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Financial Goals


BuffJim
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2 minutes ago, petitepedal said:

My goal for 2022 is to prepay final expenses.

My Dad missed some estate planning opportunities, but he did purchase a fairly expensive long term care insurance policy. They covered a chunk of his final nursing costs, and now have approved payment of a good portion of my mom’s assisted living, which costs 5,000 per month. 

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51 minutes ago, BuffJim said:

My Dad missed some estate planning opportunities, but he did purchase a fairly expensive long term care insurance policy. They covered a chunk of his final nursing costs, and now have approved payment of a good portion of my mom’s assisted living, which costs 5,000 per month. 

:o  Wow, that's an expensive ice flow.

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1 hour ago, BuffJim said:

I’m not extreme about finances, for instance I don’t make a budget, or balance my checkbook, but I set a target in non retirement savings by year end. 
I made it by $50!  Up until a few years ago, my savings were mostly in the form of 401k’s and a rollover IRA. But now being an empty nester has allowed me to squirrel away money here and there.  I have it mixed between mutual funds and banks/ credit unions. It includes an expected $10,000 if and when my daughter gets married. Hoping to continue saving this year. 

We started out well as empty nesters, then the kids came back.

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55 minutes ago, BuffJim said:

Full blown nursing homes cost as much as $15,000 per month. 

Yep. My Mom’s is close to $10,000 per month. But she just upgraded her room to include a living room. Long term care insurance is paying $10,000 per month so no out of pocket costs for the time being. Mom is 90. 

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5 hours ago, petitepedal said:

My goal for 2022 is to prepay final expenses.

I've thought about that, but what happens if the company goes out of business?  You're still young and healthy.  I do have a burial plot, though (my parents purchased one for all of us) and I've looked into getting a headstone put up in advance.  My parents did that and it was nice to know when my Dad passed that my Mom didn't have to make any big choices and they had something they both liked.

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3 minutes ago, Tizeye said:

My usual annual goal. Start with $500 on Jan 1 and grow it to $1,000,000 by Dec 31. Haven't done it yet, but there is always next year.

Yes, sure.  Choose 5 under-rated different stocks...and go for it, flipping according market roller-coaster swings.  In the process, get seasick and get a hernia/heart attack.

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7 hours ago, BuffJim said:

I’m not extreme about finances, for instance I don’t make a budget, or balance my checkbook, but I set a target in non retirement savings by year end. 
I made it by $50!  Up until a few years ago, my savings were mostly in the form of 401k’s and a rollover IRA. But now being an empty nester has allowed me to squirrel away money here and there.  I have it mixed between mutual funds and banks/ credit unions. It includes an expected $10,000 if and when my daughter gets married. Hoping to continue saving this year. 

I do try to aim for a vague, non-retirement savings annually. The hard part is thinking differently when retired... ie. that annual amount will be smaller.

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Just now, shootingstar said:

Yes, sure.  Choose 5 under-rated different stocks...and go for it, flipping according market roller-coaster swings.  In the process, get seasick and get a hernia/heart attack.

1 minute ago, BuffJim said:

Easiest way to get to a million dollars is to start with 2 million. 

Actually, I use options.

The theory - $500 doubled each month for 11 months equals $1.024,000 and one month to spare. Better yet, since taxes are not due until the end of the year with losses offsetting gains, maximum loss is $500, assuming you haven't pulled it out at some point.

In practice - While I can afford to lose $500, it is a non-issue, and how much can lose is mandatory recognition for any investment strategy. On the flip side, the maximum yearly gain I've had was $62,000 with most somewhere between $5000 and $20,000. Not bad, but there is always next year!

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1 hour ago, Tizeye said:

Actually, I use options.

The theory - $500 doubled each month for 11 months equals $1.024,000 and one month to spare. Better yet, since taxes are not due until the end of the year with losses offsetting gains, maximum loss is $500, assuming you haven't pulled it out at some point.

In practice - While I can afford to lose $500, it is a non-issue, and how much can lose is mandatory recognition for any investment strategy. On the flip side, the maximum yearly gain I've had was $62,000 with most somewhere between $5000 and $20,000. Not bad, but there is always next year!

You mean a gain that you've actually sold the investment instrument(s). Rather than paper theoretical gains..

I recently sold a small clutch (not all) for  1 of my favourite babies. (So hard to let go. :unsure:) So now it's cash. Which means slowly making next moves...it doesn't necessarily get easier. It requires one to look at the markets/portfolio chart curves.

And no I don't want an investment advisor and have them lop off an annual % fee for managing.  

I haven't reached couch potato portfolio status yet. I WAS this and had a flat portfolio for a few decades. It didn't fall into the toilet, it was just easy riding on a flat plane.

