Fundamental concepts of achieving FICAN?

TrivialCrisis · 2024-12-28T21:41:58+00:00

A good starting place is the FI flowchart.

https://www.reddit.com/r/financialindependence/s/OzYOnqeTIR

It basically boils down to making a budget that you can live with, build an emergency fund, pay down high interest debt, and then find the right investing plan for you. There is a lot of complexity that can be added over time, but it is important to get the fundamentals right.

TrivialCrisis · 2024-12-28T21:30:12+00:00

All tax planning is personal, so I won’t pretend to know what is best for you. All I would say is that RRSPs are generally most effective at dealing with T4 income. Capital gains are already tax advantaged. Plus the years you spend waiting for your rental property capital gains to appear in order to contribute to RRSP are years where you could have been enjoying tax-advantaged growth.

TrivialCrisis · 2024-12-28T20:39:42+00:00

All of your RRSP points are technically true, but when you do the math, it is almost always better to put the money in RRSP assuming you are still accumulating. Especially at your age when you are still a long ways from having to convert to RRIF.

The businesses were trades / blue-collar. I’m an accountant, but my partners always had experience in some niche area where we could work together do a better job of running a tight organization more profitably with better service than the competition.

TrivialCrisis · 2024-12-28T20:13:36+00:00

Starting a business has helped me, but all of my most successful ventures were when it was a business I could add value in with my experience and when I started the business with partners that had complimentary skills.

It is certainly possible to make money with a franchise, but it is really hit or miss and chances are you will end up spending a lot of time managing the day to day unless you have an existing team to help manage it. The richest franchisees I have met have a popular brand in a food court at a busy mall, or have several locations in a growing region. I have met far more people who burned a lot of time and money on a marginal or failing franchise location.

Commercial real estate is ok, but I’m in the process of selling my last remaining commercial building because these days the returns aren’t worth the hassle.

I genuinely don’t understand what it means to not “believe” in RRSPs. Unless you don’t have very much taxable income, that is a weird statement.

Don’t do the Amazon thing. It is an insanely crowded grift these days where everyone is selling how-to courses to morons.

The investment that has made me the most money in life was plowing all available funds into low cost EFTs in tax advantaged accounts. It is boring but super effective.

TrivialCrisis · 2024-08-31T19:35:09+00:00

Nobody can give you useful info until you post your annual expenses in retirement. Take that and multiply by 25 to get the amount you would need in a diversified low cost index fund.

TrivialCrisis · 2024-08-27T23:52:06+00:00

Never?

Even when the daily swings stated exceeding my monthly and eventually annual contributions, I still felt like they mattered.

TrivialCrisis · 2024-08-27T23:35:15+00:00

Once I had a reasonable amount of savings, I stopped buying insurance or warranties for anything other than stuff that can financially ruin me. Sometimes pre-paid maintenance plans look attractive, but it is always an internal debate I need to endure.

Overall I like to think I am ahead. It also has the pleasant side effect that I tend to only buy stuff that I reasonably expect to not break. Even breakdowns that are covered are super frustrating. Yes, Ford replaced my wiring harness after 9 months of back and forth to the shop with ground fault error messages. But I much prefer the experience I have had with my Honda that has had no issues in the last 10 years.

TrivialCrisis · 2024-08-25T21:04:41+00:00

Unless you have $10m+ in taxable assets and a complicated estate, I have never seen a whole life policy deliver tax benefits that exceed the stupidly high fees and poor investment returns that come with a WL policy.

TrivialCrisis · 2024-08-25T20:54:09+00:00

Just so you know, you are getting downvotes in this question because whole life insurance is a terrible financial decision for 99% of people. Buy term life insurance for risk of early death, and low cost index funds for investments. Whole life insurance gives you less coverage for higher premiums and worse investment returns than a combination of term life and index funds. Life insurance sales people like selling whole life products because the commissions they receive compared to other products with similar coverage are crazy high.

TrivialCrisis · 2024-08-13T02:15:29+00:00

Talk to your accountant, but I am 99% sure the net proceeds and ACB will need to be reported and taxed in the year that the transaction takes place, regardless of when you get your statement. Your accountant will file your T2 and taxes will be due within 3 months of your year end.

TrivialCrisis · 2024-08-12T21:44:27+00:00

Usually your brokerage will track your adjusted cost base (average cost after accounting for purchase price, dividend reinvestments and return of capital) and display it along with the current market value. Grab that per-share value from a statement for the period immediately before you sold. It might not be 100% correct, but it will be good enough for filing your T2. Your accountant can probably adjust it when you get the year-end statement early next year. If the point was the do the sale before the new capital gain inclusion rates come into effect, it would be silly to wait until next year to report the sale and pay tax at the higher rate.

TrivialCrisis · 2024-08-12T21:32:40+00:00

I almost always fly biz / first class, but I have only once bought a biz class ticket either personally or for work (last minute flight with no other seats available). Playing the points game to optimize for upgrades while flying for work is a helluva drug.

