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I’m the “Villain”

Posted by mapetitechou on Mar 26, 2015 in financial planning, philosophy, relationsips, saving

Apparently in my in-laws’ eye, I’m the “villain” because I am an iron-fisted wife with our money — I don’t let my husband spend any. I knew that they thought of me as “frugal” or “good with money”. But recently I think I got a better idea of what they really think. I find that quite amusing. I’m a private person so I don’t usually broadcast our financial situation, unlike some other family members. So I suppose it’s easy for them to speculate what’s going on in our family’s finance. For some reason all my husband’s family think that we have oodles and oodles of spare money laying around, especially my mother-in-law, according to my lovely youngest sister-in-law (my husband has three sisters). She and I get along very well and she’s very open about her life and her opinions and she appreciates that I’m a good listener, so we often chat. Personal finance is one of those topics.

When I explained to her, I basically said every dollar is accounted for. Ha, I wish we had a ton of spare money laying around for us to spend! If we did, I’d definitely let my husband get his dream car. He’s always complaining about having to drive my old Corolla because his Tiburon (a sport coup from his pre-children days) died last year and it was just not feasible to get a new sports car anymore. And my MIL thinks I’m holding him back somehow. There are quite a few aspects to our finance that she does not understand.

Because of my “pay yourself first” rule, basically for every paycheque some of the money is redirected to our RRSPs, TFSAs, RESPs and other investment accounts. These have to be taken care of first. I am very firm on not shirking our responsibilities because you are ultimately responsible for yourself, present and future. So if you don’t take care of your future self, nobody else is going to do that for you. I think because she and my father-in-law did not live this way, she cannot even comprehend it. They are living on government pension. They never saved for their retirement. They don’t have any investments. They live a very simple life in a small town in Newfoundland. So their living expenses are very low, except for my father-in-law’s penchant for a new car every several years (that’s a whole other issue for another post). So the question of why you are putting your money in all these places is pretty complicated to grasp.

Also, my in-laws (and all my guy’s siblings for that matter), seem to forget that my husband has been in school for as long as we’ve been together. And that university education costs A LOT of money. My husband is a very smart and hard-working person. He did computer science in college. Then when we were dating, he did electrical engineering. And after we got married, he decided to do a business management degree while working full-time. And after he got that degree, he went on to do his MBA also while working full-time. He also had size-able student loans during early years of our marriage that we managed to pay off quickly. Essentially we invested a lot of money in his schooling. Every month a portion of our income was going to his tuition. I told my sister-in-law it’s like paying two mortgages every month. We just don’t broadcast that, it’s not in my nature to complain about it. If it was any of other siblings, we would be hearing about constantly. Again, this speaks to my philosophy about taking responsibility for yourself.

And furthermore, because we feel so strongly about education, we are saving for our children’s education. And somehow that’s hard for my MIL to understand too. She thinks when we talk about saving for their university education, it’s something that might or might not happen in the distant future. It’s not! My son’s 5, my daughter’s going to be 3 soon. In only 12 years my son will be going to university. 12 years will be gone in a blink of an eye. If you don’t start preparing for it now, you’ll run out of time. Time is your biggest ally in investing. So to my MIL, it’s money that’s being not used right now and being wasted. Well, again, I understand it’s a concept hard for her to grasp because they didn’t save for their children’s post-secondary education. My guy and his youngest sister are the only ones that have university education and they paid for it themselves. Massive student loans. My parents saved for my education. I had a jump start on life after school. That is something so valuable for your children to have.

We have our fun money obviously. Traveling is our biggest hobby. We go to China regularly. We take beach vacations every year. We’ve been to Europe a few times. My kids are seasoned travelers. My son has traveled more and further distance-wise in his 5 years of life than my in-laws have ever traveled in their entire life. It’s a gift that I want to keep giving to my kids for as long as they will let me (we will see how that goes when they are teenagers). The vacation funds have to be allotted and these aren’t inexpensive vacations. My MIL doesn’t seem to understand that either.

So essentially, every dollar is accounted for. And if somebody thinks it takes an iron-fisted wife to manage that, so be it. I sleep very well at night.

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Wooo I got dividends!

Posted by mapetitechou on Mar 8, 2015 in Investing

Towards the end of last year, I finally made the jump from low-cost index mutual funds to even lower-cost ETFs, a step not without trepidation. But what an exhilarating feeling it was. I had been contemplating the switch for a good part of year 2014. Because I hadn’t traded any stocks before in my life, the idea of opening an account with a discount brokerage and buying ETFs on my own was sort of intimidating. So I prepared myself by watching lots of Youtube videos on how to buy ETFs, reading books on ETFs, and of course my go-to reference Canadian Couch Potato blog.

I felt like such a newb when I purchased my first ETF fund. I forgot that it takes 3 business days for the purchase to settle because I was so used to seeing the funds show up in the account in mutual funds the next day. The day after I made the ETF purchase I went to check the account and I saw the fund was not “settled”. I panicked and thought I must’ve made a mistake somewhere during the transaction. I emailed the support team at my brokerage right away and they said my order was accepted. Then I realized “duh! You have to wait 3 days.” I told my husband about it and we had a good laugh. Since then I’ve purchased a few more ETF funds. I cannot tell you how awesome it feels. I feel like a real pro.

Lo and behold, on one of the mornings back in January when I checked my account, I saw two new transactions labeld “DIV”.  Dividends! They were a tiny amount, but man was I excited. Hurrah my money is generating money! Now if we could add a few 0’s to the end of those numbers, I could retire early :D.  Honestly I will not forget that feeling and I hope that feeling will not diminish over time when those lovely dividends keep coming in.

Any of you own any ETFs and share the same feeling as mine? I’d imagine even if you have been an old pro at this for years, the great feeling does not diminish when you see dividends show up in your account right?

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Never thought I’d root for a market downturn

Posted by mapetitechou on Feb 25, 2015 in Investing

Or even a market crash! Yep years ago if I saw my mutual funds drop in value, that would scare the crap out of me. Now when I want to buy an ETF, I always hope for a drop in its price, the bigger the drop the better. It’s interesting how your mindset shifts the more you learn about investing and the better of a bigger picture you have about your financial plan.

When the market is going up, I lament the fact that I cannot purchase as many shares as I was hoping for. Sure the market value of my other ETFs are up, but that’s unrealized gain. If I’m not going to sell those shares, the unrealized gain does not mean much to me. Similarly, when the market value is down, the unrealized loss does not mean much to me either. I only care about how much the shares are going to cost me when I buy and I want them to be cheap. But, as the experts always say, you cannot time the market, you can never know for sure when is the best time to jump in, so the best time to buy is now. It’s better to get in the market than to have cash idling in your chequeing account. That’s the opportunity costs that pros refer to.

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