lightening of the global pandemic blanket that lays on top of all of us. As of this past Friday, it has been 2 weeks since my second COVID vaccination, which has brightened my spirits a bit. HURRAY! I have also planned a trip to *gasp* ANOTHER province! That I do not currently live in! How exciting is that? A province with the best beaches in the country, I might add. Have I mentioned that I like the beach?

A recent beach trip

What about FI/RE?

In terms of FI-related activities, not much is going on at this particular second. Except that I think I’ve come to a crossroads in the journey. Things I’ve already done to aim for FI include:

    1. Started budgeting very effectively
    2. Optimized expenses as much as possible (wellllll not 100% but like I’m doing ok…the grocery bill is still too high)
    3. Paid off non-mortgage debt
    4. Got a better rate for my mortgage
    5. Started investing some of my own money; improved investment situation with my financial advisor for other money
    6. Started only buying things when I have the money, vs borrowing.

Things I once thought I might want to do are:

    1. Increase income
    2. Max out my registered accounts
    3. Increase savings to allow me to retire in 11 years
    4. Pay off mortgage

#2 and #3 are still on the plan. #1 is on the back burner. I’d say #4 is not a goal anymore. I had these grandiose plans to put extra payments down. I increased my regular payments to shorten my payoff period. However now, I’m thinking very differently about the mortgage situation (especially considering the low interest rates).

Options

After some trial and error on increasing income through side hustles, I’ve come to realize that I’m not good at that. Maybe I’ll go back to focusing on increasing income in the future, but not right now. At this point, I would like to improve my financial situation by doing one  of the following:

        1. Refinance our home and invest the equity in the market. There are some different ways to do this, and I would need to determine which way is best. This will involve a thorough analysis of where the best place is to put the money (i.e. tax-free accounts or taxable accounts taking advantage of a strategy such as the Smith Manoeuvre. I bought the book but I’m not too far into it yet…more to follow).
        2. Put a down-payment on a rental property with some or all of the equity we can pull out. Purchasing a rental property will definitely be more work and far less passive than #1 however the returns could be amazing if we do it right.
        3. Put the cash back into our current home to upgrade it and therefore increase it’s value, while also enjoying the benefit of an upgraded home. Our home is in a very desireable area where prices have recently gone way up. That said, the house is about 40 years old, and has some maintenance/upgrades that should be done before we sell it down the road.
        4. We could split the cash across 2 of these options. For example, we could invest some in the market, and use the rest to complete some upgrades to our current home.

Hubs, being the natural spender in the family, immediately selected option 3 when I proposed the first 3 ideas. I had not had a chance to even GET to option 4. But I think option 4 is likely the best bet.

Rationale

Slow FI is ok with me, as long as I can meet my savings obligations to reach FI in 11 years. Therefore, spending $ to improve our living situation is worth it to “design” a better life for my family (and, assuming the mortgage interest rate on the refinance are almost as excellent as our current interest rate). Also, it makes Hubs happy. Which is important. If you want to learn more about designing your current life to be more like your desired future life, please do visit the Fioneers. Jessica has totally inspired me in this regard!

Also, I’m coming to the realization that I could literally die at any moment. I know the chances are low assuming I have no obvious health issues and I lead a relatively safe existence, but the yearn to penny pinch really goes out the window when you see someone just like you leave the earth unexpectedly. That’s depressing, but that is how I feel more and more. Right now I have health, and my boy is still young, and I need to maximize this here and now situation. So, spending some money to improve upon the place where we spend most of our time seems reasonable. As does taking a year off to travel, or figuring out other ways to spend more time with family and friends. Obviously we cannot do everything, but we can do something.

What else? Considering our mortgage term will need to be extended, we’ll end up paying more interest and we’ll have have less equity when we sell it post-FI. I’m not really too fussed about this. Firstly we’ll gain more interest from the market/property investments. Secondly, my goal is to have some kind of income post-FI which isn’t accounted for in my plan at all, which would allow me to at minimum, pay the mortgage for a longer period without even touching my savings.

Well, what do you think? Is this the best plan for me and the fam? Are there other options I should conisder? Do let me know YOUR plan, and your thoughts on mine in the comments! And thanks for coming back to the blog despite my absense. It is much appreciated.

5 Replies to “Keepin’ up with the Blog”

  1. Hi T,
    Welcome back, but you were never really gone! I’ve gone months without a post so as long as you’re liking it, do what’s right for you.

    Option 4: I like the idea of enjoying my home with upgrades (new deck this year) but also setting up for the future. I don’t go 100% into any one thing and like to spread my money around.

    I’m with you on the SlowFI mindset. I prefer that to trying to optimize and grind for everything. It was too much. Taking my foot off the pedal has allowed me to focus on “now” and quality of life.

    Great to see you back. I better go listen to the episode now!

    1. Hello, and welcome! Interestingly I was just reading your quarterly update. The main home upgrade we want to do is a new deck, so it’s nice to see I’m not alone in this. Enjoying your outdoor space is primo important in the short Canadian summers! Unfortunately I cannot do the work myself, so I’m spending more. That said maybe there are some things we can do ourselves to save a bit.

  2. Hey T,
    Thanks for joining us on the show!
    Umm, I may disagree with you about the best beaches in the country. We might have to agree on a tie with some of our west coast beaches.

    Happy to chat with you about the SM now that I am soon to be an ‘ambassador’. Just remember, using your existing equity to invest is leveraging, and is not really the SM. Also, be very careful if you use your equity for investment and ‘consumption’ like home improvements. This will create complicated accounting that you need to be on top of when the CRA comes calling.

    I too agree with slow FI, or Coast FI for me. It really is all about finding that balance with life, family and finance. FIRE marks a point in time, but it’s up to you how you get there, and what you do after. We all need to think about enjoying the ride.

    1. So yes. I realize that I didn’t word this well. I would like to rewrite this because if do SM, I do not need to take out equity. I can just get the re-advancable mortgage. But can I then also refinance to increase my mortgage amount at the same time? Thanks for the free advice, SM ambassador. Heh. PS I will finish the book ASAP and avoid asking more dumb questions, but you came here so I figure it’s fine because the audience is small. Haha!

  3. Hey T, sorry for my late comment. I’m always happy to read your updates, even if they’re spread out.

    Thanks again for coming on the show to chat with us. It seems that a lot of people resonated with your experience of the slog/doldrums. I’m glad we were able to share what you’re going through, if only to let others know they’re not alone!

    I hope you’re having a lovely summer and that you’ll get lots and lots of beach time before it gets chilly and wet again!

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