Sunday, February 28, 2010

Big City vs Little City

As I have mentioned previously, we moved away from the "big city" to get away from the smog, the hurrying and the higher cost of living.

One of the sections in our national newspaper I frequent is the real estate one where they feature some of the recent "done deals" home sales in various parts of the city.

One such deal was in the area I used to live while going to school and where had I stayed, would have wanted to buy in. It is a pretty sought after location for families as it is close to a couple of well know public and private schools.

It sold for $722000. In order to afford it, the couple who bought it would need to gross approximately $12000/month, put $50000 down, pay $21000 or so in default mortgage insurance and be ok with $3400/month mortgage payment for 25 yrs. The mortgage rate is a 2.25%, 5 yr variable.

We are currently paying just over $4000/month total (regular mortgage and prepayment) so the amounts are similar. We'll get it done in a few years, not 25.

I guess we could afford something like that house above if we wanted to as cash flow wise, it can work but I wouldn't want to pay a mortgage til I was 63 yrs old. And another thing, it is half the house we currently live in and on 1/3rd the lot.

Everyone views value differently. If anything, I make more money not being in the bigger cities so the combination works well for me. For D, he would make more money in a larger city.

Big picture, there are a lot of options and combinations of options that can work in the favour of someone looking to get out of debt or the rat race earlier.

If more people thought outside of the big city box, did some math, maybe a smaller city lifestyle could work and the benefits of more time, better air, less traffic jams, less debt would be possible sooner.

Saturday, February 27, 2010


My heart is going out to the people of Chile.

Mother nature has been tough on a lot of people and places already this year.

Friday, February 26, 2010

Rental Opportunity

An interesting opportunity to purchase a duplex has come up. D stumbled upon it yesterday and took steps to find out more. He has this spreadsheet that calculates cash flow on rental properties and when he comes across one, goes through the exercise to see if it will work. Most don't until now.

The back story is that the seller owns a half dozen homes and because of a recent job loss and incoming baby, is selling a few of them to get some cash in the bank. There has been offers tabled but they have not been completed due to financing.

After speaking with my banker, D found out that even though the new mortgage changes aren't supposed to come into effect until April, it has already changed at our bank. They are asking for 20% down on rental properties and it cannot come from an unsecured source.

I have less of a mental block with the idea of owning a duplex vs. renting out the cottage as I am not living there. There is a high possibility we'll be making an appointment to see it.

What we know -- the tenants both are new as of last fall, so they haven't been there a long time. From the pictures, the house has been completely renovated with the wiring, electrical upgrades and plumbing upgrades done.

The kitchen and styling are all modern. It looks like something I would be willing to rent. That is important to me. I wouldn't want to be slum lord. And it is cash flow positive. We know what the tenants do for a living and that they wish to stay.

On paper would mean more another asset and debt even though it is supposed to "run itself". I have no experience with this -- D does though. Do we want another property? Or the potential work? Is this particular city a good one to invest in?

We would have to fund the whole show should there be total vacancy and how do we feel about that? It really means, how do I feel about that as I would be the one funding it. Could I do that and continue our current plans at the same time? I know I am not willing to work more for this.

If we are able to answer these questions, we'll know pretty well if this avenue is one we will continue to pursue or not. Plus we'll learn some new stuff which is never a bad thing.

Thursday, February 25, 2010

Life and Budgets

D filed his income tax last night. The lucky duck is getting money back -- monies that will be used to pay my tax bill. Luckily there will be enough left over to pay for half of our next trip. We are happy about that.

We are also awaiting the annual bonus news. Not working in a corporate environment, I get excited about stuff like this. His company has done really well despite the economy but you cannot count on it until it arrives in the form of a letter of notice that is supposed to come out next week. Fingers crossed!

D didn't get a raise last year. Those who did got 1%. So not sure about this year.

I never budget with the assumption there will be more money. In fact the last 2 years, our budget shrank. That is me being uber conservative about my income as well. I'd rather know we can live on less than be forced to cut back in surprise. I feel more confident and in control that way.

The extra monies we have left from living off of a smaller budget allows us to take a trip or 2 -- a great bonus for living frugally throughout the year. Even I have to admit that we are pretty bare bones right now. Not sure I will be able to find new places to trim for next year.