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Well after working with a financial advisor, I’m going to have to put more money down like you DeathJim and that’s a really good and fun thing. It’s nice to put that money in an account that can see it grow. Paying down on one’s own future is great. Paying down on credit cards suck. 

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1 hour ago, shootingstar said:

You mean a gain that you've actually sold the investment instrument(s). Rather than paper theoretical gains..

 

And no I don't want an investment advisor and have them lop off an annual % fee for managing.  

I haven't reached couch potato portfolio status yet. I WAS this and had a flat portfolio for a few decades. It didn't fall into the toilet, it was just easy riding on a flat plane.

Yes. While I don't know about Canadian tax law, in the US it is the cumulative net over the year, with the typical personal tax year Jan 1 to Dec 31. By system design it is the taking the proceeds (gain or loss) after a sale and rolling it into the next position. For example with simple math, 500x2=$1000 on first trade for $500 gain, second trade is $1000x2 = $2000 for $1000 gain but third trade is $2000 minus 25% loss = $1500 for a $500 loss then fourth trade is $1500 x 2 = $3000 for a $1500 gain. Tax calculation thus far is 500+1000-500+1500=$2500 tax liability. Now if next position of $3000 was a total loss to $0, you would have your maximum $500 loss of your starting investment ($3000 loss-$2500 accrued gain to date = $500 original investment).

Investment advisor fees? That is probably where my past as a stockbroker comes into play. True Story. My stepfather (weird saying that as was a twilight years 3rd marriage well after all children left home) had a long term relationship with a stockbroker that I still don't understand as following the stepfather's death Jan 2, 2020 I looked at his and mom investments (outside her personal Trust which I have LPOA on) all of those investments were losses - not bad, but losses none the less. One of them was mom's IRA which thankfully was 100% in cash valued at $114,000...but the stockbroker was trying to convince her to invest in a very convoluted fund that even I had a hard time understanding with all the hedges countering theoretical loss situations. Return was around 4% but then had to pay $900 fee annually. I talked mom into transfering it out of that firm and let me handle it as LPOA - and of course, I can't receive a fee, but I do have a vested interest to preserve assets for future inheritance, split 4 ways. Let's just say I have blown away that 4% less $900/year. No options! Straight investment in conservative utility stocks with dividends over 4% plus capital gains.  Started with $114,000 withdrew $12,000 as required minimum distribution, and today that account closed at $135,157. While the Government's goal with Required Minimum Distribution (RMD) is to have the IRA reduced to zero based on life expectancy...they haven't met me. At 72.5 it is 25% of year end closing of IRA, reducing each year and recalculated based on the year end closing value. At moms age 90, the percentage has dropped to 9.8% and declining each year. My goal is to cover whatever the RMD is and any excess is gravy. It is not like she needs the money. 

 

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29 minutes ago, Tizeye said:

Yes. While I don't know about Canadian tax law, in the US it is the cumulative net over the year, with the typical personal tax year Jan 1 to Dec 31. By system design it is the taking the proceeds (gain or loss) after a sale and rolling it into the next position. For example with simple math, 500x2=$1000 on first trade for $500 gain, second trade is $1000x2 = $2000 for $1000 gain but third trade is $2000 minus 25% loss = $1500 for a $500 loss then fourth trade is $1500 x 2 = $3000 for a $1500 gain. Tax calculation thus far is 500+1000-500+1500=$2500 tax liability. Now if next position of $3000 was a total loss to $0, you would have your maximum $500 loss of your starting investment ($3000 loss-$2500 accrued gain to date = $500 original investment).

Investment advisor fees? That is probably where my past as a stockbroker comes into play. True Story. My stepfather (weird saying that as was a twilight years 3rd marriage well after all children left home) had a long term relationship with a stockbroker that I still don't understand as following the stepfather's death Jan 2, 2020 I looked at his and mom investments (outside her personal Trust which I have LPOA on) all of those investments were losses - not bad, but losses none the less. One of them was mom's IRA which thankfully was 100% in cash valued at $114,000...but the stockbroker was trying to convince her to invest in a very convoluted fund that even I had a hard time understanding with all the hedges countering theoretical loss situations. Return was around 4% but then had to pay $900 fee annually. I talked mom into transfering it out of that firm and let me handle it as LPOA - and of course, I can't receive a fee, but I do have a vested interest to preserve assets for future inheritance, split 4 ways. Let's just say I have blown away that 4% less $900/year. No options! Straight investment in conservative utility stocks with dividends over 4% plus capital gains.  Started with $114,000 withdrew $12,000 as required minimum distribution, and today that account closed at $135,157. While the Government's goal with Required Minimum Distribution (RMD) is to have the IRA reduced to zero based on life expectancy...they haven't met me. At 72.5 it is 25% of year end closing of IRA, reducing each year and recalculated based on the year end closing value. At moms age 90, the percentage has dropped to 9.8% and declining each year. My goal is to cover whatever the RMD is and any excess is gravy. It is not like she needs the money. 

