Road To Retirement Update

I've been very busy in the last few weeks, as you might have noticed by the lack of posts. I'm trying to get everything finished in our yard before the cold weather hits next month. A lot of money has been spent this summer on our yard and the coffers are lower then I'd like them to be. I'm going to initiate a savings spree over the winter to get back on track to maximize our TFSA and put extra money on my wife's student loan. I can hear my wife sighing with excitement already!

We were carrying two mortgages for the first 5 months this year and we were so relieved when our condo sold in May. It set us back quite a bit financially and it took us a few months to get back into our regular savings routine. My goal was to put an extra $1000 down each month on our mortgage but because of the setback, I'll only be able to put $5000 down this year. That means I'm going to have to try and make up the difference next year. I guess I could always play guitar on the street corner and jam with that guy who plays the nose flute...

As for my wife's student loan, we are on track for paying it off in one year's time with $1000 being paid down each month. Once her student loan is paid off we can redirect the money towards more suitable things like paying off the last vehicle, paying down the mortgage, maximizing TFSAs or putting it towards the baby fund. We are very blessed to have two well paying jobs and could not be moving this fast to retirement without them. I know once we have kids things are going to change big time when one of us stops working, but with anything in life you have to hang on and take the good with the bad.

At this stage of our lives I thinks its more important to focus on debt repayment rather then investing, especially with all the recessions and economic uncertainty. Paying down debt is a guaranteed return on your money and once it's gone it can take a lot of excess worry off your plate and let you enjoy life to its fullest.

What stage are you at in your own road to retirement?

Give Credit Where Credit Is Due

It seems that "Saving" has become a dreaded word these days. Since credit is so easily available from multiple sources it gives people a false sense of wealth so they splurge and buy what they want, when they want it. From an early age I was taught you can't always get what you want and I thank God my parents raised me that way. Too many people use credit like it's free money and they don't seem to feel the repercussions until it's too late.

Minimum Payments Are For Chumps

One of the worst things I've heard someone say is, "I have room on my credit card to buy it". They think they can afford the new purchase, but what I hear is that they are carrying a balance close to their limit and they love giving away free money each month. I bet if you asked the average person on the street, they couldn't tell you what the interest rate is on their credit card(s), yet they gladly fork over money month after month upwards of 19-29%. That's an insane amount of money, especially when they banks won't even give you a 1% return in a normal savings account. Let's say you carry a $3000 Balance on a credit card charging you 19% a year.

Credit Card Interest Paid:  .19 x 3000 = $570 a year

That's a nice romantic weekend away or a good chunk of a big screen TV that your giving away because you're "livin' the life" with money that isn't yours to begin with.

Learn How To Use Credit

I have a dirty secret to share with you: I don't know what my credit card interest rate is. More importantly, it doesn't matter what the rate is because I pay my balance off every month. I use my credit card the way it's supposed to be used, as a tool for purchasing and not a high interest rate loan. The first step towards a good credit card mentality is to realize that you can only spend what you make. If your bills add up to more then you bring home in a month then you are living beyond your means. If you need to use a credit card to make it through the month then you are living beyond your means. You better cut back on frivolous spending or you're going to regret it

Make a budget and stick with it. If you find yourself heading towards a spending spree think about the consequences of your actions. I like to imagine money being thrown into a furnace when I start spending foolishly with credit. It helps me realize that the money I spend on interest is just a wasted expense.


If credit is a real problem, it's probably a good idea to only use credit cards when you have to like booking airfare, concert tickets or online purchases. Using cash lets you physically see your money being spent so when the stack starts to shrink, you begin to think twice before making purchases.


Do you have control when it comes to credit?

Dividend Income For August

Where did the Summer go? It seems like I just got home from Nova Scotia and now August is over. Well in that case I thought I would start updating my passive income for each month. This is proof to all the non believers that investing in dividend paying stocks actually works and you can see the income increases as more stocks are purchased and dividends are re-invested.  August dividend income isn't the highest, it's about one third of what I normally make in dividend income a month, but it all evens out in the end.

Dividend Income For The Month Of August

Shaw (SJR.B)         $15.33

Royal Bank (RY)    $54.00

Emera (EMA)         $32.50

Total                       $101.83

Now as the rich people roll their eyes and click the X, I'll show you what my dividend income was two years ago.            

Total                        $0

Now I'll show you what my dividend income was last year.

Shaw (SJR.B)         $14.66

Royal Bank (RY)    $ 50.00

Emera (EMA)         $ 28.25

Total                       $92.91

All three companies I chose, as a rookie investor I might add, increased their dividend from the following year. To the average person reading this, an increase of $8.92 might not seem that impressive, but that's an increase of 9.6% and I did ABSOLUTELY NOTHING to get it. I was probably eating or on Facebook when the dividends were deposited into my account; it's that simple.

Now that I have $101.83 for doing nothing but being handsome, I'll throw it on the pile of previous dividend payments and let it grow until I buy more dividend paying stocks and keep the cycle going.

Stock Market Decline In August?

The stock market plunged? Oh, I hadn't noticed because I was on vacation in early August. What I did notice was that some stocks I had my eye on were on sale so I bought some. I increased my position in Sun Life and  bought into AGF management. I wish I had more money to invest, but I had other expenses with the new house. You never win when you play the stock market, but you can make money when you invest wisely. The smart way to spend money is to buy when something you want is on sale, right? Why would it be any different when you are buying stocks. I believe the Intelligent Investor said to buy when everyone is selling so that's what I do and it makes absolute sense. Well enough investment jibber jabber, time to go enjoy my well earned day off and make the most of my four day weekend visiting family.

Have a good weekend, everyone!