Winter is more than half over and we have accommodated to not going to the cottage for the first time this season. Though the roads have been good this year, it has been really enjoyable nesting at home.

I can now understand why most cottagers use their place seasonally (May to Oct) even though it can be used year round. It feels like we are more in tune with the yearly cycle. If the weather cooperates, we'll open ours up at the end of April.

Wednesday, February 24, 2010

Role Reversal

I was witness to a disturbing role play between a mom and her 11 yr old son yesterday. She was describing how due to the breakdown of her current relationship with her boyfriend (not her son's father), she is in the midst of liquidating some assets to pay off debts.

Nothing really strange about that until her son piped up and started talking about the logistics of the sale of assets which got his mom started on how tiring and frustrating it has been and the son reminding her to breath and that it is ok to want to scream if it helps relieve the was the look on the boy's face that caught me. He was the adult then.

You could see just how upset her son was getting about the whole situation. Holy smokes, he is just 11 yrs old. I'm not sure it is that appropriate to have someone his age so emotionally involved like this. It takes away their childhood. Plus this type of stuff is best left for the adults to handle.

I agree with teaching kids how to manage allowance and learn to save but not what's going on above. I don't feel it is fair to them to take on such a burden. If the mom needs to talk to someone about it, I feel another adult/family member/girl friend/guy friend etc. would be more appropriate.

Tuesday, February 23, 2010

Rise Up

I've gotten into the habit of waking up early. Mostly because D gets up early (6:30am) for work. At the start, I grumbled about being woken up as I work steady afternoons and chose those hours because I wanted to sleep in.

Now that I'm pretty used to it, I can definitely say I have become more productive. I write and read more. I've been a better friend as there is more time available to connect. And I get a lot of thinking time.

So my days end up being 16hrs long. My paid work starts when most work days are 50% over and it ends when most peoples' dinners are done. By the time my dinner is done and I've decompressed, it's nearly bed time again.

Monday, February 22, 2010


Do you need a carrot to keep motivated?

Our test driving Subarus was to learn some stuff as well as serve as D's carrot to keep himself excited about extra contract work. Any extra monies he makes will go towards travel and saving for a car he really really wants.

It was useful exercise as he found out he couldn't fit into one of the cars he liked. No use pining after something that doesn't actually work. It's a good metaphor for life. Gets you out of your head.

So on the same line, do you put mental and emotional limits on your life? Are you stronger than you think?

Being tested highlights my limits. Otherwise the roll of daily life doesn't usually get me out on enough of an edge (either way) to remind myself of my limitations.

I guess that is why some people work with mediation to test their mental and physical stillness. Why some people do extreme sports, to see just how far they can go. Why some people fast just to be able to feel and overcome the fear of hunger.

I know people who engage in all of the above activities and they tell me they feel the most alive when in that zone. The most in tune with the essence of who they are. And by doing so increases their capacity of what they can handle.

Saturday, February 20, 2010

Bad Work Karma

I heard a story from a parent yesterday that made me wonder just how ungrateful some can be. The story is, their son (who is married and has children) has been unemployed for a while as their previous place of work closed.

Luckily, they got a secure job with great benefits which started 3 weeks ago.

Now they are steaming mad about this new job a lot of people would love to have, because their coffee break is 5 minutes shorter than it is supposed to a company meeting cut into that time.

Did they not suffer enough on unemployment over the last year to be happy and grateful for the opportunity to properly support their family? What (if any) is this person even thinking?

As much as I do not love what I do every single day I do it, I am grateful for it. Personally I think it is bad Karma to be dissing your new job like that.

On a fun note, D and I are off to test drive Subarus today. So if you see one whizzing by at a high rate of speed, it may just be us! : )

Friday, February 19, 2010

Mortgage Summary 2009

We received our annual mortgage statement from the bank yesterday. It summarizes what happened to the mortgage for the entire 2009 year -- where we started from, how it ended, any interest changes and how much interest was paid.

It is useful from a big picture point of view and also for people who are eligible to write off mortgage interest if they run a home office.

As I track our mortgages like a hawk, I already knew where we started and ended so that wasn't new news. What was however, was the amount of interest we paid -- how much the bank made from us by lending us money to buy our homes.