 

Ok, B) I need to digest your first paragraph for  awhile. Canadians can carry capital losses for years forward...into upcoming calendar years .don't know if there is a limit. Capital gains at this time is taxed 50% of  selling an investment instrument for its total gains, for non registered accounts (not registered retirement nor  TSFA accounts, which I believe is similar to the American ROTH).

Your mom is lucky to have you. One of my  brothers-in-law was a securities lawyer for Ontario Securities Commission...a major Canadian and its biggest regulatory authority for Canadian investment instruments, IPOs on TSX. His specialty on regulatory side was mutual funds. He is now the only child (his brother died) looking after his mother's assets after father died.  Her  situation is totally different from my mother's where we will have to sell her house to fund long term care.

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In all honesty, I tell my lawyer and financial planner that I have a paid work background in legal research...so it will provide context to some detailed questions  that I ask of them. One of them thinks I'm a numbers person. Well, no but show me, the evidence in writing.  Give me the examples. In fact, I requested the detailed software numeric tables whereas other clients aren't always given that.

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12 minutes ago, shootingstar said:

Ok, B) I need to digest your first paragraph for  awhile. Canadians can carry capital losses for years forward...into upcoming calendar years .don't know if there is a limit. Capital gains at this time is taxed 50% of  selling an investment instrument for its total gains, for non registered accounts (not registered retirement nor  TSFA accounts, which I believe is similar to the American ROTH).

 

Similar in US. No requirement to sell and can be held indefinitely. Becomes a tax liability only when sold. If held over 1 year it is "long term capital gains" and taxed at a lower rate (although that is at risk with proposed law changes). Held less than a year is "short tern capital gains" and what I was referring to earlier. That is taxed at the regular rate based on total taxable income for the year.

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50 minutes ago, Tizeye said:

Yes. While I don't know about Canadian tax law, in the US it is the cumulative net over the year, with the typical personal tax year Jan 1 to Dec 31. By system design it is the taking the proceeds (gain or loss) after a sale and rolling it into the next position. For example with simple math, 500x2=$1000 on first trade for $500 gain, second trade is $1000x2 = $2000 for $1000 gain but third trade is $2000 minus 25% loss = $1500 for a $500 loss then fourth trade is $1500 x 2 = $3000 for a $1500 gain. Tax calculation thus far is 500+1000-500+1500=$2500 tax liability. Now if next position of $3000 was a total loss to $0, you would have your maximum $500 loss of your starting investment ($3000 loss-$2500 accrued gain to date = $500 original investment).

Investment advisor fees? That is probably where my past as a stockbroker comes into play. True Story. My stepfather (weird saying that as was a twilight years 3rd marriage well after all children left home) had a long term relationship with a stockbroker that I still don't understand as following the stepfather's death Jan 2, 2020 I looked at his and mom investments (outside her personal Trust which I have LPOA on) all of those investments were losses - not bad, but losses none the less. One of them was mom's IRA which thankfully was 100% in cash valued at $114,000...but the stockbroker was trying to convince her to invest in a very convoluted fund that even I had a hard time understanding with all the hedges countering theoretical loss situations. Return was around 4% but then had to pay $900 fee annually. I talked mom into transfering it out of that firm and let me handle it as LPOA - and of course, I can't receive a fee, but I do have a vested interest to preserve assets for future inheritance, split 4 ways. Let's just say I have blown away that 4% less $900/year. No options! Straight investment in conservative utility stocks with dividends over 4% plus capital gains.  Started with $114,000 withdrew $12,000 as required minimum distribution, and today that account closed at $135,157. While the Government's goal with Required Minimum Distribution (RMD) is to have the IRA reduced to zero based on life expectancy...they haven't met me. At 72.5 it is 25% of year end closing of IRA, reducing each year and recalculated based on the year end closing value. At moms age 90, the percentage has dropped to 9.8% and declining each year. My goal is to cover whatever the RMD is and any excess is gravy. It is not like she needs the money. 

 

 

25 minutes ago, shootingstar said:

Ok, B) I need to digest your first paragraph for  awhile. Canadians can carry capital losses for years forward...into upcoming calendar years .don't know if there is a limit. Capital gains at this time is taxed 50% of  selling an investment instrument for its total gains, for non registered accounts (not registered retirement nor  TSFA accounts, which I believe is similar to the American ROTH).

