YVR checking in

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malindi
Posts: 6
Joined: Wed Oct 17, 2018 1:36 am
Location: Vancouver, BC

YVR checking in

Post by malindi » Wed Oct 17, 2018 11:14 pm

Hello,

I’ve been looking around for some like-minded people.. Maybe I found them here 
At the end of March 2019 I am pulling the plug on work life … Lots of plans for my non-working life (I’m 50).
Since 1998 I’ve kept track of my expenses, down to the last quarter. I have my monthly cost down to the last cent as you can imagine (including a monthly allocation for a 5 yearly expensive watch battery replacement.. yeah, I love details)

I live in Vancouver, BC, one of the most expensive places to live so I rent and have for all of my life. My rent is under rent control here so making a change from my location and/or apartment would double if not triple my rent for a much lesser setup than I have now ($1,450/month, 2 parking spots and a 270 degree NW view from high up in the West End) Aside from my (small) personal investment income I have a fair bit of income from my business, which after March will comprise only of eligible dividend paying income which I can flow through tax free to myself.

I am looking for like-minded people in a similar situation, with a mix of business income and personal income.

Also, I am trying to figure out what to do with the SWR … mine is negative, in that I collect more money (just) than I plan on spending. If I spend 17.3% less than I have done over the last 10 years on average then I break even on my free cash flow. On top of that I generate $816/month in a tax free (RRSP) savings account that I only (by law) have to start drawing on when I turn 69 I think. That money gets reinvested every month. I probably will get some OAS (qualify for the full 40 years) and a sprinkle of CPP at 60 or 65 (not sure), although most of my life I have been self-employed. No kids or SO.

My challenge is that I am unsure what my daily nut is going to be in retirement as I currently eat out nearly all the time except breakfast (it does not pay for me to shop and cook … working a bit more covers the time and hassle easily).

I’ve been living like a student most of my life (rental place, cheap 1999 Accord…) so I have been conscious to escape the big consumption traps (cars, toys, marriage, kids etc.)

So my questions are the following: If I can get a negative SWR, what sort of metric or goal do I aim for? Are there others in BC that are in a similar situation (company and personal income)? Is there a Vancouver ERE group? I didn’t immediately find one.

Cheers,
Malindi

wolf
Posts: 876
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: YVR checking in

Post by wolf » Thu Oct 18, 2018 5:44 am

Welcome Malindi! Interesting introduction. Vancouver...great. I'd love to see that city/area one day.
How can you have a negative SWR? I thought SWR is expenses divided by net worth?
Well...what are your own goals and ideas for the next 5-10 years. With such a positive cash flow you could probably realize some of your dreams.

2Birds1Stone
Posts: 678
Joined: Thu Nov 19, 2015 11:20 am

Re: YVR checking in

Post by 2Birds1Stone » Thu Oct 18, 2018 8:36 am

malindi wrote:
Wed Oct 17, 2018 11:14 pm
So my questions are the following: If I can get a negative SWR, what sort of metric or goal do I aim for? Are there others in BC that are in a similar situation (company and personal income)? Is there a Vancouver ERE group? I didn’t immediately find one.

Cheers,
Malindi
You can aim to be the richest person in the graveyard......or you can focus on relationships, physical fitness/health/longevity, finding a new purpose in life, possibly some causes to direct all of this wealth toward.

Looking forward to following along.

malindi
Posts: 6
Joined: Wed Oct 17, 2018 1:36 am
Location: Vancouver, BC

Re: YVR checking in

Post by malindi » Thu Oct 18, 2018 9:50 am

Wolf, with a negative SWR, what I meant is that I am not touching capital for my expenses; everything is covered from income. 2Birds1Stone, I do have that sort of goals :-)

My question was more related to what sort of metric I need to aim for with regard to an inverse glide path. i.e, what should my savings rate be (take-off velocity) to maintain a buffer in case (when, not if) the market corrects again before we all take a dirt nap. I guess it's an impossible question really.

prognastat
Posts: 1000
Joined: Fri May 04, 2018 8:30 pm
Location: Texas
Contact:

Re: YVR checking in

Post by prognastat » Thu Oct 18, 2018 9:54 am

Welcome to the forum, definitely interested in how you would have a negative SWR.

Only thing I can think is that you generate more non stock market investment income than you expenses and thus actually add to your investments rather than drawing them down?

EDIT I see you posted just that XD.

Most here would probably recommend somewhere around a 3-3.5% SWR to ensure you don't run out.

wolf
Posts: 876
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: YVR checking in

Post by wolf » Thu Oct 18, 2018 11:30 am

I understand what you mean with the "negative SWR" now.
malindi wrote:
Thu Oct 18, 2018 9:50 am
My question was more related to what sort of metric I need to aim for with regard to an inverse glide path. i.e, what should my savings rate be (take-off velocity) to maintain a buffer in case (when, not if) the market corrects again before we all take a dirt nap. I guess it's an impossible question really.
...not impossible for the ERE-forum ;-)

I found this guide very interesting regarding the glide path. Maybe you have a look.
The Ultimate Guide to Safe Withdrawal Rates – Part 19: Equity Glidepaths in Retirement
and this one The Ultimate Guide to Safe Withdrawal Rates – Part 12: Six reasons to be suspicious about the “Cash Cushion”
Btw, the whole series of ERN is quite good.

edit: added another link

malindi
Posts: 6
Joined: Wed Oct 17, 2018 1:36 am
Location: Vancouver, BC

Re: YVR checking in

Post by malindi » Thu Oct 18, 2018 8:32 pm

Thanks Wolf, that ERN site is indeed interesting.

thrifty++
Posts: 856
Joined: Sat May 23, 2015 3:46 pm

Re: YVR checking in

Post by thrifty++ » Fri Oct 19, 2018 1:34 pm

WOW your living situation sounds amazing. The West End of Vancouver is one of the most beautiful places in the world to live. And that is a cheap price . Are there legal rent controls in Vancouver? I have heard of other people paying less than half the market price when they live there long term.

malindi
Posts: 6
Joined: Wed Oct 17, 2018 1:36 am
Location: Vancouver, BC

Re: YVR checking in

Post by malindi » Fri Oct 19, 2018 4:48 pm

Hi Thrifty. Yes, the rent control is set by the government's tenancy branch. For next year, it is capped at the rate of inflation, 2.5%. Indeed, getting my suite now would cost about $3,000 plus parking. It's both good and bad ... I can't really move anywhere else as just about anywhere one would have to pay for what I have. And I am lucky to have it in the best city in the world :-) I've been in this place since 2004, so a long time. For roughly $290,000 @ 6% dividend I can live in a place that would cost close to $900,000. So there is no way that paying for real estate pays in Vancouver. It used to, 20 or so years ago, but recently it's gotten stupid. The fancier places (for sale) go for $2,500/sq ft these days.

thrifty++
Posts: 856
Joined: Sat May 23, 2015 3:46 pm

Re: YVR checking in

Post by thrifty++ » Fri Oct 19, 2018 5:37 pm

Wow thats awesome. I have been thinking of moving to Vancouver. I love it. This news about rental controls makes me feel much more inclined to move there. Would love to live in the West End. Such an amazing place.

malindi
Posts: 6
Joined: Wed Oct 17, 2018 1:36 am
Location: Vancouver, BC

Re: YVR checking in

Post by malindi » Fri Oct 19, 2018 7:39 pm

Be prepared for crappy small apartments, no view, no parking and around $2000 per month

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