It was shocking to see our main house costing $2043.47 and the ski condo costing $721.61 for the year. I don't believe those numbers are bad at all considering the amount we are borrowing.

The falling interest rates, a hallmark of 2009 helped to keep more of our money away from the banks.

Thursday, February 18, 2010


I know it is not the full moon time of the month anymore but with the news and drama I've been hearing about, you'd think there was something celestial going on.

People we know are suddenly finding out they have cancer, others are in emotional distress fighting their own demons, some are getting signs they may lose their jobs and a few are in a lot of physical pain with no money to get help.

I know that difficulty exists at all times of day all year though it seems to hit home more when it happens around one's immediate sphere.

This is when I remind myself to just stop where I am and be grateful. As much as it can be overwhelming to feel unable to help or save everyone/everything that needs saving, just doing your best everyday with kindness helps to balance out the energies from all the injustices.

Wednesday, February 17, 2010

New Mortgage Rules

New government mortgage lending rules were announced yesterday and has me wondering how others are reacting to it. Will is really make a difference? Or will it spark a real estate buying frenzy...what they are really hoping to happen in an effort to stimulate the economy?

Basically they are going to require people who want a variable rate mortgage, like the ones we have, to be able to qualify as if they are taking out a 5 year fixed rate term (usually a higher rate). This is supposed to enable them to keep affording the payments should rates go up.

I'm not convinced that it is that much harder to quality for a fixed rate vs. variable rate mortgage in the first place. But this announcement may make people who think they are on the cusp, panic and buy without thinking before these new rules come into place shortly.

The one change I feel will make a difference is with respect to income properties. Soon, purchases will require 20% down so as to deter speculators. I agree with this one.

It wasn't that long ago when the maximum length for mortgage amortization was 25. Then they started allowing longer and longer lengths of time. We in Canada no longer have 40 year amortizations but 35 years is still allowed. I still think it is too long. It is hard to feel free when you have that hanging over your head for decades.

Tuesday, February 16, 2010

Good to Go

I listened to my gut and it has paid off. Yesterday, I finally booked a one night hotel stay in Boston on my way home from Iceland. With the flights I have, it is impossible to make it home the same day.

Normally I would have had it done when I booked everything else back in January. But I just couldn't pull the trigger for this one.

I had found a couple of hotels that would be suitable and were reasonably priced. My rule of thumb for long travel days where I'm going to be exhausted is I will pay to be in a nicer environment especially if I will only need it for a short period of time as to ensure as much as possible, I will get some quiet rest and good food.

What was tripping me up was the shuttle service/ride to these hotels. I know I wouldn't feel like calling them up. Also in the morning, it usually means I add another hour to make sure I get back to the airport in time. I really wanted to be in the hotel that was attached to the airport so I could just walk but didn't want to pay $250US.

Something told me to check yesterday and for some reason, the advanced prepay rate had dropped to $119US. I took it and other than the transfers from Keflavik airport to Reykjavik, which I plan to buy once I land, I am pretty set to go.

Monday, February 15, 2010

Write Offs

Well, I wouldn't let myself do anything fun this morning until I got my 2010 bookkeeping started on Quicken. Each year requires a bit of an initial start up to set up the accounts I will be tracking and then the rest of the year is pretty easy.

The work itself doesn't take much brain power at all, just takes a little time. Because I am still using the 2001 version (I refuse to buy a new program when the older one does what I need), it isn't "smart" enough to carry over the same accounts year after year... or maybe I'm just not smart enough to figure out how to do it yet...

Either way, I'm happy to report it is set up and January's numbers are in!

Going through my tax categories brought something to light. The depreciation on my office equipment and vehicle are getting pretty low. Soon, I won't have any amount left, which technically means my stuff isn't worth anything anymore.

I know of a colleague whose bookkeeper told them it is time to buy a new car and to do some renovations to get some write offs because her depreciate numbers are nearing zero.

Personally I do not agree with spending money just to get a write off when the stuff you are replacing is just fine. I'll just deal with less to no depreciation which means slightly higher income taxes.

Friday, February 12, 2010

Everyday Stuff

One financial milestone I'm excited to be hitting this year is a five digit main house mortgage amount. There is something therapeutic about not seeing 6 digits I'm looking forward to. A bit of extra breathing room you might say.

