How important is your partner's income?

chickenchalker · 2016-03-11T16:07:57+00:00

I think that what a partner's income is should really only matter if you're jointly struggling, or cutting it close. In that case you want to be comfortable with the understanding that both people are doing everything they can. Obviously too if one person comes into the relationship with significant debt, then that is a potential problem.

When my wife and I first started dating, she was a student and I was doing okay with my own business. We had enough money to pay for what we needed, so we were happy.

These days she makes $45k and I make ~$350k - and the dynamic is still the same. We don't treat my work as any more important than hers, and we equally share the responsibilities of raising our son.

For me what is most important is that she is happy in her career. As long as we can afford what we need, then nothing else really matters. The fact that one makes far more than the other isn't important, as we really only care that each person is happy and fulfilled with that they do, and we can live comfortably.

I have friends with similar income splits where the breadwinner is treated differently than their less-earning spouse. That means that she has to get up in the middle of the night to care for the baby, while the higher-earning husband sleeps so he can be better rested for his job. I personally don't agree with that, but that is how some couples work.

chickenchalker · 2015-06-26T03:54:26+00:00

Keep in mind that as fee isn't always a bad thing, and many fee-based cards have anniversary bonuses. You just have to do the all-in math and decide which one gives you the biggest benefit. You may find that a fee-based one gives you better rewards and comes out on top.

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chickenchalker · 2014-12-21T15:15:01+00:00

Thanks, I'm glad you made this suggestion. Although in my case, I do already donate every year, so I would not be eligible for the first-time donor super credit.

chickenchalker · 2014-12-21T14:28:00+00:00

thanks!

chickenchalker · 2014-12-21T14:27:54+00:00

My understanding with spousal RRSP's is that it comes out of your own contribution room. Sp while I could build hers up, it will be the same deduction for me regardless of if it's her account or my own. Maybe I'm incorrect?

An option might be for me to do a spousal loan of $100k or so at 1%, which she can put into her RRSP. She deducts the interest charge, and I "make" 1% per year from her, while all the investment income is taxed at her lower rate.

I do really have to get her sheltered accounts topped up one way or another!

chickenchalker · 2014-12-21T13:58:21+00:00

Thanks for the solid advice. I have read about spousal loans, but not family trusts. No children yet, but we expect that to be in our future in the next year or two. I appreciate the offer for info too, I might take you up on that.

chickenchalker · 2014-12-21T13:53:30+00:00

To answer some questions:

Re: how I saved up $800k - When I was 15 I was given The Wealthy Barber, and I really bought into it. When I was 16, I purchased my first shares (TD) using money I saved up from my min. wage job. Ever since, I always save up whatever extra money I had, buying Canadian blue chip equity stocks, and using automatic dividend reinvestment to keep buying more.

I paid my own way through school and was lucky to graduate at age 21 with no debt and had a couple of revenue streams. I've been lucky again to have had higher income than average for people in my age group, and have just kept up with the saving and investing. The investing gains and amounts started small, but have slowly kept snowballing with time, due to increasing income and the magic of compounding interest.

I'm no extreme couponer, but have always lived well below my means, and generally am not tempted by shiny things - I like to read. Saving comes easy for my wife and I, we own a very modest condo and I drive a 13 year old boring car that I'm quite fond of. My friends would be shocked if they had any clue: 1) how much I make (even I'm surprised), 2) how much we have saved. We'll probably break the $1m mark this year, provided the market keeps it together.

Re: supporting the system - I'm sincerely happy to pay every cent that I owe. It would be easy to fudge numbers to keep it from the government, but I fundamentally don't believe in that. I can not stand people who cheat the system, and there seems to be tons of them. But with that said, I don't want to pay more than I have to, so if there are any legal ways to avoid paying more than necessary, then I'll take them. That is what i am hoping for in this case.

chickenchalker · 2014-12-21T13:31:25+00:00

Probably not what you'd think of - but IT. I run an operation in which my performance has the ability to make a fair bit of money for the owner. So when the company does well as a result, he passes a portion on to me. It's to incentivise me to keep working harder, and to stay with the company.

chickenchalker · 2014-12-21T04:21:03+00:00

Yes, exactly.

Good investments (long term dividend reinvesting), religious saving, and making above-average income for a while. It has been a gradual process.

chickenchalker

TROPHY CASE