Your mom is lucky to have you. One of my  brothers-in-law was a securities lawyer for Ontario Securities Commission...a major Canadian and its biggest regulatory authority for Canadian investment instruments, IPOs on TSX. His specialty on regulatory side was mutual funds. He is now the only child (his brother died) looking after his mother's assets after father died.  Her  situation is totally different from my mother's where we will have to sell her house to fund long term care.

I need to devote an hour not on New Years to digest what he just said. 

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2 hours ago, Airehead said:

This is a very good point, @sheep_herder   We have something in our will, I might need to make it more clear. 

I just redid my will so whoever takes my cat gets a certain amount of money to cover food and medical costs.  I know my sisters will make sure any pets are taken care of, but if we get to a point where they're not able, I'll have to make more specific arrangements.

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 Congratulations.

Before I kept a budget, if my bank accounts were growing faster than normal, I'd crank up the automatic IRA and regular stock investments a little, adjust my spending to it, and do the same the next time my bank accounts grew too much.  At the same time I looked at ways to limit spending.

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9 hours ago, Thaddeus Kosciuszko said:

 

You're pretty lucky.  Most daughters wouldn't be happy with getting married and then having 1/5 of a reception.

;)

I’m not buying a $50,000 reception. If she wants an extravagant reception, her Mom will have to pitch in.  

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2 hours ago, BuffJim said:

I’m not buying a $50,000 reception.

When WoBG and I got married, we had about 25 people attend the 'reception'.   We had a large room reserved at a local restaurant and ordered off of the menu and I paid paid the bill. 

That was a good sign... I just didn't know it at the time,  Both of us are willing to live below our means.   That has served us well over the years.

I balance ALL of or accounts down to the penny  (yeah I'm like that).  Quicken is my fiend... and it sure makes tax time very easy. 

We are still saving, and we are retired.

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13 minutes ago, Bikeguy said:

When WoBG and I got married, we had about 25 people attend the 'reception'.   We had a large room reserved at a local restaurant and ordered off of the menu and I paid paid the bill. 

That was a good sign... I just didn't know it at the time,  Both of us are willing to live below our means.   That has served us well over the years.

I balance ALL of or accounts down to the penny  (yeah I'm like that).  Quicken is my fiend... and it sure makes tax time very easy. 

We are still saving, and we are retired.

Wo46 once spent over a hour looking for a $1.50 that the checking account was off. 

She is still saving in retirement and I refuse to be the richest one in the cemetery. I'm not saying let's go on a big stupid spending spree but we can definitely enjoy what we worked for. 

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2 hours ago, BuffJim said:

I’m not buying a $50,000 reception. If she wants an extravagant reception, her Mom will have to pitch in.  

Would you have expected or asked for $10k (let alone $50k) in "equivalent dollars" back when you first got married?  I find it tragic that kids and parents are now in this weird spiral of spending to spend.  I think back on our wedding, and chuckle at the awesome time we had and the memories of the event & later honeymoon, and scratch my head when listening to my SiL talk about the thousands spent on her daughter's dress for the upcoming wedding.  They have the money (retired military) and maybe have some real desire for a big wedding, but after decades of seeing TV and then social media push lavish weddings, it's hard to not think "normal" folks are getting brainwashed.  

It sort of dovetails into Mick's financial class requirement. Kids and parents might want to revisit some of the core concepts. :)  Imagine $10k invested in bitcoin :D instead of a dress, a cake, and a bunch of hor d'oeuvres?  

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46 minutes ago, Razors Edge said:

Would you have expected or asked for $10k (let alone $50k) in "equivalent dollars" back when you first got married?  I find it tragic that kids and parents are now in this weird spiral of spending to spend.  I think back on our wedding, and chuckle at the awesome time we had and the memories of the event & later honeymoon, and scratch my head when listening to my SiL talk about the thousands spent on her daughter's dress for the upcoming wedding.  They have the money (retired military) and maybe have some real desire for a big wedding, but after decades of seeing TV and then social media push lavish weddings, it's hard to not think "normal" folks are getting brainwashed.  

It sort of dovetails into Mick's financial class requirement. Kids and parents might want to revisit some of the core concepts. :)  Imagine $10k invested in bitcoin :D instead of a dress, a cake, and a bunch of hor d'oeuvres?  

Not all young'uns have the same lavish wedding plans. My niece, the rom-com writer, bought and wore a very lovely pale blue  long gauzy prom dress. I'm certain she paid no more than $400.00 or less. She bought it for her wedding, not a remake of high school dress. That is very good. The dress looked fantastic and "special" on her.

I know she liked it so much, that she still tweets out a photo of herself (and her hubby in his ordinary suit, not a tux).. She gets alot of compliments. She has to keep up the "romance" dream ...she is a rom-com writer.:loveshower: Her wedding ring...was her  mother's engagement ring which she probably feels "close" to her mother, who is no longer alive.

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