Someone I know who is in banking told me in a recent meeting that their bank forecasts a 2.5% increase in mortgage rates this year and 1.5% increase for 2011. If it were to be true, our rate would rise to where it was 2 years ago when we bought this house -- 4.5%. Oh well, what will be will be. One thing for sure, we would have taken advantage of the lower rates by paying extra so no regrets that way.

Since my last post on the negative and complaining person, I have found myself surprisingly more up. I have new found appreciation for my life. There is not much truly worry some. It is beyond my comprehension how it would feel to be that negative. I've felt fairly down at points in my history but I cannot say the same for prolonged negativity. Man, am I happy about that!

D and I celebrate the date of our first date monthly so Valentine's day is just another excuse to do something else fun. We are thinking of a day trip this weekend. Anyone going to celebrate this weekend?

Thursday, February 11, 2010

Out of Patience

Sometimes it is just easier to not engage with someone who is argumentative or has to be "right". D and I have an unhappy "friend" (I believe that is no longer the case) who make everything about her. As she works mainly as a hobby, she has plenty of time to dwell on why the world doesn't send her the happiness she deserves.

Historically, she wasn't always this way. Life's "challenges" (in the form of not having enough vacations or boyfriends that care...) has hardened her to a not very likable person. Everything is about her comfort and her problems and why she has not been able to find someone who loves her enough to marry her and make her into a mother.

Our patience has just run out.

The harder I work, the more difficulty I have empathizing with people who "make stuff up" to worry about. I'm talking about someone who is very educated and worldly and has had more financial benefits then I'll likely see in my lifetime.

That doesn't make up for what I feel she didn't get -- Humility, tact, empathy, joy and self honestly. It goes to show you, money isn't everything.

I find it very useful to look at myself objectively to see what I am portraying out to the world. Am I behaving in a kind manner? Am I acting like a person other people would like to spend time around? Am I attracting goodness or repelling it? Sometimes the common link to not getting what you want is yourself.

Wednesday, February 10, 2010

New Idea

I hit on an idea the other day I'm pretty excited about. Because I haven't actually worked out the cash flow logistics of it, I cannot say if it is viable.

The idea is staying with working 3 days a week once the mortgages are done but take 1 week off each month. This is in contrast with what I was thinking of doing, which is work 2 days a week the entire month.

Preliminary thoughts show a potential of enough income to fund the week off which would likely end up being a travel week somewhere. Whereas, if I were to take a week off while working 2 days a week, the budgeting gets tighter (6 working day month vs. 9).

I'm intrigued enough with the idea to think it through further. It looks like it will fall somewhere in between where I am currently and where I am planning to go.

Tuesday, February 9, 2010


I saw 2 different money role models growing up. My mother is a saver. My father felt entitled to buy collectibles because he worked so hard and long.

Neither parent is particularly happy, they just dealt with it differently. So that got me thinking about entitlement and how we respond to it.

Both parents affected me equally. I am able to sacrifice and save but I can also justify treating myself to a great meal out as a reward for a good month at work. (I am not into collectibles)

The influences I've picked up from them I want to be rid of include being a martyr and being overworked. Neither states of being promote balance and happiness.

When things got more prosperous for our family, they were not able to relax into enjoying life. The old habits were too ingrained and they found out they no longer understood each other, much less their children.

The current displays of entitlement I see in younger and fully formed adults seem different. Rarely have I seen examples of where it stemmed from overworking. Often it comes from people who aren't working enough. Credit has a lot to do with it I'm guessing and maybe even TV.

Monday, February 8, 2010

Stop the Whining

It looks like I will not be able to avoid having to shovel snow before D comes home from his trip. We have had such a mild winter, I was beginning to take if for granted. I have owned a snow blower in the past but now I go manual. Being on a corner lot with a driveway that can house 6 cars, there is a lot of area to cover. I do a pretty good job especially now that I walk, I am even more sensitive to sidewalk quality.

We know a number of people who come from fairly wealthy families ie. wouldn't have to work for a living wealthy. When money worries are not part of your life ever, I've found them to sometimes come across like they are insensitive to the everyday finances of "ordinary people". So their tolerance to being told "no, I cannot participate in that activity/trip/etc" can be low.