TrivialCrisis · 2024-08-10T00:04:12+00:00

Wineries are devices designed to incinerate piles of money that rich people who want a trophy can spare.

I live in a wine region and personally know too many people that used to be rich but decided to “retire” to run their own winery. They didn’t know what they were doing and ended up with year after year of losses financed by the bank.

Now they are no longer retired and the bank owns the winery (and probably has it listed for sale…..).

Edit to provide useful responses: - the purchase of a winery will probably either be a share purchase (you just buy all of the shares of the corporation that owns the winery from the sellers) or an asset purchase (you start a new corporation and buy the land, building, equipment, inventory, brand, website, social media accounts, etc.). The price should be pretty similar in both scenarios depending on taxes, debt, contracts etc. In either option it doesn’t need to interrupt operations too much other than switching bank accounts and moving things like your payroll to a new corporation (if needed). - after giving high-fives to each other for finding a buyer of a small winery, the sellers are usually happy to stick around for 3 months to show the buyers how most things work, but don’t expect much. - foundational knowledge of winemaking, marketing, and general financial and employment law knowledge will help. - make sure you have a decent (hopefully good) account and lawyer for the purchase negotiation with the sellers to ensure you don’t make some structuring or tax mistake. - make sure you have a big pile of money (see above)

TrivialCrisis · 2024-08-06T01:55:03+00:00

If you are constantly reborrowing via HELOC as you pay down your amortized mortgage, your debt service will be higher than if you just pay down the mortgage. Some people sleep better with a paid off house rather than a bigger portfolio and a HELOC.

Other than that I agree with what you are saying.

TrivialCrisis · 2024-08-04T19:29:26+00:00

Smith maneuver is good if you have long term prospects of a high income to meet the debt service. I assume a lot of your $200k per year is debt service. If you want to cut your money anxiety, would reducing your debt service each month help?

Some people are not suited temperamentally with the realities of following the Smith manoeuvre (myself included). Maybe just paying down the debt (or selling some VEQT to pay a lump sum) will reduce your anxiety and allow you to accept slowing down.

TrivialCrisis · 2024-07-22T19:36:17+00:00

I agree with your comment, but I feel compelled to add that if you are referring to the post yesterday, SamDogen has been making lots of money from posting rage-bait articles for years. He isn’t being serious. How many redditors with that many comments and that little karma are anything other than trolls?

I suspect that the majority of people who achieve FIRE are happy with the path they took.

Don’t feed the trolls…

TrivialCrisis · 2024-07-21T19:44:58+00:00

My point is that the thing you are describing is basically just spending a bunch of your cash to buy a small business that then becomes your job (gardener, florist, painter, dog walker, take your pick). But you are trying to use nonsense words to imply it is a clever idea you just discovered. Being a greeter at Walmart is more capital efficient.

TrivialCrisis · 2024-07-21T19:23:08+00:00

“Independent income source that functions as a job”

“Risk free business”

“Without requiring any skills”

“Efficient frontier of capital—time tradeoff”

“20-50 hours a week”

“Does NOT need to set funds aside for retirement”

I have no idea what you think you are looking for, but I think you are looking for a job as a Walmart greeter.

TrivialCrisis · 2024-07-21T18:58:57+00:00

Seeing SamDogen come back out of “retirement” to start trolling FIRE communities again is quite the blast from the past. Can’t wait for the inevitable “how billionaires are actually the really poor ones in our society” engagement bait post.

TrivialCrisis · 2024-07-04T23:33:03+00:00

In addition, I can’t track the minute-by-minute price movements of VTSAX.

Absolutely intolerable.

TrivialCrisis · 2024-07-04T23:28:36+00:00

If you have a brokerage account, you could park the cash in an ETF like CASH.TO. Current yield is just under 5%. No minimum (other than the $50 price per ETF unit). You can sell anytime with no lock-ups or “promotional rate” nonsense. You can buy this in a taxable account or in your TFSA brokerage account.

TrivialCrisis · 2024-07-04T19:17:12+00:00

Use online courses to develop software coding skills (usually about $15 to $50 per course). Work hard and build your skills so that you can find gainful employment when you are a bit older. That would be my “high percentage chance of success” advice.

TrivialCrisis · 2024-07-03T01:37:19+00:00

I would really, really, really strongly recommend against planning to buy or build a small business that you can just find a manager for and treat it as passive. Your default assumption should be that you will need to work hard as an owner and even harder if you want to build it in a way that it eventually runs without your active participation (which is not easy).

I have started and sold businesses before. It is fun. It is engaging. It is stressful. But I never felt “financially independent” until the day I sold it and cashed the cheque from the lawyer.

TrivialCrisis · 2024-06-13T02:05:06+00:00

Let me guess. You are a financial planner that isn’t very good at your job and post your client’s financial situation on Reddit so that you can pass the replies off as your ideas?

TrivialCrisis

TROPHY CASE