Sometimes they will whine or spring into a lecture about how they feel is the best way to do such and such and not realize that the person they are talking to already know that but are not able to execute plans in such an ideal way because of time and money constraints. I have even known such people to start complaining about the minutae because they just have too much time on their hands. I'm not convinced that I would want to trade places with them, even if it meant I would not have to work for a living.

Sunday, February 7, 2010

Giving Back

I just heard of an opportunity for a build with Habitat for Humanity right in my own city. First thing tomorrow I am going to call and see if they still need people to help. If so, I'm signing up D and I.

Before Christmas, I spoke with an administrator for our local branch of Big Brothers and Big Sisters to see if there was any need for volunteers. Apparently there is a waiting list for our city and the surrounding area.

D has been a big brother for almost 3 1/2 yrs in the past whereas I've never been involved with them before. My experience is with volunteer tutoring at a half way house for teens convicted of violent crimes. It was a memorable experience.

We are getting ready to give back again in a way that doesn't necessary involve a lot money. It will be hard not to want to give too much. Back when D was involved, he didn't have a lot of money so the activities were shooting hoops etc. with his little brother.

Now he is able to offer more. I guess it is something we will need to discuss during the interview. If everything goes well (I can't see why not), I would be open to learning more about becoming a foster parent.

Saturday, February 6, 2010

What If?

Don't get me wrong. I am not being morbid here.

When I find myself alone (not sure if D does the same when I'm gone...), I wonder whether I would still be living in this house on my own?

I know I eat differently by myself -- even simpler and with even less meat.

To answer the question, I do not think so. I believe I would find this house too large for just me. It wouldn't have been something I would buy if I was single. I have never bought a house with the thought of it being a good one should I end up in a relationship so why start now?

Last night, I actually thought I would consider hiring someone to clean should I wish to stay here on my own. Housework is not one of my fortes.

The cottage would be sold. I would have no interest maintaining it on my own. If I chose to stay in this province, I could see myself looking for something else. If I don't want to hang around, then I would move out west. I wouldn't sell that property.

No, I'm not looking for an exit strategy. And they say that when one goes through huge emotional upheaval to not do anything rash for a year after as you may not be thinking straight enough to make such big decisions.

Isn't this train of thought why we make wills?

I strongly suspect that neither one of my parents have wills. It is a weird superstitious belief thing. You cannot even bring it up. They believe that drafting a will means they are ushering their own deaths earlier.

Maybe my willingness to analyse everything comes from my wanting to get away from such illogical thinking.

Oh yeah, our next trip destination has been firmed up -- Berlin! A great excuse to learn some German.

Friday, February 5, 2010


There will be a little extra bonus money this month, to the tune of $154.92 net, based on January earnings. Overall 2010 has been slower than '09. Everything is still balancing so not worried.

I have been thinking about what we'll do should mortgage interest rates go up. Where will the increased regular mortgage payments come from? Because we allocate monies to the penny in advance, I will have to juggle something else to make it work.

So what will decrease? Not sure yet -- likely our travel fund. I don't wish to decrease mortgage prepayments because they will slow us down a bit. In the end, it will depend on just how much payments increase that will determine the length we'll have to cut back on other things.

D has been encouraging me to come up with some ideas for a side business. I'm really not qualified to do much outside of what I do so the only thing I've come up with is some freelance work.

Right now, I haven't the energy to make the idea real though summer time may be the right timing for me to work on content for a web page and brainstorm about my target market etc.

Thursday, February 4, 2010

Fun Times

I'm flying solo for the next 6 days as D is off on his guys' ski trip. He sent me an email earlier today about how tired he was after his double black diamond ski lesson. Turns out his instructor grew up wind surfing at our cottage beach! What a small small world!

On a really humorous note, I have received a few "awards" from Livemocha, the site I'm using to learn Icelandic. Apparently I have been the Icelandic student of the week for 2 weeks in a row... although I think I may be the only one learning it right now... Don't ask me how to say "I am lost" because I haven't learned it yet but I can say "I am going to be climbing a ladder"... :)

It appears I have made a bit of a mental shift with respect to work. I find myself enjoying it more. Not being overly busy has its advantages. I may not be making more money than last year at this time but I don't feel as beat up afterwards either and that is worth something to me.

Wednesday, February 3, 2010


A classmate of mine recently paid their last student loan payment. Because I haven't thought of the concept of a student loan for so long now, over 10 years, the news stunned me. I recovered quick and congratulated them on a great job.

This news hit home as we were in the same class and have both been out in the work force for over 10 years. It was the sheer length of time that blew me away. I have a very hard time with the concept of a monthly payment for that long. Especially when added to other common monthly payments such as a car, a house, utilities, savings, etc.

It isn't that I didn't have students loans. I did. Probably not as much as they do but enough to take 10 years should I have allowed it. In Canada, back in my student time, banks amortized loans for 10 years. I understand that 15 year terms are available now. When I found out that my monthly payments were going to be $900 a month for 10 years, I freaked out and pushed myself to get it paid off in 1 1/2 years.

Even then, I could not stand monthly payments. I also have never amortized a house for longer than 9 years. And I find myself feeling very impatient for the next 3 years or so of mortgage payments to be over even though technically they are D's payments and not mine. I'm just putting in extra because I cannot stand to see it.

Gail Vax-Oxlade's post earlier in the week gave 2 quotes I copied into my day timer to remind myself that I need not have to rush so. Rushing things in the past and present have contributed to my stress levels and burn out. It isn't something I would honestly recommend. I'm afraid I must have some version of a obsessive compulsive disorder -- Some force that propels me to extreme, sometimes self defeating measures.

Whatever it is, it's not easy to change and I have worked very hard to dig it out of myself over the years, once I realized that most people do not approach debt like I do and perhaps are happier for it. I'm very glad D is as laid back as he is because it helps me to swing back towards the middle of the road. It is no accident I call myself Middle Way as a reminder of where I would like to be on things like this.

Tuesday, February 2, 2010


I have not been great at succeeding in making stock (veg, chicken, beef) of any sort yet. I end up buying the canned stuff and it adds up.

Recently, D talked me into using the powdered variety and it has worked pretty well. Our costs dropped by over 50% and it tastes mostly the same even though it is from the same company -- Knorr.

I received a couple of compliments from one of my friends the other day. When I told them that I track the Bank of Canada rate like a hawk, they exclaimed "If you are worried about mortgage rates going up, then 99.9% of Canadians are going to lose their homes!".

Later in the week, they asked who we use for car insurance and when they called to get a quote, they couldn't believe how much lower it was. They told me that they will just turn over all their finances for me to handle.

For the record the person saying this is very responsible financially and far far ahead than most their age. They will be mortgage debt free in 3 years and are only in their very early 30's. They do not need any financial help. I find their determination inspiring.

D is considering moving some of his non registered money into registered, like what I did in the fall. What that will mean is it will be considered an RSP contribution and he will get a tax refund in the mid $1000.

Most financial planners will have you reinvest your refund or use it to pay down debt etc. What does D want to do with it? He wants to come on the next trip with me.

We had to sit down and calculate just how much we have in non reg. assets and if we are comfortable with that number. Once monies are shifted in RSPs, it is not supposed to moved or used until we are retired as there are fees for withdrawal etc. My earlier move and this potential move affects our liquidity.

Monday, February 1, 2010


Our Costco membership expired at the end of Nov/09. From a reader tip, we bought a cash card that will allow us to shop there without a membership. We have not used our card yet. Surprisingly, we have been getting good deals from our local grocers and have not really missed Costco.

In fact, we have found that some items we had been buying (ie. brown sugar) are more expensive than our local bulk food store. It's too soon to tell if we will not bother ever renewing our membership.

There are a couple of people I know who are entertaining the thought of working in Europe. Funny enough, after hearing their stories, I stumbled on an ad for a position I would be suitable for overseas. D is encouraging me to look into it. After all, we aren't tied down here.

I don't have any real details but my guess would be they are looking for someone to run the whole division and the hours of work per week would be like I was starting at the beginning again. So would a new location, higher pay (with higher cost of living) and new challenge outweigh the amount of work I would like to do at this point of my career?

I would love to live in Europe and we have sufficient assets to be able to buy a place to live if it turns out to be a permanent thing. It's neat to mentally consider the ins and outs of it. I'm not sure though if I will pursue this any further. Some days I'm itching to start new elsewhere. Some days I like my routine. I just hope I'm not getting complacent.